The National Association for Medical Direction of Respiratory Care

Regulations of Interest

Recent Posted Regulations from CMS

Update: November 9, 2011


CMS Posts 2012 Rules for Hospital Outpatient Prospective Payment

CMS has posted the 2012 rules for Hospital Outpatient Prospective Payment, effective 1/1/12, with a payment rate of $37/session for pulmonary rehabilitation services (HCPCS code G0424), a reduction of about 40% from the $63 rate for the current year. CMS rejected the multi society argument that CMS data, while accurate, is basically artifact data. CMS uses hospital charges that are included in claims data to determine hospital outpatient payment rates, and when hospitals do not accurately compute their charges for new, bundled services such as pulmonary rehab, the effect is a notable reduction in payment rates.

To view Medicare regulations, both proposed as well as final rules:

The most recent final physician fee schedule rule, effective January 1, 2014

The most recent hospital outpatient payment rule, effective January 1, 2014

The most recent hospital inpatient rule, effective October 1, 2013

The most recent proposed hospital inpatient rule, for services October 1, 2014


If NAMDRC can be of further assistance, please do not hesitate to contact the NAMDRC Executive Office at 703-752-4359.

Update: August 15, 2011



Impact of Recent Deficit Activities on Physician Fees

Deficit Deal Could Sidetrack SGR Fix

The AMA and others have expressed concern that the Super Committee created by the debt ceiling extension could sidetrack a "doc fix" later this year. Because the price tag on a genuine SGR fix rather than the yearly patch used by Congress is now approaching $300 billion, the toxicity of such a discussion by the Super Committee could lead to either a one year patch or no Congressional action at all. The latter possibility would lead to just under a 30% hit to physician fees.

Deficit Deal Trigger Also Causes Angst

In the event that the Super Committee cannot come to a majority recommendation (let alone consensus) and the "trigger" for across the board cuts in Medicare and Defense actually take place, it would likely mean a 2% hit across the board to all Medicare providers. That could actually be a double whammy for physicians if Congress offers neither a patch nor a long term fix. Hospitals are already crying foul, indicating that even a 2% hit would affect care to Medicare beneficiaries. Ironically, the drug industry would rather absorb the 2% hit rather than policy reforms such as expansions to the drug rebate program.

CMS Rejects, Again, Request for Unique DRG for NIV

In its final rule for hospital inpatient payment rates for FY 2012, CMS rejected the refined proposal NAMDRC had suggested to create a unique DRG for non invasive mechanical ventilation for respiratory failure and related diagnoses.

If NAMDRC can be of further assistance, please do not hesitate to contact the NAMDRC Executive Office at 703-752-4359.

Update: June 21, 2011



Medicare Program; Proposed Changes to the Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Fiscal Year 2012 Rates


NAMDRC, the National Association for Medical Direction of Respiratory Care, welcomes the opportunity to comment on the proposed rule published in the May 5, 2011 Federal Register. NAMDRC members serve as medical directors of respiratory care departments, pulmonary rehabilitation services, sleep labs and critical care units in approximately 2,000 hospitals nationwide.

Our comments focus on two specific issues raised in the proposed rule.

Request for unique DRG for non invasive mechanical ventilation: We appreciate the comments CMS provided in response to our request, and the supporting data allows us to refine our request. The table on p. 25818 of May 5 Federal Register provides very helpful information that NAMDRC did not have available when we crafted our original request.

  • The information provided shows the specific breakdown of over 1.1 million cases involving ICD-9-CM categories 93.90, 96.70, 96.71 or 96.72.
  • We do not know, and we surmise that CMS would have little way of knowing, if the percentage (or raw numbers) of 93.90 are underestimated. That is, a procedure such as endotracheal intubation or tracheostomy is likely to be captured as a defining component of a diagnostic group, while NIV might not be coded separately from the primary diagnosis.
  • DRG 189 (Pulmonary Edema and Respiratory Failure) had 87,688 cases, 22,023 of which NIV was indicated. Length of stay for all cases (which includes the weighting of the NIV cases) was 5.36 versus 6.07 for only the NIV cases, and there was approximately a 25% higher cost for the NIV cases.
  • There are 3 COPD DRGs, 190, 191, and 192. Those 3 DRGs alone account for approximately 35% of all NIV cases. For DRG 190, the increased cost for NIV was roughly $4,000 (57% greater); for DRG 191, the increased cost for NIV was approximately $2600 (41% greater); and for DRG 192 the increased cost for the NIV cases was approximately $2180 (32%).


