CMS releases final rule for CY 2017 OPPS/ASC payment systems

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On Nov. 1, the Centers for Medicare & Medicaid Services (CMS) released the calendar year 2017 outpatient prospective payment system/ambulatory surgical center (OPPS/ASC) final rule.

In addition to standard updates to the OPPS and ASC payment systems, the rule implements the site-neutral provisions of Section 603 of the Bipartisan Budget Act of 2015, among other changes. Under the rule, CMS established the site-neutral payment rates for certain off-campus provider-based hospital outpatient departments (HOPDs).

On a positive note, CMS has provided some reprieve to the site neutral payments. But overall, there is still work to be done. Here is an initial assessment:

  • CMS recognized the policy to provide no payment to new off-campus hospital clinics for patients was unsound and it looks like payment rates will generally be 50 percent of the OPPS rate for 2017 and 2018. However, predicted changes in 2019 will be lower than 50 percent.
  • CMS confirmed that the relocation of an existing hospital outpatient department will result in the HOPD losing its grandfathered status and therefore be paid at the new rate, except in extraordinary circumstances. This is a very narrow exception – like a natural disaster.
  • CMS also finalized the policy regarding an HOPD that has a change of ownership and confirmed that they will not apply reduced payment to grandfathered HOPDs that expand services.

Next steps

The final rule brought a mixed bag for community hospitals. The biggest disappointment is the provisions about relocation and rebuilding. Facilities must be modernized to remain current and utilize efficiencies. In this scenario, CMS provided no flexibility. In addition, CMS provide no flexibility in change of ownership, which is a foreseeable problem in the future.

Our community hospitals require resolution to the relocation and rebuild provisions within the Final Rule. With Congress returning in the next few weeks, we will continue to press for legislative changes in this area.

SDAHO appreciates the modifications CMS made to its proposal to allow existing off-campus provider-based HOPDs to expand their services to meet the changing needs of their patients and communities without being penalized. However, the association is alarmed that by penalizing hospitals that need to relocate their HOPDs, CMS continues to ignore the need for hospitals to modernize existing facilities so that they can provide the most up-to-date, high-quality services to their patients in locations that meet patients’ needs.