CMS 2017 OPPS & MPFS Final Rules: Top-Level Takeaways

By Leah Ralph, Director of Health Policy, ACCC

Centers_for_Medicare_and_Medicaid_Services_logoThis week the Centers for Medicare & Medicaid Services (CMS) released the final CY 2017 Hospital Outpatient Prospective Payment System (OPPS) and Medicare Physician Fee Schedule (MPFS) rules. ACCC is currently analyzing the rules and will hold a webinar for members with more in-depth information in the coming weeks. Below are some key highlights.

Outpatient Prospective Payment Systems CY 2017 Final Rule

CMS estimates that the policies in the final rule will increase OPPS payments by 1.7% in 2017. The big news: in the final rule, the agency goes forward with the site-neutral payment provision for new off-campus provider based departments (PBDs):

  • Newly built or acquired off-campus PBDs: CMS finalized its proposal to no longer allow new off-campus PBDs (that were not billing under OPPS as of November 2, 2015) to bill under OPPS beginning January 1, 2017. CMS is finalizing the Medicare Physician Fee Schedule (MPFS) as the applicable payment system, but is also establishing new MPFS rates specifically so that hospitals can be paid directly for these new (what CMS is calling “non-excepted”) items and services. Hospitals will be paid under the MPFS at these new rates, which will be billed on the institutional claim and must be billed with a new claim line modifier “PN” to indicate that an item or service is non-excepted. For 2017, the payment rate for these new services will generally be 50% of the OPPS rate (with some exceptions, including payment for separately payable drugs, which will not be reduced). Packaging and certain other OPPS policies will continue to apply. Important: CMS specifically notes that items and services provided at new off-campus PBDs will continue to be reported on the hospital cost report and therefore eligible for 340B drug discounts if the parent hospital is a 340B eligible hospital. Find discussion of the impact of this policy on 340B discounts on pages 648-649 of the final rule.
  • Existing off-campus PBDs: CMS largely backed off its proposal to limit the expansion of outpatient items and services that can be billed under OPPS for existing off-campus provider-based facilities. PBDs that were billing under OPPS prior to November 2, 2015, can continue to bill for those services under OPPS—and expand those services beyond the 19 clinical families CMS had originally defined in the proposed rule. However, CMS has said that these facilities must remain at the same physical address to continue to bill under OPPS unless it is an extraordinary circumstance, such as a natural disaster. This may be short lived though as CMS also indicated it will continue to look at this and that the agency is “interested in what data…could be collected that would allow us to implement a limitation on service expansion” for these exempted facilities.
  • Packaging Policies:
    • CMS is finalizing its proposal to create 25 additional C-APCs, which are primarily major surgery APCs within the various existing C-APC clinical families.
    • The agency is finalizing its proposal to base packaging on a claim, rather than on date of service, so that services that are provided during a hospital stay that spans more than one day are packaged.
    • CMS finalized the expansion of a policy that excludes molecular pathology tests from CMS’ laboratory packaging policy to other Advanced Diagnostic Laboratory Tests (ADLTs).

Physician Fee Schedule CY 2017 Final Rule

The CY 2017 Medicare Physician Fee Schedule final rule focuses on policies aimed at improving pay for primary care, chronic care management, mental health care, and diabetes prevention. The rule’s provisions are expected to have a neutral impact on hematology/oncology, radiation oncology, and radiation therapy centers, and a -1% impact on radiology. Select cancer-related provisions include:

  • Payment for Mammography Services: CMS finalized a new coding framework based on new CPT coding for mammography services. The coding revision reflects use of current technology used in furnishing these services, including a transition from film to digital imaging equipment and elimination of separate coding for computer-aided detection services. CMS is maintaining current valuation for the technical component of mammography services in order to implement coding and payment changes over several years.
  • Medicare Telehealth Services: CMS finalized the addition of several codes to the list of services eligible to be furnished via telehealth, including: advance care planning services, end-stage renal disease related services for dialysis, and critical care consultations furnished via telehealth using new Medicare G-codes. CMS is also finalizing payment policies related to the use of a new place of service code specifically designed to report services furnished via telehealth.
  • Appropriate Use Criteria for Advanced Imaging Services: The Protecting Access to Medicare Act (PAMA) of 2014 established a new program to promote the use of appropriate use criteria (AUC) for advanced diagnostic imaging services under fee-for-service Medicare. As a component of the Medicare AUC program, CMS finalized the first eight priority clinical areas, which include cancer of the lung (primary or metastatic, suspected or diagnosed). CMS also finalized the clinical decision support mechanism (CDSM) application to allow for preliminary or full qualification; the deadline for the first round of applications is March 1, 2017.

View fact sheets for both rules here: OPPS and PFS.

 

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