The Centers for Medicare and Medicaid Services (CMS) issued the 2018 Medicare: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs Final Rule with comment period, scheduled to be published in the Federal Register on November 13, 2017. The Final Rule, effective January 1, 2018, includes the following changes to Medicare payment rates and policies, among others:
- Increased Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment Rates. CMS is increasing the payment rates under the OPPS by 1.35 percent for CY 2018. After applying the other policy changes in the Final Rule, CMS estimates a total impact to OPPS providers of 1.4 percent in increased payment. CMS updates ASC payment rates annually by a factor based on the Consumer Price Index for urban consumers (CPI-U). After application of the CPI-U factor increase, including estimated changes in enrollment, utilization, and case-mix, CMS expects total ASC payment to increase by approximately 3 percent for CY 2018.
- Reduced Reimbursement for 340B Drug Program. Citing increasing drug prices, CMS will be reducing reimbursement for separately payable drugs and biologicals (other than pass-through drugs and vaccines) from Average Sales Price (ASP) plus 6 percent to ASP minus 22.5 percent. CMS is imposing this increase despite the fact that MedPAC had previously recommended a decrease to only ASP minus 4 percent. Rural Sole Community Hospitals (SCHs), Children’s Hospitals, and PPS-exempt Cancer Hospitals will be excluded from this adjustment in CY 2018.
- Changes to the Inpatient Only List and ASC Covered Surgical Procedures. For CY 2018, CMS removed six procedures from the “inpatient only” list and added one procedure. Total knee arthroplasty (TKA) was among the procedures removed from the inpatient only list. In addition, CMS decided to preclude the Recovery Audit Contractors from reviewing TKA procedures for “patient status” (site of service) for a 2 years. CMS is adding 3 procedures to the ASC covered procedures list: CPT codes 22856 and 22858, certain total disc arthroplasty (artificial disc) procedures, and 58572, certain laparoscopy surgical procedure with total hysterectomy.
- Revisions to the Laboratory Date of Service (DOS) Policy. The DOS is normally the date a laboratory specimen is collected, unless certain conditions are met. CMS is adding an additional exception to the current laboratory DOS regulations. According to CMS, the new exception generally permits laboratories to bill Medicare directly for advanced diagnostic laboratory tests (ADLTs) and molecular pathology tests excluded from OPPS packaging policy, if the specimen was collected from a hospital outpatient during a hospital outpatient encounter and the test was performed following the patient’s discharge from the hospital outpatient department.
- Direct Supervision of Hospital Outpatient Therapeutic Services. CMS is reinstating the moratorium on enforcement of the requirement for direct physician supervision of outpatient therapeutic services furnished in Critical Access Hospitals (CAHs) and small rural hospitals having 100 or fewer beds.
- Packaging of Low-Cost Drug Administration Services. In CY 2015, CMS had implemented a policy to conditionally package ancillary services assigned to Ambulatory Payment Classifications (APCs) with a geometric mean cost of $100 or less prior to packaging, with some exceptions, including drug administration services. For CY 2018, under the Final Rule, CMS is removing the exception for certain drug administration services and will be conditionally packaging payment for low-cost drug administration services.
- Skin Substitute Products (Used to Aid Wound Healing). CMS is assigning all skin substitutes to a category of “high cost group” to maintain similar levels of payment for these products while CMS decides whether it will refine the payment methodologies. In CY 2017, CMS had established a threshold for skin substitute products having a geometric mean unit cost (MUC) or a per day cost (PDC) that exceeded either the MUC threshold or the PDC threshold to the high cost group. The Final Rule eliminated this threshold requirement for CY 2018.
- Declining to Approve Device Pass-Through Payment Applications. CMS evaluated five devices for eligibility to receive pass through payments, and did not approve any of the applications for CY 2018.
- Continuations. CMS will continue, among other things, the following for CY 2018:
- Application of the statutory 2.0 percentage point reduction in payments for hospitals failing to meet the hospital outpatient quality reporting requirements.
- The 7.1% adjustment to the OPPS payments to certain rural SCHs, including Essential Access Community Hospitals (EACHs), applicable to all services paid under the OPPS, except separately payable drugs and biologicals, devices paid under the pass-through payment policy, and items paid at charges reduced to cost.
- Providing additional payments to Cancer Hospitals, as needed to result in a payment-to-cost ratio (PCR) equal to 0.88 for each Cancer Hospital, which will be paid at cost report settlement.
- The methodology established in CY 2017 for a unified rate structure with a single Partial Hospitalization Program (PHP) payment rate for each provider type for days with 3 or more services per day.
- Hospital Outpatient Quality Reporting (OQR) Program for Outpatient Services. Under the OQR Program, hospital outpatient facilities must submit data on quality measures and meet certain other requirements or face a 2 percentage points reduction to their annual payment update. CMS is making changes to certain measures, anticipating this will limit provider burden. Beginning with the CY 2020 payment determination, CMS will remove:
- OP-21: Median Time to Pain Management for Long Bone Fracture;
- OP-26: Hospital Outpatient Volume Data on Selected Outpatient Surgical Procedures;
- OP-1: Median Time to Fibrinolysis;
- OP-4: Aspirin at Arrival;
- OP- 20: Door to Diagnostic Evaluation by a Qualified Medical Professional;
- OP-25: Safe Surgery Checklist
CMS also decided it will publicly report OP-18c: Median Time from Emergency Department Arrival to Emergency Department Departure for Discharged Emergency Department Patients – Psychiatric/Mental Health Patients. In addition, CMS will delay the OAS CAHPS Survey-based measures (OP-37 a-e) beginning with the CY 2020 payment determination (CY 2018 reporting).
- Ambulatory Surgical Center Quality Reporting (ASCQR) Program. Beginning with the CY 2019 payment determination, CMS will remove three measures from the ASCQR Program measure set:
- ASC-5: Prophylactic Intravenous (IV) Antibiotic Timing;
- ASC-6: Safe Surgery Checklist Use;
- ASC-7: Ambulatory Surgical Center Facility Volume Data on Selected Ambulatory Surgical Center Surgical Procedures.
CMS also plans to delay the OAS CAHPS Survey measures (ASC-15a-e) beginning with the CY 2020 payment determination (CY 2018 data collection). In addition, starting with CY 2018, CMS will: (1) expand the CMS online tool to also allow for batch submission of measure data and make corresponding changes to the CFR; and (2) align the naming of the Extraordinary Circumstances Exceptions (ECE) policy with that used in our other quality reporting and value-based payment programs and make corresponding changes to the CFR. Beginning with the CY 2022 payment determination, CMS will adopt two new measures collected via claims: (1) ASC-17: Hospital Visits after Orthopedic Ambulatory Surgical Center Procedures, and (2) ASC-18: Hospital Visits after Urology Ambulatory Surgical Center Procedures.