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CMS Reveals Site-neutral Payment Provisions in 2017 OPPS Proposed Rule

By Medicare Compliance Watch  
   July 07, 2016

"This proposal will be very challenging for hospitals that have community physicians practice at their off-campus outpatient departments that will no longer be paid under OPPS," says one expert.

This article first appeared July 7, 2016 on the Medicare Compliance Watch website.

CMS is looking to implement the Section 603 provisions of the Bipartisan Budget Act of 2015 regarding off-campus, provider-based departments (PBD) by January 1, 2017, according to the 2017 OPPS proposed rule, released yesterday.

The agency is proposing to pay the nonfacility or office Medicare Physician Fee Schedule (MPFS) amount to the performing/supervising physician and preclude hospitals from billing on a UB-04 form or receiving OPPS payment for services performed at these locations for 2017, but plans to explore other options for 2018 and beyond.

Physicians would be paid at the higher nonfacility rate of the MPFS, but only hospitals that have employed or contracted physicians that reassign their billing to the hospital would get paid under the MPFS for these services.

Hospitals would be able to bill claims on CMS-1500 forms for physicians who have already reassigned their billing to the hospital, as in the case of employed physicians. Otherwise, hospitals would have the option of enrolling the location as the type of provider or supplier it wishes to bill to meet the requirements of that payment system (e.g., ambulatory surgery center or group practice).


2017 OPPS Proposed Rule: CMS Tweaks Packaging Logic, Deletes Modifier


"This proposal will be very challenging for hospitals that have community physicians practice at their off-campus outpatient departments that will no longer be paid under OPPS," says Valerie Rinkle, MPA, lead regulatory specialist and instructor for HCPro, a division of BLR, in Middleton, Massachusetts.

"These physicians would bill with the office place of service code and the hospital would have to figure out how to get compensated," she says. "This will likely require hospitals to re-write their agreements with these physicians."

CMS' proposal for operationalizing Section 603 comes as somewhat of a surprise since the burden is being placed squarely on providers, with CMS' own systems not ready to allow existing billing practices, says Jugna Shah, MPH, president and founder of Nimitt Consulting, Inc.

"Some providers hoped CMS would delay implementation and others speculated that modifier –PO might get repurposed for CY 2017," says Shah. "Perhaps commenters will be able to offer CMS solutions that will minimize provider operational burden."

CMS writes in the proposed rule:

We intend the policy we are proposing in this proposed rule to be a temporary, 1-year solution until we can adapt our systems to accommodate payment to off-campus PBDs for the non-excepted items and services they furnish under the applicable payment system, other than OPPS.

CMS would allow certain excepted items and services to still be billed under the OPPS:

  • All items and services furnished in a dedicated emergency department
  • Items and services furnished in a hospital department within 250 yards of a remote location of the hospital and within 250 yards of the main hospital (i.e., on-campus)
  • Items and services that were furnished and billed by an off-campus PBD prior to November 2, 2015

Hospitals could also continue to bill for services at these facilities that are not paid under the OPPS, such as laboratory services.

Off-campus PBDs built and billing before November 2, 2015, would retain grandfathered status or what CMS calls "excepted" status and continue billing under the OPPS, but the proposed rule includes some caveats. While the agency proposes that a change in ownership would not change an off-campus PBD's excepted status as long as the new owner assumes the same provider agreement, a change in location would. However, CMS is requesting comments on this provision and whether certain exceptions should apply for situations beyond a hospital's control such as a natural disaster.

Off-campus PBDs that expand services beyond those offered and billed before November 2, 2015, will not be allowed to bill them under the OPPS. CMS has proposed clinical families based on APCs that would determine whether those expanded services would continue to be excepted (see Table 21 on page 342 of the proposed rule).

"The concept of tracking service expansion by APC will be extremely difficult to implement and operationalize," says Rinkle. "It would have been simpler for CMS to define this by revenue codes than APCs."

For more information, see CMS' fact sheet. Comments are due by September 6 and a final rule is expected by November 1. 

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