Medicare HOPPS, ASC Rates and Policies Finalized for CY 2018

December 2017 ~

CMS has published the final rule updating Medicare Hospital Outpatient Prospective Payment System (HOPPS) and Ambulatory Surgical Center (ASC) Payment System rates and policies for calendar year 2018 (CY 2018). The agency states the finalized policies aim to support care delivery, reduce burdens for health care providers, lower beneficiary out of pocket drug costs for certain drugs, enhance the patient-doctor relationship, and promote flexibility in healthcare. Major provisions of the final rule include:

Patients Over Paperwork Initiative

According to the agency, the cross-cutting, collaborative process evaluates and streamlines regulations with a goal to reduce unnecessary burden, increase efficiencies, and improve the beneficiary experience by removing regulatory obstacles that get in the way of providers spending time with patients. Under the final rule and part of this initiative:

  • CMS is reinstating the non-enforcement of direct supervision requirements for outpatient therapeutic services for Critical Access Hospitals and small rural hospitals having 100 or fewer beds for CYs 2018 and 2019.
  • CMS is finalizing the removal of three Ambulatory Surgical Center Quality Reporting (ASCQR) Program quality measures for the CY 2019 payment determination and subsequent years. Removal of these measures would alleviate maintenance costs and administrative burdens to the ASCs, resulting in a burden reduction of 1,314 hours and saving $48,066 in CY 2019.
  • CMS is also finalizing the removal of 6 Hospital Outpatient Quality Reporting (OQR) Program quality measures, resulting in a burden reduction of 457,490 hours and saving $16.7 million in CY 2020 for hospitals.

OPPS Final Payment Policy Changes for 2018

OPPS Payment Update 
The final rule provides a 1.35% update for 2018, reflecting a 2.7% market basket increase that is partly offset by both a 0.75 percentage point reduction and a 0.6% multi-factor productivity (MFP) reduction. The update for hospitals that fail to meet quality reporting requirements is reduced by 2.0% points.

Payment for Drugs and Biologicals (“Drugs”) Purchased through the 340B Drug Pricing Program
Under the new 340B discount drug policy CMS will reduce OPPS payment for separately payable, nonpass-through drugs and biologicals (other than vaccines) purchased through the 340B drug discount program from ASP plus 6% to ASP minus 22.5% (rural sole community hospitals, children’s hospitals, and certain cancer hospitals are excluded from this policy). CMS is redistributing the $1.6 billion in savings from this change by increasing by 3.2% conversion factor for non-drug items and services for 2018.

Supervision of Hospital Outpatient Therapeutic Services
For CY 2018, CMS is reinstating the non-enforcement of direct supervision requirements for outpatient therapeutic services for CAHs and small rural hospitals having 100 or fewer beds for CYs 2018 and 2019.

Packaging of Low-Cost Drug Administration Services
CMS will conditionally packaging payment for low-cost drug administration services.

Inpatient Only List
CMS removed total knee arthroplasty (CPT code 27447) and CPT code 55866 (Laparoscopy, surgical prostatectomy) from the inpatient-only list (IPO). This allows – but does not require — these procedures to be performed in the hospital outpatient setting.

High Cost/Low Cost Threshold for Packaged Skin Substitutes
CMS finalized its proposal that a skin substitute product that does not exceed either the CY 2018 MUC or PDC threshold for CY 2018, but was assigned to the high cost group for CY 2017, will be assigned to the high cost group for CY 2018. According to the agency, the goal of this policy is to maintain similar levels of payment for skin substitute products for CY 2018 while CMS analyzes the current skin substitute payment methodology to determine whether refinements to the existing methodologies may be warranted.

Revisions to the Laboratory Date of Service Policy
For a clinical diagnostic laboratory test, the date of service (DOS) is typically the date the specimen was collected, unless certain conditions are met. For CY 2018, CMS added an additional exception to the current laboratory DOS regulations, effective January 1st. This new exception to the laboratory DOS policy generally permits laboratories to bill Medicare directly for ADLTs and molecular pathology tests excluded from OPPS packaging policy if the specimen was collected from a hospital outpatient during a hospital outpatient encounter and the test was performed following the patient’s discharge from the hospital outpatient department.

