CMS Finalizes Hospital Outpatient Prospective Payment System Changes to Better Support Hospitals and Physicians and Improve Patient Care

CMS NEWS

FOR IMMEDIATE RELEASE
November 1, 2016 

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CMS Finalizes Hospital Outpatient Prospective Payment System Changes to Better Support Hospitals and Physicians and Improve Patient Care

Today, the Centers for Medicare & Medicaid Services (CMS) finalized updated payment rates and policy changes in the Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System for calendar year (CY) 2017. These finalized policy changes will improve the quality of care Medicare patients receive by better supporting their physicians and other health care providers and reflect a broader Administration-wide strategy to create a health care system that results in better care, smarter spending, and healthier people.

CMS is also adding new quality measures to the Hospital Outpatient Quality Reporting Program and the Ambulatory Surgical Center Quality Reporting Program that are focused on improving patient outcomes and experience of care. CMS received approximately 3,000 public comments on the proposed rule, which were carefully considered for the final rule with comment period.

“We spoke to stakeholders across the outpatient community who care about the quality and value of care that Medicare patients receive,” said Sean Cavanaugh, Deputy Administrator and Director of the Center for Medicare at CMS. “The policies finalized in today’s rule will not only improve the value of care provided to Medicare beneficiaries, but are also responsive to health care providers who are crucial to outpatient care.”

CMS estimates that the updates in the final rule would increase OPPS payments by 1.7 percent and ASC rates by 1.9 percent in 2017.

Addressing Physicians’ Concerns Regarding Pain Management

Today’s final rule would address physicians’ and other health care providers’ concerns that patient survey questions about pain management in the Hospital Value-Based Purchasing program unduly influence prescribing practices. While there is no empirical evidence of such an effect, we are finalizing the removal of the pain management dimension of the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) Survey for purposes of the Hospital Value-Based Purchasing Program to eliminate any financial pressure clinicians may feel to overprescribe medications. CMS continues to believe that pain control is an appropriate part of routine patient care that hospitals should manage, and is an important concern for patients, their families, and their caregivers.  CMS is continuing the development and field testing of alternative questions related to provider communications and pain, and will solicit comment on these alternatives in future rulemaking.

Focusing Payments on Patients Rather than Setting

CMS is finalizing policies to implement section 603 of the Bipartisan Budget Act of 2015, which requires that certain items and services furnished by certain off-campus hospital outpatient departments will no longer be paid under the OPPS beginning January 1, 2017. Currently, Medicare pays for the same services at a higher rate if those services are provided in a hospital outpatient department rather than a physician’s office.This payment differential has provided an incentive for hospitals to acquire physician offices in order to receive the higher rates. This acquisition trend and difference in payment has been highlighted as a long-standing issue of concern by Congress, the Medicare Payment Advisory Commission, and the Department of Health and Human Services Office of Inspector General. This difference in payment also increases costs for the Medicare program and raises the cost-sharing liability for beneficiaries.

This final rule with comment period describes which off-campus hospital outpatient departments are subject to this requirement and which items and services are “excepted” from application of these payment changes and will continue to be paid under the OPPS. 

Comments and recommendations were received from hundreds of stakeholders, including hospitals and physician groups that helped to inform the final policies announced today. For example, based on feedback from stakeholders, the final rule with comment period finalized proposed limitations on relocation of excepted off-campus hospital outpatient departments, but makes a modification to allow flexibility to accommodate instances of extraordinary circumstances that are outside a hospital’s control, such as natural disasters. Further, in response to stakeholder feedback, CMS is not finalizing its proposed limitation on expansion of services at this time.  

Additionally, CMS is issuing an interim final rule with comment period (IFC) in conjunction with this final rule with comment period to establish new payment rates under the Medicare Physician Fee Schedule (MPFS) for the items and services provided by certain off-campus provider-based departments for CY 2017.  These payment rates are in lieu of finalizing a proposal, about which numerous commenters raised concerns, which would have precluded a hospital from directly billing Medicare at all for non-excepted items and services for 2017.

These new interim final rates being adopted in the IFC will permit hospitals to be paid for the furnishing of items and services that may no longer be paid under the OPPS, and we believe will reduce incentives for hospitals to acquire independent physician practices and convert the same service into more highly paid OPPS services.  We welcome comments on the policies in the interim final rule and will make adjustments as necessary to the payment mechanisms and rates through rulemaking that could be effective in CY 2017.

Improving Patient Care through Technology

CMS is supporting physicians and other providers through today’s rule by increasing flexibility for eligible professionals, eligible hospitals and critical access hospitals that participate in the Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs. On October 14, 2016 CMS released the final rule on the new Quality Payment Program for clinicians (CMS-5517-FC), which includes provisions establishing the Merit-Based Incentive Payment System (MIPS), a new program for certain Medicare-enrolled practitioners with a focus on: quality; improvement activities; cost; and use of certified EHR technology to support interoperability and advanced quality objectives. For more information, please visit: http://www.hhs.gov/about/news/2016/10/14/hhs-finalizes-streamlined-medicare-payment-system-rewards-clinicians-quality-patient-care.html.

Today, CMS is making changes under the Medicare EHR Incentive Program for eligible hospitals and critical access hospitals attesting to CMS, including hospitals that are eligible to participate in both the Medicare and Medicaid EHR Incentive Programs (dual-eligible hospitals), by eliminating the Clinical Decision Support (CDS) and Computerized Order Entry (CPOE) objectives and measures beginning in 2017. CMS is reducing a subset of thresholds for the remaining objectives and measures for Modified Stage 2 and Stage 3. Additional changes include allowing all returning participants in the EHR Incentive Programs to report on a 90-day EHR reporting period in 2016 and 2017. CMS is also finalizing an application process for a one-time significant hardship exception to the Medicare EHR Incentive Program for certain eligible professionals in 2017 who are also transitioning to MIPS. These additions both increase flexibility,  lower the reporting burden for providers, and focus on the exchange of health information and using technology to support patient care.

The OPPS /ASC Final Rule and IFC are available on the Federal Register at: https://www.federalregister.gov/public-inspection.

A fact sheet on this final rule and IFC is available at: https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-11-01-3.html.