CMS proposes to limit the expansion of excepted services at off-campus PBDs

On July 25, 2018, the Centers for Medicare & Medicaid Services (CMS) released the proposed Calendar Year (CY) 2019 Hospital Outpatient Prospective Payment  (OPPS) Rule proposing, among other changes, to further restrict payment for services furnished in off-campus outpatient departments of a provider (off-campus PBDs). 

Specifically, CMS proposes that beginning in CY 2019, if an excepted off-campus PBD furnishes services from any “clinical family” of services  from which it did not previously furnish services during a baseline period, the services from the new clinical family will not be covered as outpatient department (OPD) services and will not be paid under OPPS, and will instead be paid under the Medicare Physician Fee Schedule (MPFS).  CMS defines 19 clinical families of services in Table 32 of the Proposed Rule.

The baseline period during which excepted off-campus PDBs must have previously furnished and billed services under OPPS in a clinical family is from November 1, 2014 through November 1, 2015.  For excepted off-campus PBDs that did not furnish services under OPPS until a date beginning after November 1, 2014, CMS is proposing the baseline period to begin on the first date the off-campus PBD furnished covered OPD services prior to November 2, 2015. Similarly, for providers that qualified for the mid-build exception, the baseline period would be a one year period beginning on the first date the off-campus PBD furnished a service billed under OPPS. In addition, CMS is proposing to revise 42 CFR 419.48 to limit the definition of “excepted items and services” in accordance with the Proposed Rule.

“PO” modifier for off-campus services and “PN” modifier for non-excepted items and services

CMS previously proposed the clinical family concept in the CY 2017 OPPS proposed rule, but did not finalize the policy. But CMS indicated it would  continue to monitor the volume of services at excepted off-campus PBDs  by requiring hospitals to use the “PO” modifier for all claims for services furnished in off-campus PBDs to determine whether it should further limit service-line expansion in future rulemaking. The current clinical family proposal is the latest attempt to curtail service-line expansion in excepted off-campus PBDs. Excepted off-campus PBDs can continue to submit claims for non-excepted items and services, including services in new clinical families, on an institutional claim form using the “PN” modifier.

Public comment  

CMS is seeking public comments on alternative methodologies to limit the expansion of services, and on the proposed clinical families concept, including the defined clinical families and whether any specific types of hospitals should be excluded from the new limitations (e.g., rural sole community hospitals).  

CMS will publish the CY 2019 OPPS Proposed Rule in the Federal Register on July 31, 2018.