OPPS Final Rule to Cut Site-Neutral Payments in Two-Year Phase-In

The final rule for the 2019 Medicare Outpatient Prospective Payment System (OPPS), released on November 2, includes new site-neutral payment policies, changes to the 340B Drug Pricing Program and updates to the Hospital Outpatient Quality Reporting System intended to reduce administrative burden for providers.

In response to public comments, the Centers for Medicare and Medicaid Services (CMS) said it will phase in the 60 percent reduction in payment for HCPCS code G0463 (hospital outpatient clinic visit for assessment and management of a patient) over a two-year period (see our August 1, 2018 eAlert). This means that half of the total 60 percent payment reduction, a 30 percent reduction, will take effect in 2019. In other words, providers will be paid approximately 70 percent of the OPPS rate for the clinic visit service in 2019. In 2020, providers will receive the site-specific Physician Fee Schedule (PFS) rate for the clinic visit service.

Rather than the predicted $760 million in savings in the proposed rule, the final policy is expected to yield an estimated savings of approximately $380 million in 2019, with approximately $300 million of the savings accruing to Medicare, and approximately $80 million accruing to Medicare beneficiaries in the form of reduced copayments.

An increase of 1.35 in OPPS rates will also take effect in 2019. CMS determined this increase based on a positive 2.9 percent market basket update, a negative 0.8 percent update for a productivity adjustment and a negative 0.75 percent adjustment for cuts under the Affordable Care Act.

As expected, CMS will implement additional cuts to the 340B Drug Pricing Program in 2019, continuing with reductions begun in 2018. The agency will pay the average sales price (ASP) minus 22.5 percent under the PFS for separately payable 340B-acquired drugs furnished by nonexcepted, off-campus provider-based departments of a hospital. The change extends the methodology implemented in 2018 for 340B drugs paid under the OPPS.

CMS will also remove one measure (OP-27: Influenza Vaccination Coverage among Healthcare Personnel) from the Hospital Outpatient Quality Reporting Program in 2020 and remove seven additional measures beginning with the 2021 payment determination. The changes are “consistent with CMS’s commitment to using a smaller set of more meaningful measures and reducing paperwork and reporting burden on providers,” according to the final rule.

New policies will also expand the number of surgical procedures available at ambulatory surgery centers (ASCs) and address differences between how ASC payment rates and hospital outpatient department payment rates are updated for inflation.

The complete final rule is available here. A press release and fact sheet on the final rule are available here and here.

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