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Rule Would Delay Appropriate Use Criteria Requirement until 2019, Cut Rates for Off-Campus Hospital Departments

The Centers for Medicare & Medicaid Services (CMS) has published its proposed rule to update the Medicare physician fee schedule (PFS) for calendar year (CY) 2018. The proposed rule addresses numerous Medicare policies, including:  implementation of appropriate use criteria (AUC) for advanced diagnostic imaging services; a deep reduction in reimbursement for off-campus hospital outpatient departments; and consideration of potentially misvalued codes, among many others.  Highlights of the proposed rule include the following: 

  • Under the proposed rule, the 2018 MPFS conversion factor (CF) would be $35.9903, up slightly from the 2017 CF of $35.8887. This update reflects a 0.5% update factor specified under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which is partially offset by a -0.03% relative value unit (RVU) budget neutrality adjustment and a -0.19% “target recapture amount” (since savings from proposed revisions to the RVUs of misvalued codes would not meet a statutory-0.5% target).
  • CMS proposes to revise a policy adopted in the final 2017 Medicare Hospital Outpatient Prospective Payment System (OPPS) rule to implement Section 603 of the Bipartisan Budget Act of 2015, which establishes a site-neutral payment policy for certain newly-acquired, provider-based, off-campus hospital outpatient departments (which CMS calls “off-campus provider-based departments” or “off-campus PBDs”). Effective for services provided on or after January 1, 2017, off-campus PBDs are paid under the PFS in most cases, rather than the generally higher-paying OPPS (with certain exceptions). In the 2017 rule, CMS established new PFS site-of-service payment rates to pay non-excepted off-campus PBDs for the technical component of non-excepted services; these rates generally are based on OPPS payments scaled downward by 50% (called the PFS Relativity Adjuster). For CY 2018, CMS is proposing to reduce the Relativity Adjuster by 50%; that is, the technical component rates for these services would be reduced from 50% of the OPPS rate to 25% of the OPPS rate. CMS invites comments on whether a different PFS Relatively Adjuster would be appropriate.

Continue Reading CMS Proposes Medicare Physician Fee Schedule Update for 2018

CMS recently released guidance on how hospitals can request from their CMS Regional Office a relocation exception from site-neutral payment rates for an excepted off-campus department of a provider due to an extraordinary circumstance, in conformance with the 2017 Medicare Outpatient Prospective Payment System Final Rule. A separate CMS document discusses implementation of 21st…

CMS has published its final rule with comment period updating the Medicare Hospital Outpatient Prospective Payment System (OPPS) and the Ambulatory Surgical Center (ASC) Payment System rates and policies for CY 2017.  CMS will accept comments on a limited number of provisions until December 31, 2016.

Major provisions impacting outpatient hospital department services include the following: 
Continue Reading CMS Finalizes Medicare OPPS, ASC Rates and Policies for 2017

A new OIG report examines CMS’s oversight of Medicare billing by provider-based facilities – that is, facilities that operate under the ownership, administrative, and financial control of a hospital and meet other requirements, and that bill as an outpatient department of the hospital rather than a freestanding facility. The OIG observes that Medicare payments under…

The House Energy and Commerce Committee is seeking input on Section 603 of the Bipartisan Budget Act of 2015, which established a site-neutral payment policy for newly-acquired, provider-based, off campus hospital outpatient departments (HOPD) after November 2, 2016.  In an open letter to the health care community, the Committee explains the origins of the policy, noting that it was enacted as a result of concerns that the Medicare hospital outpatient prospective payment system paid more for the same services provided at HOPDs than in other settings, such as an ambulatory surgery center, physician office, or community outpatient facility.   The letter discusses evidence the Committee considered in establishing this policy, but notes that the Committee has received significant feedback on this provision since enactment, with concerns raised about the provision’s potential impact on hospitals, beneficiaries, and providers.  The Committee has received a range of recommendations from the public, with stakeholders urging the Committee to:
Continue Reading House Energy & Commerce Committee Seeks Comments on Medicare Site-Neutral Payment Policies

On November 10, 2014, CMS published its final rule to update the Medicare Hospital Outpatient Prospective Payment System (OPPS) and the Ambulatory Surgical Center (ASC) Payment System rates and policies for calendar year (CY) 2015. The following are highlights of this major rulemaking:

  • The final OPPS fee schedule increase factor is 2.2%. This update reflects a hospital market basket increase of 2.9%, which is offset by two Affordable Care Act (ACA) provisions: a 0.2% reduction and a -0.5% “multi-factor productivity” (MFP) adjustment. The update for individual procedures can vary, and hospitals that do not meet Hospital Outpatient Quality Reporting (OQR) Program requirements are subject to a 2.0% reduction. CMS projects a 2.3% increase in total OPPS payments (about $900 million) for 2015, considering all policies in the rule.

Continue Reading CMS Finalizes CY 2015 Medicare OPPS/ASC Rates & Policies