Kusserow’s Corner: CMS Proposes Rule Changes for OPPS and ASCs

CMS has released a proposed rule for hospital outpatient prospective payment system (OPPS) and ambulatory surgical centers (ASCs) for calendar year 2015 that updates payment policies and rates, and streamlines programs in outpatient department and ASC settings. CMS is accepting comments on the proposed rule until September 2, 2014. CMS also issued a fact sheet related to quality changes.

CMS plans to replace the existing device-dependent Ambulatory Payment Classifications (APCs) and make a single payment for all related or adjunctive hospital services provided to a patient in the furnishing of certain device dependent services, with certain exceptions. The comprehensive APC payment would include:

  • All outpatient services, including diagnostic procedures, laboratory tests and other diagnostic tests, and treatments that assist in the delivery of the primary procedure; visits and evaluations performed in association with the procedure;
  • Services and supplies used during the service; outpatient department services delivered by therapists as part of the comprehensive service; durable medical equipment (DME), as well as prosthetic and orthotic items and supplies when provided as part of the outpatient service; and
  • Any other outpatient components reported by Healthcare Common Procedure Coding System (HCPCS) codes that are provided during the comprehensive service.

CMS proposes establishing 28 comprehensive-APCs for 2015 versus the 29 comprehensive under the 2014 rule.

The OPPS rates would increase by 2.1 percent compared to 2014 levels, although rate changes for individual APCs vary. This update reflects a 2.7 percent market basket increase, which is partially offset by a 0.4 percent multifactor productivity (MFP) adjustment and an additional 0.2 percent reduction, both of which were mandated by the Affordable Care Act. Overall, CMS expects to make $800 million in additional payments for OPPS services furnished under the rule. The threshold for separate payment for outpatient drugs in 2015 would be a cost per day that exceeds $90, the same threshold as in 2014.

CMS proposes collecting data on services furnished in off-campus provider-based departments beginning in 2015 with hospitals and physicians reporting a modifier for services furnished in an off-campus provider-based department on both hospital and physician claims. This information ultimately is intended to be used to improve the accuracy of Medicare physician fee schedule (MPFS) practice expense payments for services furnished in off-campus provider-based departments.

CMS is also proposing revising the expansion exception process for physician-owned hospitals under the rural provider and hospital ownership exceptions to the physician self-referral law by permitting physician-owned hospitals to use additional data sources to demonstrate eligibility for an expansion exception as a “high Medicaid facility.” CMS further proposes requiring a physician certification only for long-stay cases (defined as 20 days or more) and outlier cases. An admission order would continue to be required for all admissions.

Other key highlights include:

  • Proposing a process for overpayment recovery and appeals for Medicare Parts C and D;
  • Proposing an appeal process for Medicare Advantage (MA) organizations and Part D sponsors to seek review of CMS’ determinations on payment data;
  • Revising the physician certification requirements so that certification for inpatient admission is required only for long term stays (20 days or more) or outlier cases; and
  • Requiring a HCPCS code modifier for physicians’ services and outpatient hospital services provided in an off-campus provider-based department of a hospital.

Proposed Outpatient Quality Reporting (OQR) Program changes include:

  • Removing three current measures (one cardiac care and two prophylactic antibiotic surgery measures);
  • Adding one claims-based measure for payment determination (Facility Seven-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy);
  • Transitioning one chart-abstracted measure from required to voluntary reporting; and
  • Modifying the hospital OQR program validation process.

Hospitals that fail to meet the OQR Program reporting requirements are subject to an additional reduction of 2.0% from what is being proposed overall

Proposed Ambulatory Surgical Center Quality Reporting (ASCQR) Program changes include:

  • Adding one outcome measure (Facility Seven-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy); and
  • Transition one outcome measure (Cataracts-Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery) to voluntary reporting for both the Hospital OQR and ASCQR Programs.

CMS proposes an ASC prospective payment system update of 1.2 percent, reflecting a CPI-U update of 1.7 percent, offset by a 0.5 percent MFP adjustment. Payment updates for individual procedures vary. ASCs that do not meet quality reporting requirements are subject to a 2% payment reduction. CMS proposes adding 10 procedures to the ASC list of covered surgical procedures and refining the ASC quality program.

One final note: CMS proposes establishing a process to recover overpayments that result from the submission of erroneous payment data by an MA organization or Part D prescription drug plan sponsor if the plan fails to correct the data upon CMS request, with an appeals process for MA organizations and Part D sponsors.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2014 Strategic Management Services, LLC. Published with permission.