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Policy & Regulation News

Site-Neutral Payments for Hospital Clinic Visits Starting in 2019

CMS finalized a policy that will extend site-neutral payments to clinic visits furnished in hospital outpatient departments.

Site-neutral payments and hospital outpatient

Source: Thinkstock

By Jacqueline LaPointe

- Hospitals will face site-neutral payments for clinic visits, but not for new clinical families of services, according to the new final 2019 Hospital Outpatient Prospective Payment System (OPPS) rule.

CMS recently finalized the contentious site-neutral payment policy for off-campus provider-based departments paid under the OPPS. Starting in 2019, the federal agency will start to pay the hospital outpatient departments a Physician Fee Schedule (PFS)-equivalent rate for clinic visit services.

The site-neutral payments aim to lower costs for the most commonly billed service under the OPPS. CMS reported that Medicare and its beneficiaries pay more for clinic visit services when they are furnished in the hospital outpatient versus physician office setting.

Site-neutral payments for clinic visit services will reduce Medicare spending by $380 million in 2019, the first year of the two-year phase-in of the policy. And individual beneficiaries will pay an average of $7 less in copayments for clinic visits at the off-campus provider-based departments.

“President Trump is committed to strengthening Medicare and lowering costs for patients. Today’s rule advances competition by creating a level playing field for providers so they can compete for patients on the basis of quality and care,” CMS Administrator Seema Verma stated in an emailed press release. “The final policies remove unnecessary and inefficient payment differences so patients can have more affordable choices and options.”

CMS intends for site-neutral payments for outpatient clinic visits to spur competition and lower healthcare costs. However, industry leaders have disagreed with the policy.

The American Hospital Association (AHA) has been very outspoken with their opposition to the payment policy, arguing the reduced hospital payments would negatively impact care quality. The recently finalized rule will cut hospital payments for the services to 40 percent of the outpatient rate.

“Making additional cuts to outpatient payment of the magnitude proposed in the clinic visit policy would be excessive and harmful. It would endanger the critical role that hospital outpatient departments (HOPDs) play in their communities, including providing convenient access to care for the most vulnerable beneficiaries, including the sickest, most medically complex patients,” the hospital group told CMS in September 2018.

Over 130 lawmakers also argued in October 2018 that the expansion of site-neutral payments to clinic visits would affect the value-based care transition.

“[W]e believe that these change should not diminish progress made in the shift to value over volume in today’s healthcare system,” the House Representatives explained to CMS. “As providers enter into different-value-based payment arrangements it is important that rate changes do not undercut these arrangements – potentially diminishing provide desire to invest in these positive changes.”

Despite industry pushback, CMS will move forward with the site-neutral payment policy for clinic visits starting in 2019.

Although, the federal agency will not implement a proposed policy to pay a site-neutral rate for services part of new clinical families.

“In CY 2019 OPPS/ASC proposed rule, CMS proposed a policy that off-campus PBDs [provider-based departments] excepted from Section 603 of the Bipartisan Budget Act of 2015 could continue to be paid at OPPS rates for items and services in each of 19 proposed ‘clinical families of services’ if a PBD furnished and billed for a service in that clinical family of services prior to November 2, 2015,” a fact sheet explained. “CMS is not finalizing this proposal in the CY 2019 OPPS/ASC final rule with comment period, but we will continue to monitor the expansion of services in excepted off-campus PBDs.”

In addition to site-neutral payments, the federal agency also finalized OPPS rates for 2019. Hospitals will see a 1.35 percent boost in Medicare reimbursement next year.

The final rule will also extend the new 340B drug payment methodology to non-excepted off-campus provider-based departments paid under the Physician Fee Schedule. In 2019, the departments will receive the average sales price (ASP) minus 22.5 percent for separately payable non-pass-through drugs and biologicals acquired through the 340B program.

The payment methodology will replace the ASP plus six percent rate currently in use.

Stakeholders can view the entire 2019 Hospital OPPS rule here.


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