Because the overall usage of NIV has such a broad scope, we believe that there is enough clinical coherence with DRGs 189-192 (respiratory failure/COPD) to use only those DRGs as the primary catchment. The data suggest to us that use of NIV in those DRGs (25% of DRG 189; 6% of DRG 190 - COPD with MCC; 3% of DRG 191 - COPD with CC; and 2% of DRG 192 – COPD without CC/MCC) is probably appropriate for respiratory failure, and an underestimate of the application of NIV in COPD exacerbation.

Recommendation: Given the consistently higher costs, a unique NIV DRG for respiratory failure, pulmonary edema and COPD as triggering diagnoses, along with the presence of NIV and the absence of either intubation or tracheostomy, is a logical and appropriate step for CMS to take, given a careful review of the data CMS has made available.

Hospital Readmissions: NAMDRC acknowledges the financial data regarding readmissions can be compelling, not only a focus of where dollars are spent, but also as a focus for potential cost savings. That being noted, we urge CMS to exercise extreme caution in implementing financial incentives to reduce hospital readmissions in the two areas where we have significant expertise – pneumonia and COPD. We believe it is relatively easy to oversimplify this matter –

  • The "typical" discharge of a COPD patient is anything but typical. Some will do well at home, and that is clear on discharge; others need major ongoing management. Patient adherence to the prescribed pharmacologic and non-pharmacologic maintenance regimens is critical. Despite careful attention by the physician to close the care gap after hospital discharge, many COPD patients are almost certain to return, as they are quite ill, perhaps toward the end of life, and re-hospitalization is likely, regardless of the care provided after hospital discharge. Predicting the outcome is an inexact science, interventions may not be effective, and imposing financial penalties in the face of these clinical realities is not reasonable.
  • For the pneumonia patient, the near and long term outcomes may be more predictable, but clinical variability remains. For example, if the patient is non compliant with a post-hospital treatment regimen where, it is not logical or just to penalize the providers. Indeed, this may result in discriminatory penalties against hospitals that care for more complex, indigent, or inner-city patients, and lead to less medical care for those most in need.
  • The management of the post-hospital patients is also problematic because of the current coding/payment structure. For example, if telemedicine technology was placed in the patient’s home to relay pertinent clinical information to the physician and/or hospital, someone must review that data, adjust the treatment plan, and communicate with the patient, all of which is uncompensated. A physician would be compensated only for identifying an issue of concern and arranging a face-to-face visit, provided the patient appears for the follow-up. Again, the physician or hospital is not compensated for avoiding readmission, but is penalized for not acting.
    The concept of a bundled payment for a "spell of illness" is certainly one worthy of research, but absent a definitive payment scenario that provides the tools to manage the post hospitalization patient in his/her home, a strict approach to financial penalties does not seem reasonable.


If NAMDRC can be of further assistance, please do not hesitate to contact the NAMDRC Executive Office at 703-752-4359.

Update: May 2, 2011



CMS Rejects NAMDRC proposal for unique DRG for non invasive ventilation (NIV)

As part of the proposed rule for hospital inpatient rates effective October 1, 2011, CMS has rejected a formal proposal from NAMDRC to establish a unique DRG to address the resources associated with non invasive mechanical ventilation.

Virtually all DRGs used by Medicare are diagnosis related, but mechanical ventilation is one of the few exceptions. CMS has long recognized the significant resources associated with trached and intubated patients, but it is that procedure rather than the diagnosis that pushes a patient to one of the unique DRGs. As NIV has become a key tool in the physician toolbox to address certain patients, NAMDRC had proposed CMS adopt a DRG to address the use of this important technology that oftentimes reduces the length of hospitalization as well as complications associated with extended ventilator dependence.

NAMDRC is considering possible revisions to the proposal to make it more workable to CMS.

The proposed regulation can be found at and the rule is scheduled to appear in the May 5 Federal Register.

