‘Mid-build’ outpatient departments: submit paperwork soon to qualify for OPPS exemption

Off-campus provider-based hospital outpatient departments (HOPDs) that qualify for the mid-build exception must submit the required materials to their Medicare Administrative Contractor by February 13, 2017, to qualify for the exception for services provided in 2018. The hospital must (1) attest that department requirements are met; (2) include the department on the provider’s enrollment form; and (3) and submit a written certification that the department met the mid-build requirement that is signed by the CEO or COO of the main provider. All attestations must be audited by HHS for accuracy.

Outpatient prospective payment changes

Under the 2017 Outpatient Prospective Payment System (OPPS) Final rule (81 FR 79562), CMS implemented section 603 of the Bipartisan Budget Act (P.L. 114-74), which disallows payment made to off-campus HOPDs under the OPPS (see OPPS, ASC payment rates updated; off-campus PBD billing system established, Health Law Daily, November 2, 2016). This provision was created to ensure that services are billed at a uniform rate, regardless of the facility in which the services are provided.

21st Century Cures Act

Section 16001 of the 21st Century Cures Act (P.L. 114-255) provides an important “mid-build” exception for off-campus HOPDs that had a written contract with an outside party for construction of the facility before November 2, 2015. CMS’ preliminary guidance outlines the requirements for HOPDs that qualify for the 2018 exception. It also clarifies that attestations received from providers before December 2, 2015, qualifies that provider for the exception, and that these HOPDs should continue to use the ‘PO’ modifier when billing, rather than the ‘PN’ modifier. Those that did not submit timely attestations are to use ‘PN,’ which triggers the Medicare physician fee schedule (MPFS) payment.

The Cures Act also excepted HOPDs of cancer hospitals from the change to OPPS. Departments that met the requirements of 42 C.F.R. section 413.65 between November 1, 2015, and December 13, 2016, will qualify, as long as attestation is received February 13, 2017. HOPDs of cancer hospitals that meet regulatory requirements after December 13, 2016, will be exempt as long as an attestation is received within 60 days of meeting the requirements.

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.