Partial Hospitalization Program (PHP) Rate Setting
The final rule also updates Medicare payment rates for PHP services furnished in hospital outpatient departments and Community Mental Health Centers (CMHCs). In 2018, CMS will maintain the methodology established in CY 2017.

ASC Payment Policy Provisions

ASC Payment Update
CY 2018, the CPI-U update is 1.7%. The MFP adjustment is 0.5%, resulting in a CY 2018 MFP-adjusted CPI-U update factor of 1.2%. Including enrollment, case-mix, and utilization changes, total ASC payments are projected to increase approximately 3% in 2018.

Comment Solicitation on ASC Payment Reform
Also in the rule, CMS acknowledges the recommendations received regarding solicitation for an alternative update factor for ASC payments. The agency stated that the “vast majority” of commenters supported using the hospital market basket for the ASC update. CMS will continue to take commenters’ feedback into consideration in future policy development.

ASC Covered Procedures List
For CY 2018, CMS finalized the proposal to add three procedures to the ASC covered procedures list (CPL). In addition, CMS solicited comments on whether total knee arthroplasty, partial hip arthroplasty, and total hip arthroplasty meet the criteria to be added to the ASC-CPL. CMS also solicited comments from stakeholders on whether there are codes outside of the AMA-CPT surgical code range that, nonetheless, should be considered to be a surgical procedure. CMS will continue to take commenters’ feedback into consideration in future policy development.

Hospital Outpatient Quality Reporting (OQR) Program

In the CY 2018 OPPS/ASC final rule, CMS finalized proposals to balance the value of quality data with efforts to limit provider burden. The agency finalized the removal of six measures for this setting, resulting in a burden reduction of 457,490 hours and $16.7 million with respect to requirements for the CY 2020 payment determination. These measures include:

  • OP-21: Median Time to Pain Management for Long Bone Fracture, which measures the median time from emergency department (ED) arrival to time of initial oral, nasal, or parenteral pain medication (opioid and non-opioid) administration for emergency department patients with a principal diagnosis of long bone fracture. This measure is being finalized for removal beginning with the CY 2020 payment determination.
  • OP-26: Hospital Outpatient Volume Data on Selected Outpatient Surgical Procedures, which assesses the aggregate count of selected, higher volume, surgical procedures performed in Hospital Outpatient Departments. This measure is being finalized for removal beginning with the CY 2020 payment determination.
  • OP-1: Median Time to Fibrinolysis, which assesses the median time from ED arrival to administration of fibrinolytic therapy in ED patients with ST-segment elevation on the ECG performed closest to ED arrival and prior to transfer. This measure was proposed to be removed beginning with the CY 2021 payment determination, but is being finalized for removal beginning with the CY 2020 payment determination in response to public comments requesting earlier removal.
  • OP-4: Aspirin at Arrival, which assesses the rate of patients with chest pain or possible heart attack who received aspirin within 24 hours of arrival or before transferring from the emergency department. This measure was proposed to be removed beginning with the CY 2021 payment determination, but is being finalized for removal beginning with the CY 2020 payment determination in response to public comments requesting earlier removal.
  • OP-20: Door to Diagnostic Evaluation by a Qualified Medical Professional, which assesses the time from ED arrival to provider contact for emergency department patients. This measure was proposed to be removed beginning with the CY 2021 payment determination, but is being finalized for removal beginning with the CY 2020 payment determination in response to public comments requesting earlier removal.
  • OP-25: Safe Surgery Checklist Use, which assesses whether a hospital employed a safe surgery checklist that covered each of the three critical perioperative periods (prior to administering anesthesia, prior to skin incision, and prior to patient leaving the operating room) for the entire data collection period. This measure was proposed to be removed beginning with the CY 2021 payment determination, but is being finalized for removal beginning with the CY 2020 payment determination in response to public comments requesting earlier removal.

