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From Health Law Daily, July 7, 2016

Patient-focused and physician-supporting changes proposed for OPPS and ASCs

By Kathryn S. Beard, J.D.

Outpatient hospitals and ambulatory surgical centers (ASCs) would face fewer location-based payment discrepancies under proposed payment policy changes for calendar year (CY) 2017. CMS proposed payment updates for the hospital outpatient prospective payment system (OPPS) and ASC payment system in an advance release, with an accompanying fact sheet, that also addresses section 603 of the Bipartisan Budget Act of 2015 (P.L. 114-74), flexibility in the Medicare electronic health records (EHR) Incentive Program, new quality reporting measures, and physicians’ concerns about pain management. The Proposed rule will publish in the Federal Register on July 14, 2016; comments are due to CMS by September 6.

Payment updates. The Proposed rule includes updates for the OPPS and ASC Payment System that account for a multi-factor productivity (MFP) adjustment. CMS proposed updating OPPS rates by 1.55 percent for CY 2017, based on the projected hospital basket increase of 2.8 percent, minus a 0.5 percent MFP adjustment and a 0.75 percent decrease required by section 3401 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). Based on that rate update, CMS estimates that hospitals paid under the OPPS will see a 1.6 percent payment increase in CY 2017.

For ASCs, annual payment updates are based on the percentage increase in the Consumer Price Index for all urban consumers (CPI-U), which is projected to be 1.7 percent in CY 2017. That rate is decreased by a projected 0.5 percent MFP adjustment required by section 3401 of the ACA, resulting in an overall update factor of 1.2 percent.

Off-campus provider-based departments (PBDs). Section 603 of the Bipartisan Budget Act of 2015 requires that, beginning January 1, 2017, items and services furnished by "new" off-campus PBDs, other than dedicated emergency departments, will be unable to receive OPPS payments and will instead be reimbursed in accordance with otherwise applicable payment systems (see Congress’s new provider-based provision—hospitals face significant changes and many unanswered questions, December 10, 2015). This provision prevents Medicare from paying a higher rate for the same services depending on where the services are provided, and should save the program approximately $500 million in 2017. To implement section 603, CMS proposed exceptions for certain items and services, and accounted for service expansions, relocations, and changes of ownership. Under the Proposed rule, the Medicare Physician Fee Schedule (PFS) would be the "applicable payment system" for the majority of non-excepted items and services furnished in an off-campus PBD as a one-year transitional policy. The agency wants to eventually allow a non-excepted off-campus PBD to bill and be paid for its non-excepted items and services under an applicable Part B payment system other than OPPS, and seeks comments on how it could implement this plan in CY 2018.

The Proposed rule does not 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, and therefore 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).

Pain management concerns. The Hospital Value-Based Purchasing (VBP) Program created under section 3001 of the ACA ties payments to performance measures, including a pain management dimension. Providers and other stakeholders have told CMS that they are concerned about the pain management dimension putting pressure on staff to prescribe unnecessary opioids (see White House writes a prescription for better drug abuse prevention, October 22, 2015). Although the agency "is not aware" of scientific proof of a link between patient survey questions about pain management and opioid prescription practices, it nevertheless proposed removing the pain management dimension for purposes of the Hospital VBP Program "in an abundance of caution." The survey will continue to ask about pain management, as it is an important aspect to delivering quality care, and CMS is developing and testing alternative questions to remove any potential ambiguity. Other Hospital VBP Program requirements will be in an upcoming Final rule covering the fiscal year 2017 hospital inpatient prospective payment system (IPPS).

Quality measures reporting. CMS proposed adding seven measures to both the Hospital Outpatient Quality Reporting (OQR) and the ASC Quality Reporting (ASCQR) Programs for CY 2020 and subsequent years. Beginning with CY 2018, the agency plans to publicly display OQR and ASCQR data on the Hospital Compare website (or another CMS site) as soon as possible after data submission. Hospitals and ASCs would have 30 days to preview data. Beginning with CY 2019, CMS would double the Extraordinary Circumstances Exceptions request deadline from 45 days to 90 days.

EHR Incentive Program. In a recent Proposed rule for updates to the physician fee schedule (81 FR 28162, May 9, 2016), CMS set forth a plan to streamline EHR reporting requirements to allow additional flexibility and improved patient outcomes (see Physician reporting streamlined, less burdensome under flexible Quality Payment Program, April 28, 2016). Under this Proposed rule, the agency took similar steps for hospitals participating in the EHR Incentive Program by decreasing the reporting period from a full calendar year to 90 days for returning participants, as well as accommodations for new participants and hardship exemptions.

Other proposals. The Proposed rule addresses many other aspects of the OPPS and ASC Payment System. These include:

  • 25 new comprehensive ambulatory payment classifications (C-APCs) and three new clinical families to accommodate new C-APCs;
  • policy changes for status assignment methodology and low-volume payments for device-intensive procedures;
  • removing six procedures—four spine procedures and two laryngoplasty procedures—from the Medicare inpatient-only (IPO) list;
  • ancillary service packaging policy refinements to allow packaging logic at the claim level rather than based on the date of service, expanding a packaging exception, and discontinuing a redundant modifier;
  • rate setting for the partial hospitalization program (PHP) by replacing a two-tiered structure with a single rate by provider type and implementing an outlier payment cap; and
  • updating the Medicare conditions of participation for organ transplant programs to increase the outcome requirements standard for one-year patient and graft survival threshold, and to allow more donor information to be transmitted electronically to reduce hard copy documentation.

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

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