2017 Guide To The Proposed and Final Rule Update for OPPS & PDBs

For calendar year 2017, the Centers for Medicare & Medicaid Services (CMS) have finalized updated payment rates and policy changes in the Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System.

CMS wrote that the finalized policy changes “will improve the quality of care Medicare patients receive.”

Download our free eBrief, 2017 Quick Guide to the Outpatient Prospective Payment System (OPPS) Proposed and Final Rule to get the full guide.

Provider-Based Departments (PBDs)

Proposal: CMS proposed implementing site-neutral payment provisions from Section 603 of the Bipartisan Budget of 2015, which states that off-campus PBDs that began billing under the OPPS on or after November 2, 2015, would no longer be paid for most services under the OPPS. Beginning January 1, 2017, these facilities would be paid under other applicable Medicare Part B payment systems. CMS proposed that the Medicare Physician Fee Schedule (MPFS) be the applicable payment system for the majority of services provided in new off-campus PBDs in 2017.

Final: CMS is implementing Section 603 of the Bipartisan Budget Act of 2015. Under this section, certain off-campus provider-based departments that began billing under the OPPS on or after November 2, 2015, will no longer be paid for most services under the OPPS. Beginning January 1, 2017, these facilities will be paid under the MPFS. However, services provided in a dedicated emergency department will continue to be paid under the OPPS.

Proposal: CMS proposed certain restrictions on off-campus PBDs that began billing under the OPPS prior to November 2, 2015. For instance, these departments must continue to offer the same services and bill from the same physical address as they did on November 2, 2015 to be excepted from the site-neutral payment provisions.

Final: CMS developed certain restrictions on off-campus PBDs that began billing under the OPPS prior to November 2, 2015. The agency finalized their proposal requiring these departments to provide services and bill from the same physical address as they did November 2, 2015, to be excepted from the site-neutral payment provisions. Exceptions will be made for off-campus PBDs forced to temporarily or permanently relocate due to extraordinary circumstances, such as a natural disaster, according to CMS.

Proposal: CMS proposed to limit the expansion of clinical services lines offered by off-campus PBDs.

Final: CMS chose not to finalize this proposal. CMS will monitor expansion of clinical service lines by off-campus PBDs and continue to consider whether a potential limitation on service line expansion should be adopted in the future.

Proposal: In CY 2015 OPPS/ASC final rule with comment period (79 FR 66910 through 66914), CMS adopted a voluntary claim modifier ‘‘PO’’ to identify services furnished in off-campus PBDs (other than emergency departments, remote locations and satellite locations of the hospital) to collect data that would help identify the type and costs of services typically furnished in off-campus PBDs.

Based on the provision in the CY 2015, OPPS/ASC final rule with comment period, use of this modifier became mandatory beginning in CY 2016. While the modifier identifies that the service was provided in an off-campus PBD, it does not identify the type of PBD in which services were furnished, nor does it distinguish between multiple PBDs of the same hospital. CMS proposed development of a new modifier to identify non-excepted items and services.

Final: CMS finalized their proposal establishing a new modifier “PN” – “Non-excepted service provided at an off-campus, outpatient, provider-based department of a hospital,” that will be required to be billed with non-excepted items and services. CMS is establishing this new claim line modifier for non-excepted items and services (“PN”) that will be used to identify and pay non-excepted items and services billed on an institutional claim.

This modifier will be effective for items and services furnished on or after January 1, 2017, and is discussed in more detail in section X.A.3.b.(2) of this final rule with comment period. Under this final policy, a hospital will bill for non-excepted items and services on the institutional claim and must identify that such items and services are non-excepted through use of claim line modifier “PN.” The “PN” modifier will be used to trigger payment under the newly adopted PFS rates for non-excepted items and services. Specifically, non-excepted off-campus PBDs must report modifier “PN” on each UB-04 claim line to indicate a non-excepted item or service, but should otherwise continue to bill as they currently do.

There are no billing changes for excepted items and services provided at an off-campus PBDs because these items and services remain covered outpatient department services that are paid under the OPPS.

The final rule also included: Payment Update, Electronic Health Record (EHR), Meaningful Use, Comprehensive Ambulatory Payment Classifications (C-APCs), Outpatient Laboratory Services, and Payment Modifier for X-Ray Films.