CMS Pub. 100-04, ch. 4, § 250.13

Payment Program (HSIP) for Surgical Services Rendered in Critical

Access Hospitals (CAHs) Paid under the Optional Method

(Rev. 2078, Issued: 10-28-10, Effective: 04-01-11, Implementation: 04-04-11)

There are two methods of payment for outpatient services furnished by Critical Access

Hospitals (CAHs). The amount of payment for outpatient services furnished by a CAH

under the traditional method is equal to 101 percent of the reasonable cost of the facility

service and payment to the physician/practitioner under the Physician Fee Schedule(PFS)

for the professional service or a CAH may elect to receive amounts that are equal to 101

percent of the reasonable cost of the facility service plus, with respect to the professional

service, 115 percent of the amount otherwise paid for the professional service under the

PFS. This election is sometimes referred to as "method II" or "the optional method."

Section 5501(b) (2) of the ACA is a conforming amendment, which refers to payments to

the CAH for professional services under the optional method. As such, section

5501(b)(2) requires that, under the optional method, the 115 percent adjusted payment to

the CAH for professional services does apply to the incentive payment for major surgical

services furnished by general surgeons in HPSAs.

For major surgical services furnished by general surgeons on or after January 1, 2011 and

before January 1, 2016, the additional incentive amount specified is to be included in the

determination of payment for professional services made to CAHs paid under the

optional method, but will be provided as a separate incentive payment to the CAH, on

behalf of the qualified general surgeon, when they furnish a 10 - or 90 - day global

surgical procedure in an identified HPSA. Therefore, the 10 percent incentive payment

will be made based on 115 percent of the amount that would be paid for the surgeon’s

professional services under the PFS.

250.13.1 Overview of the HSIP

(Rev. 2078, Issued: 10-28-10, Effective: 04-01-11, Implementation: 04-04-11)

The incentive payment applies to major surgical procedures, defined as 10 - and 90 - day

global procedures under the PFS and furnished on or after January 1, 2011 and before

January 1, 2016, furnished by an 02-general surgeon in an area designated under section

332(a)(1)(A) of the Public Health Service Act as a HPSA.

To be consistent with the Medicare HPSA physician program (Publication 100-04,

Chapter 12, Section 90.4), HSIP payments will be calculated by Medicare contractors on

a quarterly basis, on behalf of the qualifying 02-general surgeon for the qualifying

surgical procedures.