Provider-based billing moratorium concerns? CMS wants to hear them

Hospitals wondering about their off-campus provider-based departments will soon have some clarification on their ability to expand or relocate and how the departments that are under construction will be treated by CMS. The proposals for implementing the moratorium will soon be presented through the 2017 Outpatient Prospective Payment System (OPPS) Proposed rule expected to be published in July of this year, CMS announced.

Section 603

Congress amended the Medicare statute to provide special payment treatment for off-campus outpatient departments of hospitals the Bipartisan Budget Act of 2015 (P.L. 114-74) at section 603 (see Congress’s new provider-based provision—hospitals face significant changes and many unanswered questions, Health Law Daily, December 10, 2015). Per the new law, as of January 1, 2017, OPPS payments to hospitals will not be available for the vast majority of services furnished by “new” off-campus outpatient departments of a hospital. There are exceptions to this ban, including items and services furnished by dedicated emergency departments, as defined in 42 C.F.R. sec. 489.24(b), as well as off-campus departments of a hospital that were billing Medicare under the OPPS system prior to the date of the new law’s enactment, November 2, 2015, which are “grandfathered” under the new law.

Items or services furnished at off-campus locations failing to meet the requirements for OPPS reimbursement will be reimbursed in accordance with the otherwise applicable payment systems as long as the requirements for reimbursement under those systems are met. The statute states that each hospital will be required to provide CMS with such information as the Secretary deems necessary to implement the new provision. There will be no administrative or judicial review of: (1) the determination of the particular items or services subject to the new rule; (2) the payment systems that will be applied in the absence of OPPS; and (3) the “determination of whether a department of a provider” satisfies the definition of off-campus outpatient department of provider in the statute.


Facilities affected by this Proposed rule may submit comments and questions prior to the release of the Proposed rule to CMS at Although CMS cannot provide guidance prior to the release of the Proposed rule, it invited interested parties to submit scenarios and areas of concern. Following the issuance of the Proposed rule, there will also be the standard notice and comment period as part of the rule-making process prior to the issuing of the Final rule.

Bipartisan group asks CMS for data on seniors’ mental health conditions

Although CMS’ performance releasing Medicare data in many areas has been “commendable,” very little information is available about the mental and behavioral health conditions of seniors. House Ways and Means Committee Chairman Kevin Brady (R-Texas), Ranking Member Sander Levin (D-Mich), Health Subcommittee Chairman Pat Tiberi (R-Ohio), and Health Subcommittee Ranking Member Jim McDermott (D-Wash) sent a letter to CMS Acting Administrator Andy Slavitt, asking the agency to collect, analyze, and publish additional data on Medicare beneficiaries’ mental and behavioral health.

The bipartisan letter seeks more robust data about the extent and nature of mental and behavioral health conditions among Medicare beneficiaries. In current data releases, information about depression and psychosis/schizophrenia is included; however, data about mood or personality disorders is not, leaving the public and policymakers without access to valuable information. The letter also refers to the ongoing opioid epidemic, which the legislators note affects seniors just like Americans of other ages, and urges ensuring seniors’ privacy when such data is released.

Mental and behavioral health conditions are often not given as much attention as other health conditions; this omission is particularly egregious when taking into consideration that depression accompanies senior health conditions like diabetes and coronary artery disease, leading to significantly higher health costs. The legislators asked CMS for more detailed data, specifically about anxiety disorders, bipolar disorder, personality disorders, and traumatic brain injury, to allow Medicare to meet the needs of seniors. Substance abuse data should also be made more widely available, with privacy measures such as de-identifying the data.

$330M hospice payment rate increase in 2017

Hospices would see a proposed 2 percent increase in their payments for fiscal year (FY) 2017, amounting to a $330 million increase over FY 2016 numbers, along with changes to the hospice quality reporting program. In an advance release of a Proposed rule set to publish in the Federal Register on April 28, 2016, CMS shared its plan to update the hospice wage index, payment rates, and cap amount for FY 2017. The proposed 2 percent hospice payment update for FY 2017 is based on an estimated 2.8 percent inpatient hospital market basket update, reduced by a 0.5 percent productivity adjustment and by a 0.3 percent point adjustment set by the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148).

The Proposed rule would also address the hospice quality reporting program, which was established by ACA sec. 3004(c), including the addition of new quality measures. CMS would solicit feedback on an enhanced data collection tool and a plan to publicly display quality measures and other hospice data beginning in the middle of 2017. The Proposed rule would update hospice monitoring data analysis and provides discussion about ongoing monitoring efforts. Starting in FY 2014, hospices that fail to meet quality reporting requirements receive a 2 percent reduction to their payments.

Public reporting of hospice information via a Health Compare website will be available some time in calendar year 2017.

