CMS Releases 2017 OPPS Final Rule

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  • December 15, 2016
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The Centers for Medicare & Medicaid Services (CMS) has released the 2017 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System policy changes, quality provisions, and payment rates final rule with comment period. The OPPS Final Rule is scheduled for publication in the November 11 Federal Register. The Rule updates hospital outpatient prospective payment system rates by 1.7 percent and ASC rates by 1.9 percent, compared to 2016, according to CMS estimates.
Perhaps the biggest news in the 2017 OPPS Final Rule is the implementation of Section 603 of the Bipartisan Budget Act of 2015. Beginning Jan. 1, hospitals will be paid under the physician fee schedule at newly established rates for services furnished in off-campus provider-based hospital outpatient departments (with the exception of emergency department services). The payment rate for these services will generally be 50 percent of the OPPS rate. Currently, Medicare pays for the same services at a higher rate when provided in a hospital outpatient department, rather than a physician’s office.
As part of the Final Rule, CMS also finalizes its proposal “that the relocation of an existing hospital outpatient department will result in the HOPD losing its grandfathered status and being paid at the new rate, except in extraordinary circumstances.” However, CMS will not apply reduced payment to grandfathered HOPDs that expand services.

Additional measures in the new rule include:

  • CMS adds quality measures to the Hospital Outpatient Quality Reporting Program and the Ambulatory Surgical Center Quality Reporting Program.
  • CMS is “finalizing the removal of the pain management dimension of the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) Survey for purposes of the Hospital Value-Based Purchasing Program to eliminate any financial pressure clinicians may feel to overprescribe medications.”
  • “CMS is making changes under the Medicare EHR Incentive Program for eligible hospitals and critical access hospitals attesting to CMS, including hospitals that are eligible to participate in both the Medicare and Medicaid EHR Incentive Programs (dual-eligible hospitals), by eliminating the Clinical Decision Support (CDS) and Computerized Order Entry (CPOE) objectives and measures beginning in 2017. CMS is reducing a subset of thresholds for the remaining objectives and measures for Modified Stage 2 and Stage 3. Additional changes include allowing all returning participants in the EHR Incentive Programs to report on a 90-day EHR reporting period in 2016 and 2017.”
  • “CMS is also finalizing an application process for a one-time significant hardship exception to the Medicare EHR Incentive Program for certain eligible professionals in 2017 who are also transitioning to MIPS. These additions both increase flexibility, lower the reporting burden for providers, and focus on the exchange of health information and using technology to support patient care.”

CMS also will issue an interim final rule with comment period (IFC):

…to establish new payment rates under the Medicare Physician Fee Schedule (MPFS) for the items and services provided by certain off-campus provider-based departments for CY 2017. These payment rates are in lieu of finalizing a proposal, about which numerous commenters raised concerns, which would have precluded a hospital from directly billing Medicare at all for non-excepted items and services for 2017.
These new interim final rates being adopted in the IFC will permit hospitals to be paid for the furnishing of items and services that may no longer be paid under the OPPS, and we believe will reduce incentives for hospitals to acquire independent physician practices and convert the same service into more highly paid OPPS services. We welcome comments on the policies in the interim final rule and will make adjustments as necessary to the payment mechanisms and rates through rulemaking that could be effective in CY 2017.

Commenting on the new rules, the American Hospital Association (AHA) stated:

CMS’s final rule appropriately recognizes that providing no payment to new off-campus hospital clinics for the services they provide to patients was an untenable policy. We will evaluate the new payment level to ensure that it is fair and reasonable, and whether the agency will be able to implement it in an efficient manner for 2017. We appreciate the modifications CMS made to its proposal to allow existing hospital clinics to expand their services to meet the changing needs of their patients and communities without being penalized.

Keep a close eye here, and in upcoming issues of Healthcare Business Monthly, for more news on the 2017 OPPS Final Rule.

John Verhovshek
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About Has 575 Posts

John Verhovshek, MA, CPC, is a contributing editor at AAPC. He has been covering medical coding and billing, healthcare policy, and the business of medicine since 1999. He is an alumnus of York College of Pennsylvania and Clemson University.

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