Some highlights of CMS's proposed rule, announced Thursday, that would update payment policies and rates for both hospital outpatient departments and ambulatory surgical centers for 2009:

Hospital outpatient departments would receive a 3 percent annual inflation update next year, but those that don't meet quality reporting requirements will see that pay rate increase to just 1 percent. It would mark the first time Medicare outpatient pay rates have been associated with the quality of service. In order to receive the full OPPS payment update for services furnished in CY 2009, hospitals must report data in CY 2008 on seven quality measures of emergency department and perioperative surgical care.

Rates are still frozen for ASCs. The good news: 2009 will be the last year of the zero-percent inflation update for ASCs.

The update to ASC rates constitutes the second year of a four-year phase-in that aligns ASC rates with the ambulatory payment classification (APC) groups that are used to pay for services in hospital outpatient departments. Next year, 50 percent of ASC rates for old services will be based on the old system and 50 percent on the new. Services newly added to the ASC list will receive the new payment rate immediately.

CMS is proposing to add nine surgical procedures to the list of procedures for which Medicare will pay when performed in an ASC. Three of the procedures have new codes and descriptors:

Flaws in the technology and implementation of bar-coded medication administration systems can increase the risk of medication errors, according to a study from the University of Pennsylvania School of Medicine.

Researchers examined how nurses used these systems in day-to-day operations at five U.S. hospitals. They found that the systems were able to reduce medication errors if used properly, but that such technical difficulties as unreadable or missing barcodes, battery failures and dropped wireless connections led some nurses to work around proper protocols, thereby increasing the risk of wrongly administered, dosed, timed or formulated drugs.

"These data show that as with all health care technologies, suboptimal design and implementation of [bar-coded medication administration systems] can facilitate new medication administration hazards, lead clinicians to deviate from required safe-use protocols, reduce the technology's safety benefits, and enhance the probability of medication errors," write the researchers in a study published in the Journal of the American Medical Informatics Association.

To improve the efficacy of these systems and reduce the need for workarounds, they recommend a holistic and ongoing evaluation of the technology and its applications in real-world clinical settings. "Reiterating rules or enacting more rules may not reduce workarounds," write the authors. "Instead, repeated examinations and corrections of [the systems'] actual uses are needed to optimize their role in preventing medication errors."

Irene Tsikitas

After five years of investigation, the final two defendants in the Unity Outpatient Surgery Center scheme - said to be the largest medical fraud prosecution in U.S. history - have been indicted.

Roy Dickson, Unity's attorney, and Andrew Harnen, the center's accountant, were involved in the fraudulent billing of $154 million to insurance companies for unnecessary surgeries performed on 2,841 healthy patients in exchange for money or low-cost cosmetic surgery, according to the Orange County (Calif.) District Attorney. They join 17 other defendants charged in the case, including Unity's administrators and surgeons.

Unity recruiters - called cappers - targeted employees covered by PPO insurance plans, luring them to the center from 39 states with $300 to $1,000 per-surgery payments or credit toward cosmetic surgeries. The cappers scheduled the surgeries, arranged and paid for transporting the patients to California and coached the patients on how to act and what to say when presenting for surgery.

Prosecutors report that Mr. Harnen signed 10 checks to surgeons totaling $50,000 and 157 checks to cappers for close to $1 million for their roles in the surgery scam. Mr. Harnen is also accused of funneling money to corporations he created in order to hide income generated by the scam and for paying patient recruits from a personal corporation account.

Unity reportedly hired Mr. Dickson to collect payments from patients and insurance companies, according to prosecutors. After the district attorney's office raided Unity in April 2003, Mr. Dickson allegedly created false documents to mask the illegal patient recruiting, funneled over $1 million in Unity assets to his personal account to hide it from authorities and laundered close to $3 million received from illegal insurance company payments.

Mr. Dickson faces 106 felony charges and a maximum sentence of 73 years and 8 months if convicted, prosecutors say. Mr. Harnen was indicted on 118 felony charges and could serve 80 years and four months if convicted. Both are being held on $2 million bail.

Daniel Cook