On July 25, 2018, the Centers for Medicare & Medicaid Services published its 2019 Medicare hospital outpatient prospective payment system (OPPS) and ambulatory surgical center (ASC) payment system proposed rule.  A fact sheet describing the proposed rule is available here. The proposed rule can be accessed here.

CMS proposes to update hospital OPPS payment rates by 1.25 percent and update ASC payment rates using the hospital market basket rather than the consumer price index-urban (CPI-U) for 2019-2023.  CMS proposes significant changes to certain OPPS payments, including (i) applying a Medicare Physician Fee Schedule (MPFS) equivalent payment rate for clinic visits paid under the OPPS when performed in hospital off-campus provider-based departments (PBDs); and (ii) paying for services in new clinical families of services provided in hospital excepted off-campus PBDs under the MPFS rather than the OPPS.          

The proposal to limit clinic visit services to reimbursement under the MPFS would have an immediate impact on hospitals.  The accompanying fact sheet states that the clinic visit is the most common service billed under the OPPS.   CMS believes that “to the extent that similar services can be safely provided in more than one setting, it is not prudent for the Medicare program to pay more for these services in one setting than another.”  CMS has received reports of off-campus departments converting from physicians’ offices to hospital outpatient departments. The agency believes there has been an increase in clinic visits in the outpatient setting as a result of payment incentives.  Therefore, CMS proposes to cap the OPPS rate for clinic visit services at the MPFS rate beginning January 1, 2019.  CMS believes this will control the volume of these unnecessary services because it removes the payment differential driving the site-of-service decision.   CMS believes this will reduce the average beneficiary copayment by $14 per visit and reduce Medicare spending by $760 million for 2019.  CMS requests comments on other items and services paid under the OPPS that may represent unnecessary increases in outpatient department utilization.

CMS also proposes to pay Average Sale Price (ASP) minus 22.5 percent for 340B drugs furnished by hospital non-excepted off-campus PBDs.

The deadline for submitting comments to CMS on the proposed rule is September 24, 2018.