2017 OPPS final rule – Site-neutral payments for new off campus provider-based departments

CMS finalizes 2017 Hospital Outpatient Prospective Payment System rule

On November 1, 2016, the Centers for Medicare & Medicaid Services (CMS) finalized changes to the Hospital Outpatient Prospective Payment System (OPPS). CMS’ announcement with a link to the OPPS final rule is available here. The Bricker & Eckler Health Care group will author a series of publications summarizing the significant changes/issues in the OPPS final rule; each publication will be specific to an area of law impacted by the OPPS final rule. The first publication on finalized Meaningful Use rules is available here. The second publication in the OPPS series is below. 

CMS issues final rule implementing Bipartisan Budget Act’s site-neutral payments for new off campus provider-based departments

On November 1, 2016, the Centers for Medicare & Medicaid Services (CMS) released the Calendar Year 2017 Hospital Outpatient Prospective Payment System (OPPS) Final Rule (the Final Rule), including final regulations implementing Section 603 of the Bipartisan Budget Act (the Budget Act) enacted last November.  

Under the Budget Act, items and services furnished in off-campus provider-based departments (off-campus PBDs), other than dedicated emergency departments, that began billing under OPPS on or after November 2, 2015, will not be paid under OPPS after 2016. Instead, they will be paid under other Part B payment systems beginning January 1, 2017. In the same document, CMS also released an interim final rule with comment period (the Interim Final Rule) to establish payment rates for non-excepted items and services billed by a non-excepted off-campus PBD. The Final Rule and the Interim Final Rule will be effective January 1, 2017.

As discussed in one of our previous publications, CMS issued a proposed rule on July 6, 2016. The Final Rule contains several important modifications to the proposed rule, as follows:

• Beginning January 1, 2017, the Medicare Physician Fee Schedule (MPFS) at the non-facility rate will be the applicable payment system for the majority of non-excepted items and services furnished by non-excepted off-campus PBDs. However, CMS is establishing new site-of-service payment rates under the MPFS to pay non-excepted off-campus PBDs for furnishing non-excepted items and services on the institutional claim form with a newly established processing modifier.
• CMS is not finalizing its proposal that existing off-campus PBDs that add services in new clinical families on or after November 2, 2015, will not be permitted to bill under OPPS for the new services and will receive the site-neutral payments for those services beginning in 2017.Instead, CMS is seeking comments on potential limitations on clinical service line expansion or volume of services by non-excepted off-campus PBDs.
• Existing off-campus PBDs that relocate after November 2, 2015, will lose their excepted status and will not be permitted to bill under OPPS but will receive the site-neutral payments. However, CMS will allow excepted off-campus PBDs to relocate temporarily for extraordinary circumstances out of the hospital’s control (e.g., natural disaster, seismic building code requirements, public health and safety) without losing their excepted status. 
• Existing PBDs that undergo a “change of ownership” after November 2, 2015, will keep their excepted status only if the new owner assumes the Medicare provider agreement from the prior owner. Additionally, an individual excepted off-campus PBD cannot be transferred from one hospital to another and maintain excepted status.

Early reactions to the Final Rule from industry stakeholders are positive. Although CMS is finalizing most of its proposals, some of the modifications CMS made in the Final Rule address concerns raised in response to the proposed rule and will offer much needed flexibility, such as the ability to add new services in excepted off-campus PBDs subject to potential limits. Likewise, the new site-of-service rates to be established under the MPFS for non-excepted items and services billed on the institutional claim form will allow hospitals to bill for services not previously billable under the MPFS. 

Interested parties can submit comments on the Final Rule and the Interim Final Rule to CMS through December 31, 2016.

Bricker and Eckler will follow up soon with a full summary of the Final Rule and its implications.