What's in store for 2018 OPPS? Proposed OPPS Reimbursement and Policy Update

On July 13, 2017, CMS released the Medicare program Calendar Year 2018 Outpatient Prospective Payment System (“OPPS”) and Ambulatory Surgical Center (“ASC”) proposed rule. Published in the July 20, 2017 Federal Register, the proposed rule contains updates to the 2018 rates and quality provisions with CMS committed to continuing to transform the healthcare delivery system by focusing on patient-centered care and promoting flexibility in healthcare.

I. Medicare OPPS Payment Update

CMS is proposing a net increase in OPPS payments of 1.75%, which reflects a market basket increase of 2.9% along with the following adjustments:

  • Statutory adjustment mandated by the ACA of -0.75%
  • Multi-factor productivity adjustment of -0.4%

CMS will continue to apply the 2.0% payment reduction to hospitals who fail to meet the outpatient quality reporting requirements.

Proposed estimated outlier payments would remain at 1% of the total OPPS payments in CY 2018. To ensure the outlier payments equal 1%, CMS is proposing to increase the fixed dollar threshold to $4,325 as compared to the CY 2017 threshold of $3,825. 

Cancer hospitals will continue to receive additional payments so that the payment-to-cost ratio for these hospitals is equal to the weighted average for other OPPS hospitals. Certain rural sole community and essential access community hospitals will continue to receive a 7.1% adjustment to OPPS payments.

II. 340B Drug Pricing

CMS is proposing to alter the current method of payment for Medicare Part B drug services provided by 340B hospitals, allowing the Medicare program and its beneficiaries to share in some of the savings realized by hospitals who participate in the 340B program. CMS proposes to pay hospitals for separately payable, non pass-through drugs (other than vaccines) purchased through the 340B drug pricing program at the average sales price ("ASP") minus 22.5%, rather than the current structure of ASP plus 6%.  These drugs purchased through the 340B program will be identified on the patient claim using a modifier, with CMS “seeking comments on implementing this proposal in a manner that will bring down out-of-pocket costs for Medicare patients and allows providers to best meet their patients’ needs.”

III. Supervision of Hospital Outpatient Therapeutic Services

CMS would like to reinstate the moratorium on the enforcement of the direct supervision requirement for outpatient therapeutic services provided by critical access hospitals and small rural hospitals with less than 100 beds for both CY 2018 and 2019.

IV. Packaged Skin Substitutes

Current payment for skin substitutes, which are products used to aid in wound healing, is packaged into the primary OPPS procedure with the products assigned to either a “high-cost group” or a “low-cost group” relative to certain cost thresholds. CMS is proposing to assign skin substitutes with a geometric mean unit cost (“MUC”) or a per day cost (“PDC”) that exceeds either the MUC threshold, or the PDC threshold to the high cost group.  CMS is also proposing to grandfather in skin substitute products that were assigned to the high-cost group in CY 2017 even if they do not meet the CY 2018 thresholds while they review this policy.

VInpatient Only Procedures (“IPO”)

Each year CMS determines if any procedures should be removed from the IPO list and for CY 2018, CMS is proposing to remove the following procedures from the inpatient only list:

  • CPT 27447 - Arthroplasty, knee, condyle and plateau; medical and lateral compartments with or without patella resurfacing (total knee arthroplasty);
  • CPT 55866 - Laparoscopy, surgical prostatectomy, retropubic radical, including nerve sparing, includes robotic assistance, when performed

VI. Hospital Outpatient Quality Reporting

CMS suggested removing six (6) measures in CY 2020 and CY 2021 to alleviate maintenance costs and administrative burdens to hospitals. The measures to be removed in CY 2020 are:

  • OP–21: Median Time to Pain Management for Long Bone Fracture
  • OP–26: Hospital Outpatient Volume Data on Selected Outpatient Surgical Procedures

In CY 2021, the measures to be removed include:

  • OP–1: Median Time to Fibrinolysis
  • OP–4: Aspirin at Arrival
  • OP–4: Aspirin at Arrival
  • OP–20: Door to Diagnostic Evaluation by a Qualified Medical Professional
  • OP–25: Safe Surgery Checklist

VII. Laboratory Date of Service Policy

CMS is considering modifications to the laboratory date of service (“DOS”) policy. In the Federal Register, dated November 23, 2001, CMS adopted a policy under which the DOS for clinical lab services generally is the date the specimen was collected. However, under current policy if a lab test is ordered less than two (2) weeks after a patient’s discharge date, the hospital must bill Medicare for the test and then reimburse the lab that performed the test. CMS’s proposed modifications would allow labs to directly bill Medicare for molecular pathology tests and advanced diagnostic lab tests excluded from the OPPS packaging policy and ordered less than two (2) weeks following the patients date of discharge.

VIII. Payment Packaging

For CY 2018, CMS is proposing to remove the exception for certain administration services and conditionally package payment for low-cost drug administration services. While they are not proposing to package drug administration add-on codes for CY 2018, they are soliciting comments on this policy. CMS is also actively seeking comments on existing packaging policies under OPPS, including drugs that may function as a supply in either a diagnostic test or procedure or surgical procedures. 

IX. ASC Quality Reporting Program

CMS is proposing to adopt measures and policies for CY 2019, CY 2021 and CY 2022 ASC Quality Reporting Program. In CY 2019, CMS proposes to remove three (3) measures:

  • ASC–5: Prophylactic Intravenous (IV) Antibiotic Timing
  • ASC–6: Safe Surgery Checklist Use
  • ASC–7: Ambulatory Surgical Center Facility Volume Data on Selected Ambulatory Surgical Center Surgical Procedures

CMS also plans to delay the OAS CAHPS survey measures (ASC-15a-e) beginning with the CY 2020 payment determination. Starting with CY 2018, CMS proposes to:

  • Expand the CMS online tool to also allow for batch submission of measure data and make corresponding changes to the CFR; and
  • Align the naming of the Extraordinary Circumstances Exceptions (“ECE”) policy with that used in their other quality reporting and value-based payment programs and make corresponding changes to the CFR.

Finally, CMS proposes to adopt one (1) new measure in CY 2021, ASC–16: Toxic Anterior Segment Syndrome and two (2) new measures in CY 2022, collected by claims, ASC–17: Hospital Visits after Orthopedic Ambulatory Surgical Center Procedures and ASC–18: Hospital Visits after Urology Ambulatory Surgical Center Procedures.

X. Changes in Payment for Radiology Film

The policy to reduce reimbursement for film X-rays was adopted last year, as well as the addition of modifier “FX” to identify the services. For 2018, CMS would now require hospitals to use a modifier to identify services for X-rays taken using Computed Radiography Technology (“CAT”), modifier “XX”. CAT is defined as “cassette based imaging which utilizes an imaging plate to create an image.” CMS is also proposing to reduce the OPPS payment for the technical component of an X-ray taken using CAT with a reduction of 7% occurring from 2018 through 2022 and a 10% reduction applied beginning in 2023. 

CMS will accept comments on the proposed rule until September 11, 2017 and will issue the final rule on or about November 1, 2017. 

SunStone Consulting specializes in assisting the healthcare industry with revenue integrity, reimbursement and regulatory solutions. For more information about the CY 2018 Proposed OPPS Rule or any questions regarding our solutions, please contact Vonda Moon, Principal at vondamoon@sunstoneconsulting.com or Jim O’Connell, Principal, at jimoconnell@sunstoneconsulting.com.