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Hospital Groups Blast OPPS Rule Proposal

By HealthLeaders Media News  
   July 08, 2016

Medicare's proposed 2017 reimbursement rules for outpatients include a reduced payment rate for medical products and services provided at many hospital-owned outpatient facilities.

Proposed changes to Medicare's Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System are drawing jeers from hospitals.

"It appears that CMS is aiming to freeze the progress of hospital-based healthcare in its tracks," said the American Hospital Association in response to the proposal that would increase OPPS payments by 1.6% and boost ASC payments by 1.2% in 2017.

"The items in this proposal are designed to improve care and value when Medicare beneficiaries receive care in an outpatient setting," Andy Slavitt, acting administrator of the Centers for Medicare & Medicaid Services, said in a statement posted to the CMS website Wednesday.


CMS outlined key elements of the proposed rule changes:

  • Reimbursement at OPPS rates for medical products and services provided at many hospital outpatient facilities would be discontinued. Reimbursement would be at lower rates set under the Medicare Physician Fee Schedule, which governs payments for products and services rendered in physician offices. The payment differential "has encouraged hospitals to acquire physician offices in order to receive the higher rates," CMS says.
  • Removing pain management questions from the CMS Hospital Value-Based Purchasing program's patient survey would be omitted. Provider have voiced concerns that the questions "unduly influence prescribing practices," CMS says.
  • Reporting requirements for hospitals that participate in the Medicare EHR Incentive Program would be eased.
  • New quality measures would be added to the Hospital Outpatient Quality Reporting Program and Ambulatory Surgical Center Quality Reporting Program. The measures "are focused on improving patient outcomes and experience of care," CMS says.

Some medical products and services would be exempt from the proposed reimbursement change for hospital outpatient facilities. Include under the exemptions: All products and services provided at a "dedicated emergency department" as well as products and services billed before Nov. 2, 2015.

Hospital Groups React

America's Essential Hospitals, a Washington, DC-based advocacy group that represents more than 200 safety net hospitals, reacted harshly to the proposed reimbursement rate change for hospital outpatient facilities.

"The regulatory provisions CMS proposes for new off-campus hospital outpatient departments fail to recognize the practical challenges of establishing and sustaining healthcare facilities for vulnerable populations," it said.

The agency's decision to not only limit flexibility, but to withhold hospital payments altogether, will perpetuate healthcare deserts—urban and rural pockets of poor access to care that persist in all 50 states and the District of Columbia," Bruce Siegel, MD, MPH, president and CEO of America's Essential Hospitals, said in a media statement.

The American Hospital Association (AHA) also blasted the proposed rule changes for hospital outpatient facility reimbursements.

"It appears that CMS is aiming to freeze the progress of hospital-based healthcare in its tracks. We will submit detailed comments to the agency urging them to revise these misguided policies so that hospitals can continue to provide the highest quality healthcare to their communities," Tom Nickels, executive vice president for government relations and public policy at the AHA, said in a statement posted Wednesday on the group's website.

CMS will accept comments on the proposal through Sept. 6.

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