Summary: 2017 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System updates and policy changes

News | Published: Monday, November 7, 2016 4:30 am

by MedAxiom


Last week, CMS released the Calendar Year (CY) 2017 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System updates and policy changes that go into effect January 1, 2017. We have prepared the below summary of the key policy changes to help keep you informed. Please let us know if you have any questions related to this important news. Want the detailed spreadsheet? Become a member! Contact your regional representative here. 

Hospital Outpatient Prospective Payment System (OPPS)

Overall Payments
  • Final payment rates will increase an average of 1.65% compared to 2016
Site Neutral Payments (Section 603)
  • CMS is implementing Section 603 of the Bipartisan Budget Act of 2015, which stipulates that certain items and services furnished by off-campus provider-based departments (PBDs) will not be paid under OPPS, but instead will be paid under the Medicare Physician Fee Schedule (MPFS)
  • This policy will go into effect January 1, 2017, despite many comments asking for delayed implementation
  • An off-campus PBD can qualify for Excepted Status, whereby they are still paid under OPPS.  To achieve excepted status, one of the following must apply:
    • Services are provided in a dedicated emergency department
    • Services are provided in a PBD that is “on-campus,” defined as within 250 yards of the hospital or a remote location of the hospital
    • The off-campus PBD billed for covered outpatient services furnished prior to November 2, 2015
  • For PBDs that meet any of these criteria, they will be paid under OPPS for any covered service as long as they maintain their excepted status
    • CMS had proposed limitations based on clinical families of services, but did not finalize this proposal based on public comments received; they will continue to monitor this issue
  • Services must continue to be provided in the same facility and physical address of the off-campus PBD as was used as of November 2, 2015
    • Relocation to a different location will jeopardize excepted status
    • CMS will make exceptions for extraordinary circumstances (e.g. natural disasters)
  • Excepted off-campus PBD status may be maintained if a change of ownership occurs if the ownership of the main provider is transferred and the existing Medicare provider agreement is accepted by the new owner
  • Payment for services provided in a non-excepted PBD will no longer be made under OPPS, and will be made under the MPFS
    • CMS is establishing interim final site-specific rates under the MPFS for the technical component of all non-excepted items and services
    • Hospitals will bill using a new claim line modifier “PN” to indicate that an item or service is a non-excepted item or service
    • The payment rate for these services will generally be 50% of the OPPS rate (with certain exceptions) 
    • CMS is seeking public comments on the new payment mechanisms and rates and, based on these comments, will adjust as necessary to the payment mechanisms and rates through rulemaking that could be effective in CY 2017
    • You will want to carefully evaluate whether you want to bill under OPPS vs. PFS.  Consider that billing under OPPS as a non-excepted PBD will still require double registration, facilities requirements, exposure to more regulations, more paperwork, impact on billing office visits as a PBD, etc.
Comprehensive APCs (C-APCs)
  • C-APCs represent a payment policy that packages payment for all procedures on a claim into one payment, as opposed to making separate payments for separate procedures
  • CMS is expanding this policy in creating 25 new C-APCs (62 C-APCs in total)
    • This will impact Cath Lab procedures that are now C-APCs; please see the attached table for the procedures that fall under this policy (indicated by “J1” Status Indicator)
Device Related Policy Changes
  • Hospital payment will continue to be reduced for certain APCs when a partial (>50%) or full device credit is provided – this is a continuation of existing policy
  • Device intensive procedures will be made at the HCPCS Code Level (i.e. C-Code) as opposed to the APC level – this will allow for more precise payment for these procedures
APC Pass-Through Status
  • Current technologies with Pass-Through Status
    • The CardioMEMS device (C2624) loses Pass-Through status effective January 1, 2017, and has been assigned to its own APC
    • Three other devices, including drug-coated balloons, retain their Pass-Through Status for 2017
  • New Applications (none received approval)
    • BioBag; Encore Suspension System; Endophys Pressure Sensing System
  • Effective January 1, 2017, CMS will sunset Pass-Through Status on a quarterly basis to allow for a full three years of data collection – this policy should provide incremental reimbursement to hospitals for a longer period of time for these technologies
Inpatient Only List
  • CMS removed 7 procedures from the inpatient list, none of them were cardiovascular related
Appropriate Use Criteria (AUC) for Advanced Diagnostic Imaging Services
  • CMS proposed to require practitioners to consult AUC at the time this imaging is ordered
  • However, AUC will not be implemented in 2017 – more information regarding AUC is provided in the final 2017 MPFS rule, which was published earlier this week (A summary of the MPFS rule, including policy changes related to AUC, will be provided by MedAxiom next week)
  • CMS continues to reconfigure payment for imaging services, reducing the number of imaging APCs from 17 in 2016, to 7
  • As a result, many echocardiography procedures will see payment increases compared to 2016 payment levels
Hospital Value-Based Purchasing (VBP) Program
  • The pain management dimension of the HCAHPS survey has been removed, beginning in 2018
Hospital Outpatient Quality Reporting (OQR) Program
  • CMS is adding 7 measures for the 2020 payment determination
    • Two claims based – OP 35 and OP 36
    • Five survey based – OAS CAHPS
  • No changes were made to the 2018 and 2019 measure sets
Organ Transplant
  • CMS finalized measures to restore the tolerance limit for patient and graft survival closer to the level allowed under the original 2007 rule by changing this threshold to 1.85
  • This change accounts for national outcomes improving over time for these programs, and will allow them a more reasonable margin to remain in compliance
Electronic Health Record (EHR) Incentive Program
  • Finalized a 90-day continuous EHR reporting period in 2016 and 2017 for all returning eligible professionals (Eps), eligible hospitals and CAHs that have previously demonstrated meaningful use in the Medicare and Medicaid EHR Incentive Programs
  • Elimination of the Clinical Decision Support (CDS) and Computerized Provider Order Entry (CPOE) objectives and measures for eligible hospitals and CAHs attesting under the Medicare EHR Incentive Program for Modified Stage 2 and Stage 3 for 2017 and subsequent years
  • Reducing a subset of thresholds for the remaining objectives and measures for Modified Stage 2 and Stage 3
  • Finalizing an application process for a one-time significant hardship exception to the Medicare EHR Incentive Program for certain eligible professionals in 2017 who are also transitioning to MIPS

Ambulatory Surgery Centers (ASC)

Overall Payments
  • Final payment rates will increase an average of 1.9% compared to 2016
ASC Quality Program
  • CMS is adding 7 measures for the 2020 payment determination, including ASC-13, ASC-14 and ASC-15(a-e)
  • No changes were made to the 2019 or 2020 measure sets


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