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CY 2019 OPPS Proposed Rule Extends Site Neutral, 340B Cuts

The Medicare Outpatient Prospective Payment System (OPPS) proposed rule for calendar year (CY) 2019 would broaden the scope of cuts to hospitals in the 340B Drug Pricing Program and to off-campus provider-based departments (PBDs) starting Jan. 1, 2019.

In a statement, America’s Essential Hospitals strongly objected to these additional payment cuts and called on the administration to withdraw its damaging proposal.

Site-Neutral Payment Cuts

Under Section 603 of the Bipartisan Budget Act of 2015 (BBA), Congress instructed the Centers for Medicare & Medicaid Services (CMS) to pay certain, non-excepted, off-campus PBDs under a payment system other the OPPS. CMS  determined that these facilities should be paid under the Medicare Physician Fee Schedule (PFS) at 40 percent of the OPPS payment rate. The agency proposed to continue this payment rate in this year’s PFS proposed rule. Until now, off-campus PBDs that were providing OPPS services before Nov. 2, 2015, were considered excepted and paid under the higher OPPS rate.

Under the 2019 OPPS proposed rule, CMS would reduce payment for outpatient office visits (health care common procedure coding system code G0463) at excepted, off-campus PBDs to 40 percent of the OPPS payment rate, resulting in $760 million in reduced reimbursement. Additionally, CMS proposes to pay excepted, off-campus PBDs at the site-neutral payment rate for new service lines that were not provided during a baseline period of Nov. 1, 2014, to Nov. 1, 2015.

340B Reimbursement Cuts

The proposed rule also would expand a policy that drastically reduces Medicare Part B reimbursement for separately payable drugs purchased through the 340B program. Specifically, CMS proposes that this policy now apply to non-excepted, off-campus PBDs. Last year, CMS decided to exclude these off-campus PBDs from the payment cut, as they are paid under the PFS, which reimburses for separately payable drugs at 106 percent of the average sales price (ASP).

CMS proposes to continue its CY 2018 policy of paying 340B hospitals 77.5 percent of the ASP for most separately payable Part B drugs. CMS previously paid for these drugs at 106 percent of the ASP.

The agency proposes to continue excluding children’s hospitals, certain cancer hospitals, and rural sole community hospitals from the payment cut.

Outpatient Payment, Quality Reporting Provisions

Regarding outpatient payment and quality reporting, the proposed rule:

  • incorporates the Meaningful Measures Initiative, which CMS launched last year to identify high-priority areas for quality measurement and improvement;
  • removes 10 measures from the Outpatient Quality Reporting (OQR) Program (one from the CY 2020 payment determination and nine from the CY 2021 payment determination);
  • updates the factors to be considered when removing measures from the OQR Program; and
  • suggests removing two procedures from the inpatient-only list and adding one procedure to the list.

Hospital Inpatient Quality Reporting (IQR) Program Update

CMS proposes modifying the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) patient experience of care survey measure by removing the three recently revised pain communication questions, starting with discharges on Jan. 1, 2022. The change comes in response to continued concerns that providers might feel pressure to offer opioids to raise their HCAHPS Survey score.

Interoperability Request for Information (RFI)

CMS seeks feedback on the possibility of revising conditions of participation related to interoperability as a way to increase providers’ electronic data sharing.

Transparency RFI

Regarding transparency, the agency seeks comment on:

  • whether to require providers and suppliers — including providers receiving payment under the OPPS — to inform patients about charges and payment information, including out-of-pocket costs;
  • what information would be most beneficial to patients; and
  • what changes are needed to empower consumers.

America’s Essential Hospitals is analyzing the proposed rule for comment and will send members a detailed Action Update in the coming days. CMS is accepting comments on the proposed rule until Sept. 24.

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


About the Author

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

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