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CMS Finalizes 2017 Outpatient-Service Payment Rules

News  |  By HealthLeaders Media News  
   November 03, 2016

The pay regulations for 2017 are expected to increase Medicare payments to hospitals for outpatient services by 1.7%.

Details about the 2017 Outpatient Prospective Payment System (OPPS) final rule, which also finalizes changes to the Ambulatory Surgery Center (ASC) Payment System were announced by the Centers for Medicare & Medicaid Services Tuesday.

The final rule includes new Medicare Physician Fee Schedule (MPFS) rates for items and services rendered to Medicare beneficiaries at off-campus outpatient departments owned by hospitals.

Under the 2017 OPPS final rule, CMS is raising OPPS payment rates 1.65%, according to a fact sheet. "The change is based on the projected hospital market basket increase of 2.7 percent minus both a 0.3 percentage point adjustment for multi-factor productivity (MFP) and a 0.75 percentage point adjustment required by law."

Once all of the outpatient payment rule changes announced Tuesday are accounted for, CMS estimates next year's Medicare payments to hospitals for outpatient services will be slightly higher than 1.65%. That is "before taking into account changes in volume and case mix" for hospitals paid under the OPPS, the fact sheet says.

New Payment Rules for Off-Campus Outpatient Departments

CMS designates hospital off-campus outpatient departments as off-campus provider-based departments (PBDs).

Under the interim final rule for PBDs, CMS is establishing "a billing mechanism for hospitals to report and receive payment under the MPFS" for items and services rendered to Medicare beneficiaries at PBDs. This new billing mechanism is set to be implemented Jan. 1.

Most items and services rendered at PBDs will receive reimbursement at 50% of the OPPS rate, according to CMS. There are PBD items and services that will be exempt from the new payment mechanism, including payment for separately payable drugs, which will not be subject to the lower payment rate.

The interim final rule for PBDs establishes three exemptions for the new payment rules that will keep some off-campus outpatient departments under the OPPS reimbursement regulations:

  • Dedicated emergency departments
  • PBDs that billed for services under the OPPS before Nov. 2, 2015, and have not "impermissibly relocated or changed ownership."
  • PBDs that are located within 250 yards of a hospital or a "remote location" of a hospital.

Other Payment and Quality Measure Changes

The payment rules also revise the Medicare inpatient-only (IPO) list, which designates medical procedures that must be paid under the Inpatient Prospective Payment System (IPPS).

Post-Surgical Opioid Prescriptions Targeted for Massive Cuts in MI

Services rendered under the IPPS are reimbursed at higher rates than services rendered under the OPPS. For next year, CMS is removing seven procedures from the IPO list: five spine operations and two laryngoplasty procedures.

One of the most significant quality-measure changes is removal of "pain management dimension questions" from the Hospital Value-Based Payment (VBP) Program. CMS made this change based on concerns "that the linkage of these particular questions to the Hospital VBP Program payment incentives creates pressure on hospital staff to prescribe more opioids in order to achieve higher scores on this dimension."

CMS plans to accept public comments on the 2017 OPPS and ASC final rule as well as the interim final rule on MPFS rates for off-campus outpatient departments through Dec. 31. The 2017 OPPS and ASC final rule is slated for publication in the Federal Register on Nov. 14.

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