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CMS Finalizes Outpatient Payment System Updates for 2018

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  • November 2, 2017
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CMS Finalizes Outpatient Payment System Updates for 2018

Hospital outpatient departments (HOPD) and ambulatory surgical centers (ASC) will see a small payment rate increase in 2018, provided quality reporting requirements are met. The Centers for Medicare & Medicaid Services (CMS) published, Nov. 1, a final rule for Outpatient Prospective Payment System (OPPS) and ASC Payment System (ASC PS) payment policies and rates that go into effect Jan. 1, 2018.
The final rule is over 1,000 pages, and will take some time to get through. Here are some of the highlights.
UPDATE: CMS published in the Dec. 27, 2017, Federal Register a corrections document to this final rule.


Payment Update: 1.35 percent

Medicare payments made under the OPPS will increase 1.35 percent, based on the hospital inpatient market basket percentage increase of 2.7 percent for inpatient services paid under the Inpatient Prospective Payment System (IPPS), minus the multi-factor productivity (MFP) adjustment of 0.6 percentage point, and minus a 0.75 percentage point adjustment required by the Affordable Care Act. Hospitals who fail to meet the hospital outpatient quality reporting requirements will receive a 2.0 percentage point reduction in payments (by applying a reporting factor of 0.989 to OPPS payments and co-payments for all applicable services).
CMS estimates the policies in the final rule will make the following financial impact:
OPPS payments to providers: +1.4 percent
Urban hospitals: +1.3 percent
Rural hospitals: +2.7 percent
Non-teaching hospitals: +2.9 percent
Minor teaching hospitals: +1.7 percent
Major teaching hospitals: -0.9 percent
Hospitals with voluntary ownership: +1.3 percent
Hospitals with propriety ownership: +4.5 percent
Hospitals with government ownership: no change

340B Drug Pricing: ASP minus 22.5 percent and new modifier reporting guidelines

Payments for separately payable drugs and biologicals acquired under the 340B program will be adjusted by the average sales price (ASP) minus 22.5 percent (instead of ASP plus 6 percent). Certain settings are exempt from this adjustment so CMS is implementing two modifiers to identify whether a drug billed under the OPPS and purchased under the 340B program is or isn’t subject to the payment reduction. Providers who are not excepted from the 340B payment adjustment will report modifier JG Drug or biological acquired with 340B Drug Pricing Program discount. Providers who are excepted from the 340B program should report modifier TB Drug or biological acquired with 340B Drug Pricing Program discount, reported for informational purposes.

Rural Adjustment Stays at 7.1 Percent

CMS will continue to apply a 7.1 percent adjustment to the OPPS payments of certain rural sole community hospitals (SCH), including essential access community hospitals (EACH). This adjustment does not apply to separately payable drugs and biologicals, devised paid under the pass-through payment policy, and items paid at charges reduced to cost.

Cancer Hospital Payment Adjustment: Down a Percentage Point

A target payment-to-cost (PCR) of 0.88 will be used to determine the 2018 cancer hospital payment adjustment.

Changes to the Inpatient-only List: TKA Gets a TKO

CMS is removing total knee arthroplasty (TKA) (CPT 27447) from the inpatient-only list, and precluding recovery audit contractors from reviewing TKA procedures for patient status for two years. Five other procedures are being removed from the inpatient-only list and one is being added. Removed for 2018 are:
43282 Laparoscopy, surgical, repair of paraesophageal hernia with implantation of mesh
43772 Laparoscopy, surgical, gastric restrictive procedure; removal of adjustable gastric restrictive device component only
43773 Laparoscopy, surgical, gastric restrictive procedure; removal and replacement of adjustable gastric restrictive device component only
43774 Laparoscopy, surgical, gastric restrictive procedure; removal of adjustable gastric restrictive device and subcutaneous port components
55866 Laparoscopy, surgical prostatectomy, retropubic radical, including nerve sparing, includes robotic assistance, when performed
Added for 2018 is:
92941 Percutaneous transluminal revascularization of acute total/subtotal occlusion during acute myocardial infarction, coronary artery or coronary artery bypass graft, any combination of intracoronary stent, artherectomy and angioplasty, including aspiration thrombectomy when performed, single vessel

Comprehensive APCs: Modifier CP Discontinued

There are no new or extensively revised APCs for 2018, but the data collection period for SRS claims with modifier CP ends Dec. 31, 2017. As such, modifier CP will no longer be used in 2018.

