Industry News

CMS Publishes OPPS and ASC Payment System Final Rule

Strategic Management Services, LLC | December 2018

The Centers for Medicare & Medicaid Services (CMS) published the Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) payment system final rule (Final Rule) with comment period for calendar year (CY) 2019 on November 21, 2018.  The rule finalizes changes to the amounts and factors that CMS uses to determine payment rates for Medicare services furnished in hospital outpatient departments and ASCs.   Additionally, the Final Rule provides some OPPS and ASC payment system policy changes and updates requirements for the Hospital Outpatient Quality Reporting (OQR) Program and the ASC Quality Reporting (ASCQR) Program.  Due to time sensitivity, CMS also included updates to the list of reportable measures under the Hospital Inpatient Quality Reporting (IQR) Program in this Final Rule.  With this Final Rule, CMS attempts to establish greater price transparency and provide burden reductions to work towards the creation of a patient-centered health care system.  CMS is accepting comments on specified provisions in the Final Rule until January 2, 2019.

Key provisions of the Final Rule include:

OPPS payment rate updates

• CMS is updating OPPS payment rates by an outpatient department (OPD) fee schedule increase factor of 1.35 percent in the Final Rule. CMS estimates that the total OPPS provider payments for CY 2019 will be approximately $74.1 billion.  This is an increase of approximately $5.8 billion from the CY 2018 OPPS payments.
• CMS will also continue to implement the 2.0 percentage point reduction for hospitals that fail to meet the hospital OQR Program requirements by applying a reporting factor of 0.98 to the OPPS payments and copayments to all applicable services.

ASC payment rate updates

• CMS is updating ASC payment rates by using the hospital market basket rather than the CPI-U, for CYs 2019 to CY 2023. Using this methodology, CMS is updating ASC rates for CY 2019 by 2.1 percent.  CMS estimates that the total ASC provider payments for CY 2019 will be approximately $4.85 billion.  This is an increase of approximately $200 million from the CY 2018 ASC payments.

Site-neutral payments to control for unnecessary volume increases in certain covered outpatient services

• CMS is capping payments for clinic visit services that are provided at certain off-campus provider-based departments (PBD) paid under the OPPS. The cap aims to control the volume of unnecessary increases in certain services driven by the payment differential between the OPPS and Physician Fee Schedule (PFS). The agency will apply a PFS-equivalent payment rate for non-excepted items and services furnished by non-excepted off-campus PBDs for clinic visit services described by HCPCS code G0463.
• CMS will phase in the reduction in payment for this code over a two-year period beginning in CY 2019. CMS plans to phase in this policy for all off-campus PBDs excepted from Section 603 of the Bipartisan Budget Act of 2015 (excepted PBDs) that were paid at the OPPS rate in 2018 by paying 70 percent of the OPPS rate in 2019 and reducing payment to 40 percent of the OPPS rate for 2020 and future years.

Changes to the ASC Covered Procedures List (CPL)

• The Final Rule revises the ASC payment system definition of “surgery” to account for “surgery-like” procedures that are assigned to codes outside of the Current Procedural Terminology (CPT) surgical range.
• CMS is adding 12 cardiac catheterization procedures and 5 related procedures to the ASC CPL.

Changes to the Inpatient Only (IPO) Procedures List

• CMS removed two codes from the IPO list for CY 2019, CPT code 31241 and CPT code 01402, and added one procedure, HCPCS code C9606, to the IPO List.

Payment Policy for Biosimilar Biological Products without Pass-Through Status that are Acquired under the 340B Program

• CMS finalized payment for non-pass-through biosimilars acquired under the 340B program at Average Sales Price (ASP) minus 22.5 percent of the biosimilar’s own ASP, rather than the reference product’s ASP.

Payment of Drugs, Biologicals, and Radiopharmaceuticals if ASP Data Are Not Available

• CMS finalized payment for separately payable drugs and biologicals that do not have pass-through payment status and are not acquired under the 340B program at wholesale acquisition cost (WAC) of 3 percent if ASP data are not available.  If WAC data is not available, separately payable drugs and biologicals will continue to be paid at 95 percent of the average wholesale price (AWP).

Packaged Skin Substitutes 

• CMS is continuing the CY 2018 policy of assigning skin substitutes to high cost or low cost groups.
• The Final Rule also solicits comments on CMS’s ideas for OPPS payment revisions for skin substitute products.

Comprehensive Ambulatory Payment Classifications (C-APCs)

• CMS finalized three new C-APCs in the Final Rule, which include level 3 ears, nose, and throat (ENT) procedures (C-APC 5163), level 3 vascular procedures (C-APC 5183), and level 4 vascular procedures (C-APC 5184).

