Health Reform WK-EDGE CMS proposes 1.25 percent increase in OPPS payments for 2019
Tuesday, August 7, 2018

CMS proposes 1.25 percent increase in OPPS payments for 2019

By Sheila Lynch-Afryl, J.D., M.A.

Reimbursement to hospitals for outpatient services would increase by 1.25 percent in 2019, while ambulatory surgical centers (ASCs) would see a 2 percent increase, according to an advance release of the hospital outpatient prospective payment (OPPS) and ASC PPS Proposed rule for calendar year (CY) 2019. The Proposed rule would also implement a site-neutral payment policy for clinic visits, which, according to CMS, are the most common service billed under the OPPS (Proposed rule, 83 FR 37046, July 31, 2018).

Annual OPPS update. The proposed increase factor of 1.25 percent is based on the proposed hospital inpatient market basket percentage increase of 2.8 percent for inpatient services paid under the hospital inpatient prospective payment system (IPPS), minus the proposed multifactor productivity (MFP) adjustment of 0.8 percentage point, and minus a 0.75 percentage point adjustment required by sec. 3401(i) of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). CMS estimates that total payments to OPPS providers for CY 2019 will be approximately $74.6 billion, an increase of approximately $4.9 billion compared to estimated CY 2018 OPPS payments.

Off-campus provider-based departments. CMS proposed, pursuant to its authority under Soc. Sec. Act §1833(t)(2)(F), to apply an amount equal to the site-specific physician fee schedule payment rate for nonexcepted items and services furnished by a nonexcepted off-campus provider-based department (PBD) for the clinic visit service (HCPCS code G0463) when provided at an off-campus PBD excepted from Soc. Sec. Act §1833(t)(21). This change, said CMS, would save beneficiaries an average of $14 per visit in 2019.

The proposed rule would also amend 42 C.F.R. §419.48 to provide, beginning in CY 2019, that if an excepted off-campus PBD furnishes a service from a clinical family of services for which it did not previously furnish a service (and subsequently bill under the OPPS for that item or service) during a baseline period from November 1, 2014 through November 1, 2015, services from this new clinical family of services would not be covered outpatient department service. Services in the new clinical family of services would instead be paid under the physician fee schedule.

340B program. In the CY 2018 OPPS final rule CMS made a controversial change to its reimbursement for separately payable drugs and biologics acquired through the 340B Program from average sales price (ASP) plus 6 percent to ASP minus 22.5 percent (see CMS cut to 340B spending overshadows OPPS update; associations threaten suit, November 13, 2017). For CY 2019, CMS proposed to also pay ASP minus 22.5 percent for 340B-acquired drugs furnished by nonexcepted, off-campus PBDs. In addition, nonpass-through biosimilars acquired under the 340B program would be paid at ASP minus 22.5 percent of the biosimilar’s own ASP rather than ASP minus 22.5 percent of the reference product’s ASP.

Payment for drugs if ASP data is not available. During an initial sales period in which data on the prices for sales for a drug or biologic are not sufficiently available from the manufacturer, Soc. Sec. Act §1847A(c)(4) permits the Secretary to make payments that are based on wholesale acquisition cost (WAC). For CY 2019, CMS proposed to pay separately payable drugs and biologic products that do not have pass-through payment status and are not acquired under the 340B Program at WAC plus 3 percent instead of WAC plus 6 percent. If WAC data is not available for a drug or biologic product, CMS proposed to continue to pay separately payable drugs and biological products at 95 percent of the average wholesale price.

ASC PPS. The proposed rule would amend 42 C.F.R. §416.171(a)(2) to require that the ASC payment system be updated for CYs 2019 through 2023 using the hospital market basket update instead of the Consumer Price Index for All Urban Consumers (CPI-U). A proposed hospital market basket percentage increase of 2.8 percent minus a 0.8 percent MFP adjustment (see ACA sec. 3401(k)) yields a proposed payment increase of 2.0 percent in CY 2019. Estimated total payments to ASCs for CY 2019 would be approximately $4.89 billion under the proposed rule, an increase of about $300 million compared to estimated CY 2018 Medicare payments to ASCs.

Covered ASC procedures. CMS proposed to revise the definition of "surgery" to account for certain "surgery-like" procedures that are assigned codes outside the Current Procedural Terminology (CPT®) surgical range. CMS also proposed to add 12 cardiac catheterization procedures to the ASC covered procedures list.

Payment for non-opioid pain management therapy. For CY 2019, in response to the recommendation from the President’s Commission on Combating Drug Addiction and the Opioid Crisis, CMS proposed to amend 42 C.F.R. §416.164 to: (1) change the packaging policy for certain drugs when administered in the ASC setting; and (2) provide separate payment for non-opioid pain management drugs that function as a supply when used in a surgical procedure when the procedure is performed in an ASC. CMS is also seeking comment on whether this proposed policy would decrease the dose, duration, or number of opioid prescriptions beneficiaries receive during and following an outpatient visit or procedure.

Quality reporting. To align the Hospital Outpatient Quality Reporting (OQR) and the ASC Quality Reporting (ASCQR) Programs, CMS proposed to update the factors used to remove quality measures for both programs. The proposed rule would also: (1) remove one measure from the OQR program beginning with the CY 2020 payment determination and nine beginning with the CY 2021 payment determination; and (2) remove one measure from the ASCQR program beginning with the CY 2020 payment determination and seven beginning with the CY 2021 payment determination.

Requests for information. CMS is seeking information on: (1) promoting interoperability and electronic health care information exchange through possible revisions to the CMS patient health and safety requirements for hospitals and other Medicare-participating and Medicaid-participating providers and suppliers; (2) improving beneficiary access to provider and supplier charge information; and (3) leveraging the authority for the Competitive Acquisition Program for Part B drugs and biologics for a potential CMS Innovation Center model.

Other provisions. The Proposed rule contains a number of other changes:

  • to continue the 7.1 percent adjustment to OPPS payments for certain rural SCHs, including essential access community hospitals;
  • to create three new comprehensive APCs (C-APCs) for CY 2019: C-APC 5163 (Level 3 ENT Procedures), C-APC 5183 (Level 3 Vascular Procedures), and C-APC 5184 (Level 4 Vascular Procedures);
  • to remove two procedures (CPT® codes 01402 and 31241) from the inpatient only list and add one procedure (HCPCS code C9606) to the list for CY 2019;
  • to modify the device-intensive criteria to allow procedures that involve single-use devices, regardless of whether they remain in the body after the conclusion of the procedure, to qualify as device-intensive procedures;
  • to apply a different payment methodology, using up to four years of claim data, for services assigned to new technology APCs with fewer than 100 claims per year; and
  • to continue to provide additional payments to cancer hospitals so that the cancer hospital’s payment-to-cost ratio (PCR) after the additional payments is equal to the weighted average PCR for the other OPPS hospitals using the most recently submitted or settled cost report data.

FederalRegisterIssuances: ProposedRules AgencyNews 340BNews CostSharingNews DrugNews MedicarePartBNews OutpatientFacilityNews PhysicianNews QualityNews

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