What is in store for 2019 OPPS? Proposed OPPS Reimbursement and Policy Update

On July 25, 2018, CMS released the Medicare program Calendar Year 2019 Outpatient Prospective Payment System (“OPPS”) and Ambulatory Surgical Center (“ASC”) proposed rule.  Published in the July 31, 2018 Federal Register, the proposed rule contains updates to the 2019 rates and quality provisions.

I. Medicare OPPS Payment Update

CMS proposes $74.9 million payments to providers in CY 19 OPPS, an increase of $4.9 million over CY 2018 anticipated payments.  Rates will increase by 1.25% which reflects a market basket increase of 2.8% along with the following adjustments:

  • Statutory adjustment mandated by the ACA of -0.75%

  • Multi-factor productivity adjustment of -0.8%

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 will remain at 1% of the total OPPS payments in CY 2019.  To ensure the outlier payments equal 1%, CMS is proposing to increase the fixed dollar threshold to $4,600 as compared to the CY 2017 threshold of $4,150. 
Cancer hospitals will continue to receive additional payments so that the payment-to-cost ratio for these hospitals are equal to the weighted average for other OPPS hospitals.  Both rural hospitals that qualify as Sole Community Hospitals or Essential Access Community Hospitals (“EACH”) will continue to receive the 7.1% adjustment to OPPS payments.

II.  Site Neutral Payments

CMS is proposing new regulations regarding the payment of services provided by off-campus provider-based departments.  As OPPS expenditures continue to rise due to the increase in volume and intensity of the outpatient services performed by hospitals, CMS is concerned that payment initiatives, rather than patient acuity or medical necessity, are affecting where services are provided. CMS believes many off-campus sites were previously private physician offices and would have been paid under the Physician Fee Schedule (“PFS”), causing the increased payments made by CMS. 

III.  Expansion of Off-Campus Provider-Based Departments

In CY 2019, CMS is proposing to limit payment to excepted provider-based off-campus departments who furnish new types of services that were not provided prior to the enactment of the Bipartisan Budget Act of 2015.  CMS has indicated it is concerned that hospitals may purchase additional physician practices to operate within the already established off-campus provider-based department in order to receive the higher OPPS payments.

If an excepted hospital provides a service that was not furnished or billed from November 1, 2014 through November 1, 2015, CMS is proposing to reimburse the hospital at a reduced rate.  CMS is attempting to eliminate payment differentials between physician clinics and provider-based departments. 

IV.  340B Changes

CMS is concerned the payment differences that occurred in CY 2018 for 340B acquired drugs furnished by excepted-hospital outpatient departments versus non-excepted departments may create a shift of 340B drug administration to the excepted off-campus provider-based departments.  In the CY 2019 proposed rule, CMS is extending the ASP minus 22.5% to 340B drugs provided in a non-excepted provider-based off-campus department. 

VInpatient Only Procedures (“IPO”)

For CY 2019, CMS is proposing to remove the following procedures from the IPO list:

  • CPT 31241 – Nasal/sinus endoscopy, surgical; with ligation of sphenopalatine artery.

  • CPT 01402 – Anesthesia for open or surgical arthroscopic procedures on knee joint; total knee arthroplasty.

CMS is also proposing to add the following procedure to the IPO list due to the nature of the procedure:

  • CPT C9606 – Percutaneous transluminal revascularization of acute total/subtotal occlusion during acute myocardial infarction, coronary artery or coronary artery or bypass graft, any combination of drug-eluting intracoronary stent atherectomy and angioplasty, including aspiration thrombectomy when performed, single vessel. 

VI. Hospital Outpatient Quality Reporting

CMS is proposing to remove one (1) measure in CY 2020 and nine (9) measures in CY 2021 to alleviate maintenance costs and administrative burdens to hospitals.  The measures are being removed for the following reasons: the costs associated with the measure outweigh the benefit; the measure does not align with current clinical guidelines or practices; the performance among hospitals is so high and unvarying that meaningful improvements can no longer be made; or the performance of the measure does not improve patient outcomes.

VII.  Comprehensive APC’s

CMS is proposing to add three (3) new comprehensive APC’s (“C-APC’s”) increasing the current list to sixty-five (65) C-APC’s as follows:

  • C-APC 5163, Level 2 ENT Procedures;

  • C-APC 5183, Level 3 Vascular Procedures; and

  • C-APC 5184, Level 4 Vascular Procedures

The procedures were selected because the APC’s include primary comprehensive services, such as a major surgical procedure that are typically reported with other ancillary and adjunctive services.

VIII.  Ambulatory Surgical Centers (“ASC”) Update

CMS is proposing to update the ASC payment system for CY 2019 through CY 2023 using the hospital market basket update instead of the Consumer Price Index for All Urban Consumers (“CPI-U”).  During this period, CMS intends to examine whether this payment change will lead to a migration of services from other settings to the ASC facility.  

CMS is also proposing to revise their definition of “surgery” in the ASC payment system to account for “surgery-like” procedures that are now currently assigned outside of the CPT surgical range as well as adding twelve (12) cardiac catherization procedures to the covered ASC procedure list.

Under the ASC Quality Reporting Program (“ASCQR”), CMS is proposing changes to policies in the payment determination in CY 2020, 2021 and subsequent years by removing one (1) factor, adding two (2) new measure removal factors and updating the regulations to better reflect their measure removal policies.  These proposals would align the ASCQR program measure removal factors with the Hospital OQR program.   

IX. Combating the Opioid Crisis 

ThePresident’s Commission on Combating Drug Addiction and the Opioid Crisisrecommends CMS review its payment policies for certain drugs that function as a supply, specifically non-opioid pain management treatments. Currently drugs that function as a supply in surgical procedures or diagnostic tests are paid under OPPS and ASC payment methodologies.  In CY 2019, CMS is proposing to pay the non-opioid pain management separately at Average Sale Price ("ASP")  plus 6%.  CMS is seeking comments and feedback as to whether the use of non-opioid alternatives have decreased the number of opioid prescriptions and therefore warrant a separate payment.      

CMS will issue the final rule on or about November 1, 2018. 

SunStone Consulting specializes in assisting the healthcare industry with revenue integrity, reimbursement and regulatory solutions.  For more information about the CY 2019 Proposed OPPS Rule or any questions regarding our solutions, please contact Vonda Moon, Principal atvondamoon@sunstoneconsulting.com.