Narrow exceptions offered in final site-neutral payment rule from CMS

CMS has finalized the rule changing how hospital off-campus facilities are reimbursed within its 2017 hospital Outpatient Prospective Payment System (OPPS) changes, largely ignoring concerns from the American Hospital Association (AHA) about the impact of site-neutral payment.

The rule, first proposed in July, was the agency’s response to a provision in the 2015 Bipartisan Budget Act. Off-campus facilities won’t be paid the same as hospital-based outpatient departments if they started billing Medicare after Nov. 2, 2015, the day the act was signed. They will instead be reimbursed under the Medicare Physician Fee Schedule (MPFS).

“We spoke to stakeholders across the outpatient community who care about the quality and value of care that Medicare patients receive,” said Sean Cavanaugh, Deputy Administrator and Director of the Center for Medicare at CMS. “The policies finalized in today’s rule will not only improve the value of care provided to Medicare beneficiaries, but are also responsive to health care providers who are crucial to outpatient care.”

While the AHA had called for the rule to be delayed and supported a bill to exempt off-campus buildings that were “under development” by Dec. 31, CMS offered only narrow exceptions in the final rule.

Off-campus departments which had to move temporarily or permanently “due to extraordinary circumstances outside of the hospital’s control, such as natural disasters” will still be paid under OPPS rates. The final rule also protected off-campus departments which change ownership if the new owners accept existing arrangements with Medicare providers.

CMS did offer some leeway on the items and services an expected off-campus department could continue to bill under the OPPS in 2017 and beyond. It remove a provision from the proposed rule which would have limited that list to the items and services “within a clinical family that were furnished and billed” as of Nov. 2, 2015.

Overall, CMS has estimated these changes could save Medicare $500 million annually.

Elsewhere in the rule, the OPPS and Ambulatory Surgical Center (ASC) payment rates were raised beyond what was initially proposed. CMS said OPPS payments are expected to increase by 1.7 percent in 2017 and ASC rates will go up by 1.9 percent.