Policy & Regulation News

2015 proposed outpatient PPS policy changes, payment rates

By Elizabeth Snell

- On Monday, July 14, 2014, the Centers for Medicare & Medicaid Services (CMS) announced a proposed rule that would update the payment policies and payment rates for services furnished to Medicare beneficiaries in hospital outpatient departments and Ambulatory Surgical Centers (ASCs) beginning January 1, 2015.

Additionally, the proposed rule would update and refine the requirements for the Hospital Outpatient Quality Reporting (OQR) Program and the ASC Quality Reporting (ASCQR) Program.

Here is a quick rundown of the details of the proposed rule:

Major provisions

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  • The fee increase would be 2.1 percent, based on the proposed hospital inpatient market basket percentage increase of 2.7 percent for inpatient services paid under the hospital inpatient prospective payment system (IPPS), minus the proposed multifactor productivity (MFP) adjustment of 0.4 percentage points, and minus a 0.2 percentage point adjustment required by the Affordable Care Act.

    CMS estimates that the proposed total payments for CY 2015 would be approximately $56.5 billion, an increase of approximately $5.2 billion compared to CY 2014 payments, or $800 million excluding our estimated changes in enrollment, utilization, and case-mix.

    Moreover, CMS proposes 28 comprehensive APCs for CY 2015. This includes all of the device-dependent APCs remaining after some restructuring and consolidation of these APCs and two comprehensive APCs for other procedures. CMS is also proposing that proposing a lower volume and cost threshold criteria for APC complexity adjustments. The organization is also proposing to package all add-on codes furnished as part of a comprehensive service, consistent with its general add-on code packaging policy.

    Costs and benefits

    With the proposed rule, CMS estimates that the proposed policies would result in a 2.2 percent overall increase in OPPS payments to providers. Additionally, there will be an estimated 1.6 percent decrease in CY 2015 payments to CMHCs relative to their CY 2014 payments. CMS also estimates that the proposed updated wage indexes will have a positive impact on payments to hospitals.

    With the application of the proposed OPD fee schedule increase, CMS predicts that the small negative impacts of the budget neutrality adjustments would be mitigated. Moreover, rural and urban hospitals would experience increases of approximately 2.1 percent for urban hospitals and 2.4 percent for rural hospitals.

    The proposed ASC payment update would also affect estimated total payments by specialty groups. Specifically, CMS estimates 3.0 percent for cardiovascular system procedures and 12 percent for hematologic and lymphatic system procedures.

    Proposed OPPS payment for devices

    CMS wants to propose and finalize the dates for expiration of pass-through status for device categories as part of the OPPS annual update.

    For CY 2015, CMS proposes that as of January 1, 2016, HCPCS code C1841 will no longer be eligible for pass-through payment status. Additionally, CMS suggests to package the cost of HCPCS code C1841 after December 31, 2015, into the costs related to the procedures with which it is reported in its claims data.

    Pass-through payments for additional costs

    CMS proposes that the pass-through status of 9 drugs and biologicals would expire on December 31, 2014. All of these drugs and biologicals will have received OPPS pass-through payment for at least two years and no more than three years by December 31, 2014.

    Moreover, CMS suggest continuing the pass-through status in CY 2015 for 22 drugs and biologicals. None of these drugs and biologicals will have received OPPS pass-through payment for at least two years and no more than three years by December 31, 2014.

    CMS’ proposed rule will also include details on OPPS Payment for Drugs, Biologicals, and Radiopharmaceuticals Without Pass-Through Status.

    Additional proposals

    Also included in CMS’ proposed rule are details on payments for partial hospitalization services, procedures that would be paid only as inpatient procedures and collecting data on services furnished in off-campus provider-based departments.
    CMS is also proposing updates to the Ambulatory Surgical Center (ASC) Payment System and various hospital reporting program updates.