CMS Releases OPPS Final Rule; Reduces Payments for Clinic Visits

November 5, 2018

CMS released the 2019 OPPS Final Rule (the “2019 Final Rule”) on November 2, scheduled to be published November 21, 2018. The unpublished 2019 Final Rule can be found here. The 2019 Final Rule provides updates to the Outpatient Prospective Payment System (the “OPPS”), including updates to the conversion factor, wage index, the Inpatient Only list, the list of ASC covered surgical procedures, and other technical payment policies.

Notably, as we have highlighted over the past couple of years, CMS continues to review and scrutinize the procedures paid under the OPPS which could be paid under other payment systems if provided in a different care setting (e.g., CMS continues to focus on site-neutral payment policies).

1. Off-Campus Provider-Based EDs. For example, beginning January 1, 2019, off-campus provider-based emergency departments must attach a HCPCS modifier (ER – Items and services furnished by a provider-based off-campus emergency department) to every claim line submitted. CMS is implementing this change to collect data to evaluate whether services are shifting to higher acuity and higher cost settings due to (i) higher payment rates and (ii) the exemption provided for emergency departments under section 603 of the Bipartisan Budget Act of 2015 (for further information on the exception for emergency departments at section 603 of the Bipartisan Budget Act of 2015, see our Client Alert here).

2. Reduction in Clinic Visit Payments. Along these same lines, CMS is finalizing its proposal (see 2019 OPPS Proposed Rule at 83 FR 37046) to reduce payments to excepted off-campus provider-based departments (see our previous Client Alert here for a discussion of excepted vs. non-excepted off-campus PBDs) for clinic office visits (HCPCS code G0463). Specifically, under the 2019 OPPS Final Rule, for the clinic visit service (HCPCS code G0463) provided at an excepted off-campus PBD, the excepted off-campus PBDs will receive an amount equal to the site-specific PFS payment rate for nonexcepted items and services furnished by a nonexcepted off-campus PBD for the clinic visit service. Such reduction will be phased in over two years by applying 50% of the total reduction in calendar year 2019. Practically speaking, these departments will be paid approximately 70% of the OPPS rate for the clinic visit service in calendar year 2019 (i.e., 100% of the OPPS rate minus the PFS-equivalent amount paid to nonexcepted off-campus PBDs, which is 40% of OPPS payment (thus, 60% less than the OPPS rate) for calendar year 2019).

3. Payments for Items and Services at Excepted Off-Campus PBDs. Significantly, CMS declined to adopt its proposal from the 2019 OPPS Proposed Rule (83 FR 37046) which proposed to limit the items and services that an excepted off-campus PBD could bill to only those items and services within the clinical families of services (defined by CMS) of which that the excepted off-campus PBD had provided and submitted a claim during the one-year period prior to enactment of Section 603 of the Bipartisan Budget Act. Therefore, an excepted off-campus PBD will continue to receive payments under the OPPS in calendar year 2019 for all billed items and services that are paid under the OPPS, regardless of whether it furnished such items and services prior to the date of enactment of Section 603, as long as the excepted off-campus PBD remains excepted. While CMS has declined to adopt this proposal, Providers with excepted off-campus PBDs should demonstrate caution in financial projections and operational policies, as CMS continues to evaluate how it can practically implement policies that will reduce these payments and restrict a provider’s ability to expand the items and services provided at excepted off-campus PBDs.

Additional Information

If you have any questions regarding the 2019 OPPS Final Rule, please contact the attorney listed in the right-hand column of this page.