HFMA Executive Summary
On July 31, 2018, the Centers for Medicare & Medicaid Services (CMS) published a proposed rule updating payment rates under the hospital outpatient prospective payment system (OPPS) and the ambulatory surgical center (ASC) payment system for calendar year 2019 (CY 2019). Also included in the rule are updates and refinements to the requirements for the Hospital Outpatient Quality Reporting (OQR) Program and the ASC Quality Reporting (ASCQR) Program. Comments on the rule are due September 24, 2018.
OPPS Payment Updates
For CY 2019, CMS proposes a conversion factor of $79.546, compared with $78.636 in CY 2018. This 1.25% increase reflects the hospital inpatient market basket percentage increase of 2.8%, minus the proposed 0.8% multifactor productivity (MFP) adjustment, minus an additional 0.75% outpatient department (OPD) reduction required by the ACA. Hospitals that fail to meet the Hospital OQR program requirements, would be subject to an additional 2.0% payment reduction (1.25% – 2.0% = -0.75% OPD fee schedule update), resulting in a proposed reduced conversion factor of $77.955.
For CY 2019, CMS proposes to increase the outpatient fixed loss outlier threshold to $4,600, compared to $4,150 in CY 2018.
ASC Payment Updates
Instead of using the Consumer Price Index for All Urban Consumers (CPI-U) to measure the update factor for ASCs, CMS proposes to apply a hospital-market basket update to ASCs for an interim period of five years. CMS would use the hospital market basket update of 2.8 %, minus the MFP adjustment of 0.8 %, resulting in a proposed update of 2.0% ($46.500) for ASCs meeting quality reporting requirements. If the CPI-U had been used, the proposed update would have been 1.3%.
- ASCs that do not meet the quality reporting requirements would see a 2.0% reduction in payments, yielding no percentage update, or $45.589.
340B Drug Pricing Program
Effective January 1, 2019, CMS proposes to pay, under the PFS, the adjusted payment amount of average sales price -22.5% for separately payable drugs and biologicals acquired under the 340B Program when they are furnished by nonexcepted off-campus PBDs of a hospital. CMS notes that these payments will differ from the ASP+6% payment for drugs and biologicals made in physicians’ offices and other nonhospital settings. CMS is proposing to extend this policy to hospital OPDs subject to section 603 Bipartisan Budget Act of 2015.
Off-Campus Provider-Based Department Payment Cuts
In order to control unnecessary increases in the volume of covered hospital outpatient department services, CMS proposes to apply a physician fee schedule (PFS) payment rate to an outpatient clinic visit service provided at an off-campus PBD paid under the OPPS that would reduce payment for the clinic visit by 40%. Under current policy, CMS pays for services furnished in new off-campus PBDs opened after November 2, 2015, that are subject to section 603 Bipartisan Budget Act of 2015 at 40% of the OPPS rate. This change would be implemented in a non-budget neutral manner.
Collecting Data on Services Provided in Office-Campus Emergency Departments
CMS proposes to require off-campus provider-based emergency departments (EDs) to put a modifier on a claim indicating the service was provided in an off-campus ED. Currently, off-campus emergency department EDs that are provider-based to a hospital are not required to put a modifier on a claim like other off-campus provider-based departments (PBDs). Further, off-campus EDs are exempt from section 603 of the Bipartisan Budget Act of 2015 that does not allow off-campus PBDs that opened after November 2, 2015, to be paid under the OPPS.
Hospital Outpatient Quality Reporting (OQR) Program
CMS proposes to modify the factors it considers when removing measures from the Hospital OQR Program, and to remove 10 measures, one beginning with the 2020 payment determination, and the others beginning with 2021 payment. The total number of mandatory measures would be reduced from 21 previously adopted for the 2020 and 2021 payment determinations to 20 measures for 2020, and 12 measures for 2021 payment.
- For the ASCQR Program, CMS would also modify the factors it uses when considering the removal of measures, and remove 8 measures from the program, one of which is voluntary. The total number of mandatory measures would be reduced from 10 for the 2020 and 2021 payment determinations, to 9 measures in 2020, and 3 measures in 2021.
CMS estimates that the proposed total increase in payments under the OPPS for CY 2019 would be 1.3% (approximately $90 million). CMS estimates the total increase from the proposed changes, as well as from enrollment, utilization, and case-mix changes in Medicare expenditures (excluding beneficiary cost-sharing) under the ASC payment system for CY 2019 compared to CY 2018, to be approximately $240 million.
Request for Information
CMS requests comments on promoting interoperability and electronic health care information exchange through revisions to health and safety requirements, transparency of charge information and out-of-pocket costs for patients, and an Innovation Center demonstration where the Competitive Acquisition Program for Part B drugs could be used to reduce drug costs.