Ryan Plan for Medicare Under Fire

The Republican budget plan that shifts Medicare into, in effect, a voucher program, has resulted in political problems for many Republicans trying to sell the concept at town hall meetings scheduled during the two week Congressional recess. Even Congressman Paul Ryan (R-WI) was not immune to constituents voicing their strong displeasure with the proposed dismantling of the program very popular among seniors.

House Holds Hearings on SGR Options

In response to sweeping invitations to physician specialty organizations for options to address alternatives to SGR, Congressional hearings are scheduled to give the societies the opportunity to voice their suggestions.

Update: April 14, 2011



From CMS:

CMS has published a proposed regulation for Accountable Care Organizations. The 129 page regulation can be found here. ACOs would be formal, legal networks of physicians/group practices, hospitals, suppliers with at least 5,000 Medicare fee-for-service beneficiaries and the ACO would share in savings achieved by the new network. Tentative start date for pilot ACOs would be January, 2012.

CMS has delayed until July, 2013 the tentative date for implementation of Round Two competitive bidding. CMS is planning to expand the program from the current 9 sites to 90+ at that time; this summer CMS will propose any expansion to the list of items subject to competitive bidding (currently, oxygen, CPAP and RADs are subject to the bidding; ventilators might be added to the list).

From HHS:

HHS Secretary Sebelius has announced “the Partnership for Patients, a new national partnership that will help save 60,000 lives by stopping millions of preventable injuries and complications in patient care over the next three years. The Partnership for Patients also has the potential to save up to $35 billion in health care costs, including up to $10 billion for Medicare. Over the next ten years, the Partnership for Patients could reduce costs to Medicare by about $50 billion and result in billions more in Medicaid savings. Already, more than 500 hospitals, as well as physicians and nurses groups, consumer groups, and employers have pledged their commitment to the new initiative. Additional information can be found here.

From Capitol Hill & The White House:

The budget and deficit fights will likely continue, perhaps all the way through the 2012 election cycle. For Medicare, President Obama puts a lot of faith (and savings) into the independent payment commission established under the health care reform law. It will recommend changes in policies (bending the proverbial cost curve) to Congress, and if Congress does not adopt those changes or similar ones that achieve the same savings, HHS will have the authority to adopt the Commission recommendations. The primary Republican approach is to create a voucher system for Medicare, replacing the current system with one that would allow seniors to purchase health care insurance in the commercial marketplace.


Proposed rule: Accountable Care Organizations
Federal Register - April 7, 2011

Final Rule: Physician Fee Schedule for 2011
Federal Register - November 29, 2010

Final Rule: Hospital Outpatient Prospective Payment System Rates for 2011
Federal Register - November 24, 2010

Final Rule: Hospital Inpatient Prospective Payment System Payment for 2011
Federal Register - August 16, 2010

Final Rule: Electronic Health Records Federal Register
Federal Register - July 28, 2010

Final "Meaningful Use" Regulation
Federal Register - August, 2010

Proposed Physician Fee Schedule for 2011
Federal Register - August, 2010

Proposed Hospital Outpatient Rule for 2011
Federal Register - August 2010

Other Regulations

Physician Fee Schedule, Effective January 1, 2010 - November 6, 2009

Hospital Outpatient Prospective Payment System, Effective January 1, 2010 - November 6, 2009

Senate Finance Committee releases its proposal for health care reform and plans to begin amending the proposal September 21st.
Finance Committee Proposal - September 18, 2009

2010 Proposed Physician Fee Schedule - July 20, 2009
(including new proposed rules for consultations and pulmonary rehabilitation)

2010 Proposed Hospital Outpatient Payment Rates - July 20, 2009
(including proposed rules for pulmonary rehabilitation)

House of Representatives Proposal for Health Care Reform - updated July 20, 2009

Senate HELP Committee Proposal

Finance Committee Option Paper #1

Finance Committee Option Paper #2

Separate links to the winners in each competitive bidding area

Competitive bid pricing announced by CMS for CPAP and RADs - March 21, 2008

All competitive bid prices can be found at:

2008 Physician Fee Schedule

AHRQ Technology Assessment Program

The 2008 Proposed Physicians Fee Schedule

CMS proposed rule for revamping the DRG system for fiscal year 2008

Reports from the Inspector General

Reports from the GAO (Government Accountability Office)

The Medicare Statute

Measure Descriptors for Pool of Potential 2007 PVRP Quality Measures

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