Center for Medicare & Medicaid Services (CMS) has released its Final Rule for Hospital Outpatient Prospective Payment System OPPS) for CY2017 with significant implications to hospital outpatient departments.
Let me first give you the good news. For CY 2017, CMS is updating OPPS rates by 1.65 percent. 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. After considering all other policy changes finalized under the OPPS, including estimated spending for pass-through payments, CMS estimates a 1.7 percent payment increase (before taking into account changes in volume and case mix) for hospitals paid under the OPPS in CY 2017.
Now a little background before the not so good news. Over the last few years hospitals have aggressively acquired physician practices and gained much with such acquisitions because the hospital OPPS rates were higher than MPFS of independent practices. There has been quite a bit frustration over this discrepancy resulting in a regulatory change by US Congress (SECTION 603 OF THE BIPARTISAN BUDGET ACT OF 2015 – aka Site Neutral Payments Provision) and now CMS is trying to fix this gap and equalize the playing field.
As required by the statute, the final rule with comment period provides that certain items and services furnished by certain off-campus Provider Based Departments (PBDs) shall not be considered covered outpatient department services for purposes of OPPS payment and shall instead be paid “under the applicable payment system” (which will be Medical Physician Fee Schedule (MPFS) beginning January 1, 2017. In order to make the transition convenient and to reduce the burden of the change, CMS has identified certain items and services are exceptions from this rule – meaning that these items and services can still be billed at the OPPS rates.
Physicians in PBDs furnishing non-excepted services will continue to be paid on the professional claim and will be paid at the facility rate under the MPFS consistent with current payment policies for physicians practicing in an institutional setting. However hospitals the payment rate for the technical component of the services will generally be 50 percent of the OPPS rate.
The second significant change is that CMS believes that a basic tenet of a prospective payment system is the packaging of all integral, ancillary, supportive, dependent, or adjunctive services into primary services. For CY 2017, CMS is finalizing policy refinements with respect to packaging. Packaging Based on Claim instead of Based on Date of Service. CMS is finalizing its proposal to align the packaging logic for all of the conditional packaging status indicators so that packaging would occur at the claim level (instead of based on the date of service) to promote consistency and ensure that items and services that are provided during a hospital stay that may span more than one day are packaged according to OPPS packaging policies.
Changes in Hospital Value Based Purchasing Program (VBP)
CMS received feedback that some stakeholders are concerned about the pain management dimension questions being used in the Hospital VBP Program, believing 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. Keeping this in view, in the CY 2017 OPPS/ASC final rule with comment period, CMS is finalizing its proposal to remove the pain management dimension of the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey for purposes of the Hospital VBP Program, beginning with the FY 2018 program year. CMS is also developing and field testing alternative questions related to provider communications and pain in order to remove any potential ambiguity in the HCAHPS survey.
Changes to Hospital Outpatient Quality Reporting Program (OQR)
The Hospital OQR Program is a quality reporting program for outpatient hospital services. The Hospital OQR Program requires hospital outpatient facilities to meet certain requirements, or receive a reduction of 2.0 percentage points in their annual payment update for failure to meet these requirements. In the CY 2017 OPPS/ASC final rule, CMS is finalizing the addition of seven measures to the Hospital OQR Program for the CY 2020 payment determination and subsequent years. CMS did not propose any changes to the CY 2018 and CY 2019 Hospital OQR Program measure sets, which include 26 measures—25 required and one voluntary.
Ambulatory Surgical Center Quality Reporting (ASCQR) Program
The ASCQR Program is a pay-for-reporting program that requires ambulatory surgical centers to meet certain requirements or receive a reduction of 2.0 percentage points in their annual payment update for failure to meet the requirements. In the CY 2017 CMS is finalizing the addition of seven measures to the ASCQR program measure set for the CY 2020 payment determination and subsequent years. CMS did not propose any changes to the CY 2018 and CY 2019 ASCQR Program measure sets, which include 12 measures—11 required and one voluntary.