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From Health Law Daily, November 2, 2016

OPPS, ASC payment rates updated; off-campus PBD billing system established

By Kathryn S. Beard, J.D.

To ensure that clinicians do not have a financial incentive to overprescribe opioids, CMS removed the pain management dimension from the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) Survey for purposes of the Hospital Value-Based Purchasing (VBP) Program. In a Final rule with comment period, CMS finalized OPPS and ASC payment rates and policy changes. Payments under the Hospital Outpatient Prospective Payment System (OPPS) for calendar year (CY) 2017 will increase by 1.7 percent, while payments under the ambulatory surgical center (ASC) payment system will increase by 1.9 percent. CMS also issued an Interim final rule with comment period to establish Medicare Physician Fee Schedule (MPFS) rates for off-campus provider-based departments (PBDs).

Most of the provisions of the Proposed rule (81 FR 45603, July 14, 2016; see Patient-focused and physician-supporting changes proposed for OPPS and ASCs, July 7, 2016) were finalized by CMS. There were changes in the specific payment rate updates and with regard to off-campus PBDs. The major addition, covered by the Interim final rule with comment period, was to ensure hospitals have a mechanism to bill for services provided by off-campus PBDs; CMS published a Fact Sheet along with the regulations.

OPPS payment update. OPPS payment rates for CY 2017 are increasing by an Outpatient Department (OPD) fee schedule increase factor of 1.65 percent, slightly higher than the 1.55 percent update from the Proposed rule. The update is calculated based on the hospital inpatient market basket increase of 2.7 percent, minus the multifactor productivity adjustment of 0.3 percent and a 0.75 percent point adjustment required by the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). CMS estimates that total OPPS provider payments for CY 2017 will be $773 million, accounting for a 2 percent reduction in payments for hospitals failing to meet quality reporting requirements (see below). Certain rural sole community hospitals (SHCs), including essential access community hospitals (EACHs), will receive a 7.1 percent adjustment applicable to all services paid under OPPS excluding separately payable drugs and biologicals, devices paid under the pass-through payment policy, and items paid at charges reduced to cost. There will also be additional payments provided to cancer hospitals so that their payment-to-cost ration (PCR) after the additional payments is equal to the average PCR (0.91) for other OPPS hospitals.

ASC payment update. Payment rates under the ASC payment system will increase by 1.9 percent—higher than the Proposed rule update of 1.7 percent—for ASCs that meet the quality reporting requirements (see below). The increase is based on the percentage increase in the Consumer Price Index for all urban consumers (CPI-U), which is 2.2 percent, minus the ACA-mandated 0.3 percent multifactor productivity adjustment. CMS estimates that total ASC payments for CY 2017 will increase by $177 million from estimated CY 2016 payments.

Quality reporting. The Final rule with comment period addressed changes to the Hospital Outpatient Quality Reporting (OQR) and ASC Quality Reporting (ASCQR) Programs. CMS finalized its proposals for the Hospital OCR and ASCQR Programs CY 2018 payment determinations and subsequent years on public display of data online and 30 days of preview time for hospitals and ASCs. It also finalized proposals for the CY 2019 payment determinations and subsequent years allowing 90 days for filing extraordinary circumstances extensions or exemptions requests from the date that the extraordinary circumstance occurred, and seven proposed measures for both quality-reporting programs for the CY 2020 payment determination and subsequent years.

Pain management concerns. CMS listened to providers and other stakeholders’ concerns that the pain management dimension of the Hospital Value-Based Purchasing (VBP) Program created under section 3001 of the ACA, which ties payments to performance measures, could create a financial incentive to prescribe unnecessary opioids. The pain-management dimension, therefore, will be removed from the Hospital VBP Program beginning with the fiscal year (FY) 2018 program years.

Off-campus PBDs. Section 603 of the Bipartisan Budget Act of 2015 (P.L. 114-74) removes OPPS payment for items and services furnished in off-campus PBDs; instead, beginning January 1, 2017, these items and services will be paid "under the applicable payment system" (see Congress’s new provider-based provision—hospitals face significant changes and many unanswered questions, December 10, 2015). This provision is intended to prevent Medicare from paying a higher rate for the same services depending on where the services are provided. CMS finalized the exceptions it proposed and established that the MPFS is the "applicable payment system" for most nonexcepted items and services furnished by nonexcepted off-campus PBDs. The Interim final rule with comment period established new site-of-service payment rates under the MPFS to pay nonexcepted off-campus PBDs for nonexcepted items and services provided, and established a new claims processing modifier for that purpose.

CMS declined to address off-campus PBDs that were in the process of being built on November 2, 2015, the date of enactment of the Bipartisan Budget Act, which are not qualified to be excepted as a grandfathered facility (see Provider-based billing moratorium concerns? CMS wants to hear them, April 26, 2016). There is pending legislation, H.R. 5273, that would account for these "mid-build" facilities by allowing them to be grandfathered into the OPPS rates (see Lawmakers lend hospitals helping hand to improve patient care, May 19, 2016); however, that bill has been in the Senate Finance Committee since before the Proposed rule was published and no further action has been taken.

EHR incentive programs. The Final rule with comment period made changes to the objectives and measures for the Medicare electronic health records (EHR) Incentive Program, which rewards hospitals for the "meaningful use" of EHR. Under both Modified Stage 2 in 2017 and Stage 3 in 2017 and 2018, CMS eliminated the Clinical Decision Support and Computerized Provider Order Entry objectives and measures for eligible hospitals and critical access hospitals (CAHs). This change is in response to input received from hospitals, hospital associations, health systems, and vendors expressing concerns about the established measures, and should reduce hospital administrative burdens. CMS also changed the EHR reporting period in CYs 2016 and 2017 for new participants, and made a one-time significant hardship exemption from the 2018 payment adjustment for certain new participants who are transitioning to the Merit-Based Incentive Payment System (MIPS) in 2017.

Other provisions. The Final rule with comment period also addressed:

  • conditions for coverage (CfCs) for organ procurement organizations (OPOs);
  • revisions to the outcome requirements for solid organ transplant programs, transplant enforcement, and for transplant documentation requirements;
  • the creation of 25 new comprehensive ambulatory payment classifications (C-APCs);
  • minor changes to certain chronic care management (CCM) scope-of-service elements;
  • payment rate determinations for device-intensive procedures;
  • the discontinuation of one modifier to identify unrelated outpatient laboratory tests on claims;
  • the alignment of packaging logic for conditional packaging status indicators; and
  • a requirement for a modifier on claims for X-rays taken using film.

Effective date and comment period. The Final rule with comment period and Interim final rule with comment period will publish in the Federal Register on November 14, 2016. They are effective on January 1, 2017, with comments due on December 31, 2016, to be guaranteed consideration.

MainStory: TopStory NewsStory AgencyNews ReimbursementNews CMSNews ASCNews CoPNews EHRNews HITNews PartBNews OrganNews OPPSNews QualityNews

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