Consumer Assessment of Healthcare Providers and Systems OAS CAHPS

CMS also finalized the proposal to delay the mandatory implementation of the Consumer Assessment of Healthcare Providers and Systems Outpatient and Ambulatory Surgery Survey (OAS CAHPS) under the Hospital OQR Program beginning with the CY 2018 data collection.

Validation of Chart-Abstracted Measures

In the rule, CMS also provides clarification on the procedures for validation of chart-abstracted measures to note that 50 outlier hospitals, based on poor measure scoring, will be targeted for validation. CMS is finalizing: policy to formalize the chart-abstracted measures validation educational review procedures, updates to include a corrections process, and corresponding regulatory updates to reflect these policies. In addition, CMS is finalizing its proposal to align the first quarter for which to submit data for hospitals that did not participate in the previous year’s Hospital OQR Program and make corresponding regulatory updates. CMS is also finalizing a proposal to align the naming of the Extraordinary Circumstances Exceptions (ECE) policy with other quality reporting programs and corresponding regulatory updates to reflect these policies. CMS is also finalizing, with modification, its proposal to publicly report OP-18c: Median Time from Emergency Department Arrival to Emergency Department Departure for Discharged Emergency Department Patients ? Psychiatric/Mental Health Patients. Lastly, CMS is not finalizing its proposal to extend the Notice of Participation (NOP) deadline and make corresponding changes to the CFR. 

Ambulatory Surgical Center Quality Reporting (ASCQR) Program

In the CY 2018 OPPS/ASC final rule, CMS is finalizing the addition of two measures of hospital events following specified surgical procedures to the ASCQR program measure set for the CY 2022 payment determinations and subsequent years. The measures finalized for addition are:

  • ASC-17: Hospital Visits after Orthopedic Ambulatory Surgical Center Procedures, which assesses all-cause, unplanned hospital visits within seven days of an orthopedic procedure performed at an ASC (beginning with the CY 2022 payment determination). For the purposes of this measure, “hospital visits” include emergency department visits, observation stays, and unplanned inpatient admissions.
  • ASC-18: Hospital Visits after Urology Ambulatory Surgical Center Procedures, which assesses all-cause, unplanned hospital visits occurring within seven days of the urology procedure performed at an ASC (beginning with the CY 2022 payment determination). For the purpose of this measure, “hospital visits” include emergency department visits, observation stays, and unplanned inpatient admissions.

The adoption of one measure proposed in the CY 2018 OPPS/ASC proposed rule, ASC-16: Toxic Anterior Segment Syndrome (TASS), is not being finalized. CMS is finalizing proposals to remove a total of three measures for the CY 2019 payment determination and subsequent years. These three measures being removed include:

  • ASC-5: Prophylactic Intravenous (IV) Antibiotic Timing, which assesses whether intravenous antibiotics given for prevention of surgical site infection were administered on time.
  • ASC-6: Safe Surgery Checklist Use, which is a structural measure of facility process that assesses whether an ASC employed a safe surgery checklist that covered each of the three critical perioperative periods (prior to administering anesthesia, prior to skin incision, and prior to patient leaving the operating room) for the entire data collection period.
  • ASC-7: ASC Facility Volume Data on Selected Procedures, which is a structural measure of facility capacity that collects surgical procedure volume data on six categories of procedures frequently performed in the ASC setting.

QualityNet

Additionally, CMS is finalizing its proposal to expand the CMS online data submission tool, QualityNet, to also allow for batch submission of ASCQR Program measure data beginning with data submitted during CY 2018, and make corresponding regulatory updates. Batch submission is submission of data for multiple facilities simultaneously using a single, electronic file containing data from multiple facilities submitted via one agent QualityNet account. Logistics on batch data submission will be included in the Specifications Manual. Lastly, CMS is finalizing a proposal to align the naming of the Extraordinary Circumstances Exceptions (ECE) policy and make corresponding regulatory updates to reflect this policy.

See the comeplete Final Rule on the Federal Register.

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Source(s): CMS Fact Sheet; Health Industry Washington Watch; Federal Register;

 

 

 

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