Low-Volume Services New Technology APC Payment

• CMS will use a “smoothing methodology” for more stable payment of services assigned to New Technology APCs with fewer than 100 annual claims, applicable for CY 2019 and future years. Based on the new methodology, CMS will establish appropriate payment for each low-volume service in order to assign the services to a New Technology APC, and eventually, to a clinical APC.
• CMS is also excluding services assigned to New Technology APCs from bundling into Comprehensive-APC procedures.

Device Intensive Procedure Policy

• Device costs associated with a procedure must meet a certain threshold above the total cost of the procedure, among other criteria, to qualify as a device-intensive procedure. The Final Rule lowers that threshold from 40 percent to 30 percent, allowing relatively high-cost devices to be better recognized in the OPPS and ASC payment systems.
• The Final Rule also modifies the device-intensive procedure criteria to cover procedures involving single-use devices, regardless of whether or not the device remains in the body after the procedure.

Device Pass-through Applications

• CMS is approving the remedē® System Transvenous Neurostimulator application for pass-through payment status in CY 2019.

Extension of the 340B Drug Payment Policy

• CMS is paying the ASP less 22.5 percent under the PFS for 340B-acquired drugs provided by non-excepted off-campus PBDs for CY 2019, consistent with the payment methodology CMS adopted in the CY 2018 Final Rule. The CY 2018 Final Rule adjusted the payment amount for separately payable, non-pass-through drugs and biologics that outpatient departments acquire through the 340B program, including excepted hospital off-campus PBDs.

Hospital OQR Program updates

• CMS is making changes to align the Hospital OQR Program measure removal factors with those in the ASCQR Program including:
  • Codification of three previously established policies:
    • The retention of measures from a previous year’s Hospital OQR Program measure set for subsequent years’ measure sets by updating 42 CFR 419.46(h)(1);
    • Use of the regular rulemaking process to remove a measure for circumstances that do not raise specific patient safety concerns by updating 42 CFR 419.46(h)(3); and
    • Immediate removal of measures that result in patient safety concerns by updating 42 CFR 419.46(h)(2).
  • Updates to measure removal Factor 7, addition of a new removal Factor 8, and codification of CMS’s measure removal policies and factors.
  • Clarification of CMS criteria for “topped-out” measures.
• CMS will release the Hospital OQR Program Specifications Manual every 12 months, starting with CY 2019.
• For the CY 2020 payment determination and later years, CMS will:
  • Remove the Notice of Participation (NOP) form;
  • Extend the reporting period from one year to three years for the OP-32: Facility Seven-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy measure; and
  • Remove the OP-27: Influenza Vaccination Coverage Among Healthcare Personnel Measure.
• For the CY 2021 payment determination and later years, CMS will remove the following seven measures:
  • OP-5: Median Time to ECG;
  • OP-9:Mammography Follow-up Rates;
  • OP-11: Thorax CT Use of Contrast Material;
  • OP-12:The Ability for Providers with HIT to Receive Laboratory Data Electronically Directly into Their Qualified/Certified EHR System as Discrete Searchable Data;
  • OP-14: Simultaneous Use of Brain Computed Tomography (CT) and Sinus CT;
  • OP-17: Tracking Clinical Results between Visits; and
  • OP-30: Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps – Avoidance of Inappropriate Use.

ASCQR Program updates

• CMS is aligning the ASCQR Program measure removal factors with those in the Hospital OQR Program by:
  • Removing one measure removal factor;
  • Adding two new measure removal factors; and
  • Updating the regulations to adequately reflect CMS measure removal policies.
• For the CY 2020 payment determination and later years, CMS will:
  • Remove the ASC-8: Influenza Vaccination Coverage Among Healthcare Personnel measure; and
  • Grant a reporting period extension from one year to three years for the ASC-12: Facility Seven-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy.
• For the CY 2021 payment determination and later years, CMS will remove the ASC-10: Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps – Avoidance of Inappropriate Use measure.
• CMS also gave notice that it is not finalizing the proposals to remove the ASC-9: Endoscopy/Polyp Surveillance Follow-up Interval for Normal Colonoscopy in Average Risk Patients (National Quality Forum (NQF) #0658); and ASC-11: Cataracts – Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery (NQF #1536) measures,

Payment for Non-Opioid Pain Management Therapy

• CMS will provide separate payments for non-opioid pain management drugs that function as a supply when used in a surgical procedure performed in an ASC.  This is in response to the President’s Commission on Combating Drug Addiction and the Opioid Crisis’s recommendation.

Hospital Inpatient Quality reporting (IQR) Program Updates

• CMS is removing the Communication About Pain questions from the Survey for the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) for the Hospital IQR Program, effective with October 2019 discharges for the FY 2021 payment determination and subsequent years; and
• CMS will not publicly report any data collected regarding the Communication About Pain Questions.

The Final Rule is available at:

https://www.gpo.gov/fdsys/pkg/FR-2018-11-21/pdf/2018-24243.pdf