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CMS Issues 2017 OPPS Final Rule with Site-Neutral Provisions

The Centers for Medicare & Medicaid Services (CMS) Nov. 1 released its Medicare Outpatient Prospective Payment System (OPPS) final rule to set payment rates and policies for calendar year (CY) 2017.

The rule includes provisions that carry out Section 603 of the Bipartisan Budget Act of 2015 (BBA), which reduced Medicare reimbursement to off-campus, provider-based departments (PBDs) not billing Medicare for services performed before Nov. 2, 2015. An initial review of these provisions indicates CMS has provided some flexibility not offered in its proposed rule, such as ensuring non-grandfathered PBDs would receive reimbursement in CY 2017.

But even with these changes, the final rule will continue to put underserved communities at risk of further declines in access to vital health care services, America’s Essential Hospitals said in a Nov. 1 media statement.

Reduced reimbursement rates under Section 603 will begin Jan. 1, 2017. For CY 2017, CMS will apply the Medicare Physician Fee Schedule (MPFS) for the majority of items and services furnished in new, off-campus PBDs. In a separate interim final rule issued with the final rule, CMS revised its original position not to direct any MPFS payment to the PBDs in 2017. Instead, CMS established an interim payment rate under the MPFS that equals 50 percent of the OPPS rate for most services.

The rule also addresses when a PBD is considered to be grandfathered and, thus, still paid under the OPPS rate. CMS finalized some limited flexibility for PBDs that relocate due to extraordinary circumstances, such as natural disasters and seismic building code requirements. Moreover, CMS opted against limiting the expansion of services in existing clinics, allowing them to adapt services to meet changing community needs.

In addition to the Section 603 provisions, the final rule makes these changes to outpatient payment and quality reporting:

  • increases the OPPS payment rate by 1.65 percent;
  • adds 25 new comprehensive ambulatory payment classifications (C-APCs) for CY 2017, bringing the total number of C-APCs to 62;
  • provides flexibility in the Medicare and Medicaid Electronic Health Record Incentive Programs, including a 90-day reporting period in 2016 and 2017, as well as a hardship exemption for certain providers and reduced measure thresholds;
  • adds seven measures to the Outpatient Quality Reporting program for CY 2020 payment determination; and
  • removes the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) pain management dimension of the hospital Value-Based Purchasing Program beginning in FY 2018.

America’s Essential Hospitals is analyzing the final rule for comment and will send members two detailed updates: one summarizing the provisions related to Section 603 and another on additional provisions of interest. The association also will host a webinar for members; more details, including a date and time, will follow.

Contact Director of Policy Erin O’Malley at or 202.585.0127.


About the Author

Shahid Zaman is a senior policy analyst at America's Essential Hospitals.

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