Payment cap update

In the FY 2016 Hospice Wage Index and Payment Rate Update Final rule (see Hospice 2016 rate update will bring $160M payment increase, Health Law Daily, August 6, 2015), CMS implemented changes that updated the hospice payment update by percentage rather than using the consumer price index for urban consumers. As required by Soc. Sec. Act sec. 1814(i)(2)(B)(ii), the hospice cap amount for the 2017 cap year will be $28,377.17, which is equal to the 2016 cap amount ($27,820.75) updated by the FY 2017 hospice payment update percentage of 2.0 percent.

The 2017 cap year will start on October 1, 2016, and end on September 30, 2017, as the FY 2016 Final rule had set the alignment of the cap accounting year with the federal fiscal year beginning in 2017.

Quality measures and data collection

Two new quality measures are proposed for FY 2017. The first measure—Hospice Visits When Death is Imminent—would assess hospice staff visits to patient and caregivers in the last week of life. The second measure—Hospice and Palliative Care Composite Process Measure—would assess the percentage of hospice patients who received care consistent with the guidelines. The second measure would be based on measures from the seven currently submitted under the Hospice quality reporting program (QRP).

CMS would enhance the current hospice data collection tool to be more in line with other post-acute care settings. The data collection would be a comprehensive patient assessment tool, rather than the current chart abstraction tool. According to the agency, hospices could use the data as a foundation for valid and reliable information for patient assessment, care planning, and service delivery. The expectation is that there would be greater accuracy in quality reporting, reduction to provider burdens, assurance for hospices fulfilling conditions of participation, and higher quality patient care. CMS also believes that with the data collection tool, future payment determinations could be made.

Additional ACA impact

The Hospice Consumer Assessment of Healthcare Providers and Systems (Hospice CAHPS®) Survey is a component of the Hospice QRP required under the ACA. The Proposed rule provides detailed description of the Hospice CAHPS® Survey, including the model of survey implementation, the survey respondents, eligibility criteria for the sample, and the languages in which the survey is offered, as well as participation requirements for FY 2019 and 2020. Public display of the survey results will not occur until CMS has collected at least four quarters of data. CMS expects public display of the data to occur during CY 2017 at the CAHPS® HOSPICE Survey website.

Lawmakers’, hospitals’ wish upon star ratings temporarily granted

To the approval of lawmakers and various hospital and medical school associations, CMS delayed its intended April 21, 2016, release of overall hospital quality star ratings on its Hospital Compare website until at least July 2016. The delay is partly attributable to efforts raising concerns about whether the involved methodology for star ratings provided a fair, accurate, and meaningful representation of hospital performance. The lawmakers and associations noted that a number of the quality measures that are the ratings’ foundation impact teaching hospitals that treat low socioeconomic status patients, more complex patients, and perform various complicated surgeries. In addition to delaying the star ratings, the regularly scheduled update of data on individual Hospital Compare measures will be delayed until May 4, 2016.

CMS believes that star ratings spotlight excellence in health care quality and make it easier for consumers to use the information on the Hospital Compare website (see Care to compare? Hospital five-star rating system now available, Health Law Daily, April 16, 2015). This is consistent with the call for transparent, easily understood, and widely available public reporting found in the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). The ratings also support using quality measures as a key driver of health care system improvement.


Lawmakers had weighed in on the matter a few days earlier, urging CMS to delay the release and reevaluate its methodology. In a letter to CMS Acting Administrator Andy Slavitt, 60 Senators and 225 Representatives stated concerns that the hospital star ratings, in their current form, could unfairly mask quality or overweigh patient experience measures, which in turn would not help subsequent consumers make well-informed decisions about hospital choices.

It was noted that CMS had provided insufficient details regarding the methodology used to determine the star ratings, and that the agency had not provided hospitals with the data used to derive the ratings. Hospitals did not have the data to replicate or evaluate CMS’ work to determine whether the methodology was fair or accurate.

In addition, the American Hospital Association (AHA), Association of American Medical Colleges, America’s Essential Hospitals, and Federation of American Hospitals stressed the importance of appropriately adjusting for socioeconomic status and patient complexity in the star ratings. The associations noted that CMS had previously considered socioeconomic factors for Medicare Advantage and Medicare Part D programs. For instance, the Medicare Payment Advisory Commission (MedPAC) reported and recommended improvements for outpatient and inpatient facilities to further the ACA push to reevaluate the fee-for-service system drawbacks of rewarding quantity rather than quality of health care services (see MedPAC recommends Medicare reform in 2015 report to Congress, Health Law Daily, March 18, 2015). Both the lawmakers and the AHA asked CMS to incorporate the socioeconomic status on quality measures into future star ratings.