Packaging Policies: No Exceptions

CMS is removing the exception to conditionally package ancillary services assigned to APCs with a geometric mean cost of $100 or less (prior to packaging) for certain drug administration services, and conditionally packaging payment for low-cost drug administration services.

Payment Reduction and New Modifier for Certain X-rays

Payments for X-rays taken using computed radiography technology will be reduced by 7 percent between 2018 and 2022 and 10 percent in subsequent years. CMS is establishing modifier FX X-ray taken with film for use on claims for such services.


Payment Update: 1.2 Percent

ASCs will see a 1.2 percent increase in payments, provided quality reporting requirements are met under the ASC Quality Reporting Program. The increase is based on a projected CPI-U update of 1.7 percent minus a multi-factor productivity adjustment of 0.5 percentage point.

Three New ASC Covered Procedures

CMS is adding three procedures to the ASC Covered Procedures list:
22856 Total disc arthroplasty (artificial disc), anterior approach, including discectomy with end plate preparation (includes osteophytectomy for nerve root or spinal cord decompression and microdissection); single interspace cervical
22858 Total disc arthroplasty (artificial disc), anterior approach, including discectomy with end plate preparation (includes osteophytectomy for nerve root or spinal cord decompression and microdissection); second level, cervical (List separately in addition to code for primary procedure)
58572 Laparoscopy, surgical, with total hysterectomy, for uterus greater than 250 g

Laboratory DOS Policy Revised

CMS is adding an exception to the laboratory date of service (DOS) policy that generally permits labs to bill Medicare directly for advanced diagnostic lab tests and molecular pathology tests excluded from the OPPS packaging policy.

Measures Removed from the Hospital Outpatient Quality Reporting Program 2020 Payment Determination

CMS is delaying the following measures for the 2020 payment determination: OP-1 Median Time to Fibrinolysis; OP-4 Aspirin at Arrival; OP-20 Door to Diagnostic Evaluation by a Qualified Medical Professional; OP-21 Median Time to Pain Management for Long Bone Fracture; OP-25 Safe Surgery Checklist; OP-26 Hospital Outpatient Volume Data on Selected Outpatient Surgical Procedures; and OAS CAHPS survey-based measures OP-37a-e; and finalizing (with modifications to the proposed) OP-18c Median Time from Emergency Department Arrival to Emergency Department Departure for Discharged Emergency Department Patients – Psychiatric/Mental Health Patients.
CMS is also finalizing measures and policies for the 2019 and subsequent years’ payment determinations for the ASC Quality Reporting Program, removing: ASC-5: Prophylactic Intravenous Antibiotic Timing; ASC-6 Safe Surgery Checklist Use; and ASC-7 Ambulatory Surgical Center Facility Volume Data on Selected ASC procedures. CMS is delaying the OAS CAHPS Survey measures ASC-15a-e, beginning with the 2020 payment determination (2018 performance year).

We’ve Only Just Begun

You’ll need to read the final rule for specifics, or check back on the AAPC Knowledge Center for comprehensive topic-related articles in the coming weeks.

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Renee Dustman, BS, AAPC MACRA Proficient, is managing editor - content & editorial at AAPC. She holds a Bachelor of Science degree in Media Communications - Journalism. Renee has more than 30 years' experience in journalistic reporting, print production, graphic design, and content management. Follow her on Twitter @dustman_aapc.

No Responses to “CMS Finalizes Outpatient Payment System Updates for 2018”

  1. Sue Weimer says:

    Based on the new Inpatient only status for CPT code 92941, would you not receive re-imbursement if the patient was not admitted? Should you use the 92928 percutaneous transluminal coronary artery stent, with coronary angioplasty CPT code or would this be considered incorrect coding?