House passes bill to raise some off-campus hospital outpatient department rates

Some off-campus hospital outpatient departments (HOPDs) could be grandfathered into receiving outpatient payment rates under a piece of legislation passed by the House. The legislation—known as “The Helping Hospitals Improve Patient Care Act” (HHIPCA) (H.R. 5273)—would provide an exception to new off-campus HOPD payment rules for off-campus facilities that were “mid-build” when the Bipartisan Budget Act of 2015 (BBA) (P.L.114-74) was enacted. According to the Congressional Budget Office (CBO), the legislation, which also seeks to modify other Medicare payment rules, would increase direct spending by $50 million over the 2017 to 2021 period and decrease direct spending by $14 million over the 2017 to 2026 period.

HOPDs

The BBA’s HOPD payment rules require that Medicare pay for services furnished in new off-campus facilities as though those they were performed in an office or ambulatory surgical center. The new legislation would exempt mid-build HOPDs—facilities that were under construction on November 2, 2015—from the BBA rule and allow them to continue to receive outpatient rates at those facilities (see Lawmakers lend hospitals helping hand to improve patient care, Health Law Daily, May 19, 2016). The CBO estimates that the payment exception for mid-build HOPDs would be the most costly part of the legislation, increasing net Medicare spending by $750 million over the 2017-2026 period. The bill would also cut direct spending by $750 million over that same period by reducing the inpatient prospective payment system (IPPS) payment rate by 0.04 percent in fiscal year (FY) 2018.

Cancer hospitals

The legislation would also provide an exemption to the HOPD payment rules for cancer hospitals. Under the proposed law, cancer hospitals at new off-campus locations would continue to be paid at cancer hospital rates. The law would implement an attestation requirement for cancer hospitals seeking the higher payment rates and give HHS $2 million to audit those attestations. Overall, the CBO estimates, the cancer hospital provisions of the HHIPCA would increase direct spending by $20 million over the 2017 to 2021 period but have no net budgetary effect over the 2017 to 2026.

EHRs

The law would also exempt eligible professionals based in ambulatory surgical centers (ASCs) from punishment under the electronic health record (EHR) meaningful use program. The exemption from compliance with EHR standards would apply to payments made in calendar years 2017 and 2018 and continue with the Merit-Based Incentive Payment System (MIPS) beginning in 2019. The CBO estimates that the exemption would exempt approximately 2000 ASC-based professionals from penalties related to EHR use—penalties that the CBO expects to average about $3000 per professional. The CBO estimates that the EHR provision would increase direct spending by $17 million over the 2017 to 2026 period.