CMS Finalizes Payment Changes for Off-Campus Provider-Based Departments

The Centers for Medicare & Medicaid Services (CMS) released its 2017 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center Payment System Final Rule (Final Rule) on Tuesday.

The Final Rule implements section 603 of the Bipartisan Budget Act of 2015 relating to payment for items and services furnished by certain off-campus provider-based departments of a provider. Section 603 of the Act amended the Social Security Act by providing that items and services furnished at off-campus departments of a hospital will not be reimbursed under the OPPS if items and services furnished at that off-campus department were not billed as outpatient hospital services prior to November 2, 2015.  CMS uses the term “nonexcepted” when referring to a location or items or services that are subject to the new payment limitations.  The Final Rule appears to largely adopt the regulations included in its proposed rule published in July, with only some modification.

In addition, CMS also released an interim final rule (Interim Final Rule) in the same publication establishing the Medicare Physician Fee Schedule as the “applicable payment system” for the majority of the nonexcepted items and services furnished by nonexcepted off-campus provider-based departments. The Interim Final Rule establishes new site-of-service payment rates under the Medicare Physician Fee Schedule to pay nonexcepted off-campus provider-based departments for the furnishing of nonexcepted items and services.  These nonexcepted items and services must be reported on the institutional claim form and identified with a newly established claims processing modifier.

CMS is soliciting comments on certain aspects of both the Final Rule and the Interim Final Rule. Comments are due by December 31, 2016.  The advanced copy of the Final Rule is available here.  The official version of the Final Rule is scheduled for publication in the Federal Register on November 14, 2016.

Look for a more detailed analysis of the Final Rule and Interim Final Rule from Dorsey and Whitney.

Benjamin Fee

Ben practices exclusively in the area of health law advising health systems, hospitals, pharmacies, long term care providers and medical practices on a variety of regulatory, compliance and corporate transactional matters. He regularly counsels clients on fraud and abuse issues, including compliance with the federal Stark Law, federal and state anti-kickback statutes, HIPAA privacy and security matters, state pharmacy laws, licensure and accreditation matters and corporate compliance issues. He also works with clients regarding investigations coordinated through numerous federal and state enforcement agencies, including the Department of Justice, United States Attorney Offices, the Office of Inspector General and Medicaid Fraud Control Units. Additionally, Ben advises clients regarding voluntary self-disclosures made to the Office of Inspector General and the Centers for Medicare and Medicaid Services. He further counsels organizations regarding the functions of their corporate compliance programs, including coordinating internal investigations, recommending corrective action, reviewing program effectiveness and providing compliance education and training to provider staff and Board members.

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