CMS Proposes 2018 Payments to Non-excepted Provider-based Departments at 25% of OPPS Rates

Proposal would lead to massive reimbursement cut for certain services performed in non-excepted, provider-based clinics despite CMS' lack of data.

This article was originally published on Revenue Cycle Advisor, July 17, 2017.

Hospital providers will need to look beyond the OPPS proposed rule for policies regarding 2018 reimbursement, as the 2018 Medicare Physician Fee Schedule (MPFS) proposed rule includes a policy that could once again have significant payment impact on non-excepted, off-campus provider-based departments (PBD).

For 2017, CMS finalized a policy to pay non-excepted, off-campus PBDs at 50% of OPPS rates for most services, excluding those paid on another fee schedule (e.g., Clinical Laboratory Fee Schedule) and separately paid drugs, which continue to be paid separately at average sales price plus 6%.

For CY 2018, CMS proposes to reduce those payments further so that payment would be made at 25% of the OPPS rate.

“CMS’ proposal is incredibly dramatic,” says Jugna Shah, MPH, president and founder of Nimitt Consulting. “It’s quite surprising to see the agency propose this, as it would result in cutting payments by half again without even having had time to analyze the current payment methodology and without having addressed comments received previously.”

In the 2017 OPPS final rule, CMS wrote that the 50% reduction was temporary until more precise data was available, but now writes that it will not have that data until the end of 2017, at the earliest. To propose a further cut despite this is likely to raise significant concern among providers, says Shah.

CMS adds in the MPFS proposed rule that the 25% reduction is an “imprecise adjustment” of payment rates, but wants to ensure it does not overestimate the appropriate payment for these services.

CMS is requesting provider feedback on this payment rate reduction, even suggesting in the MPFS proposed rule that a reduction of 40% may be more appropriate as a middle ground between 2017 rates and its proposal.

For more information on the MPFS, including requests for comment on E/M changes, see the 2018 proposed rule, fact sheet, and coverage in Part B News. Comments on the rule are due by September 11.