The final payment rule for hospital outpatient department prospective payment system (OPPS) and ambulatory surgical centers (ASCs) for 2019 was released. The rule contains payment updates for hospital outpatient departments and ASCs as well as proposals related to pass-through payments and the 340B program.

Highlights include:

• A new policy to reduce payments for clinic visits taking place in off-campus provider-based departments to the Physician Fee Schedule (PFS) rate.
• An expansion of the new payment policy for physician-administered drugs purchased through the 340B discount program to average sales price (ASP) less 22.5%.
• A reduction in payment for newly-launched physician-administered drugs to 103% of wholesale acquisition cost (WAC).
• Two changes in response to the opioid crisis:
  • Separate payment for non-opioid pain management drugs in the ASC setting only; and
  • Removal of patient survey questions on pain communication from the hospital inpatient quality reporting program calculations.
• An increase in payments to ASCs in an attempt to encourage their use relative to hospital outpatient departments.

CMS Predicts Payment Increase of 0.6 Percent for Hospital Outpatient Departments

• The agency predicts that in 2019, total payments to hospital outpatient departments will increase by a modest 0.6%.
• While the increase is expected to be distributed relatively equally, for-profit hospitals are expected to see a payment increase of approximately 1%, versus a payment increase of 0.6% for non-profit facilities.
• Hospitals which fail to meet quality reporting requirements will continue to have their reimbursement decreased by 2 percent.

Site-Neutral Policy for Clinic Visits in Off-Campus Provider-Based Departments Finalized, American Hospital Association Announces Plans to Sue

• In order to encourage site-neutral payments across care sites, CMS is finalizing their proposal to pay off-campus provider-based departments (PBDs) at the Physician Fee Schedule rate for hospital outpatient clinic visits, which use HCPCS code G0463.
• The payment reduction will be phased in over two years and will not be implemented in a budget neutral manner.
• CMS estimated that this policy will reduce Medicare spending by $300 million in 2019, and Medicare beneficiary cost-sharing by an additional $80 million in 2019.
• The American Hospital Association has already announced plans to sue CMS in order to block implementation of the rule.

Additional Off-Campus Sites Subject to 340B Payment Reduction, Biosimilars Payment Corrected

• Non-excepted off-campus provider-based departments will be subject to the same payment methodology as hospital outpatient departments for 340B drugs, even if the facilities are paid under the Physician Fee Schedule (PFS) rather than OPPS.
• The new payment rate for drugs purchased with a 340B discount will be average sales price (ASP), less 22.5% (77.5% of ASP), rather than 106% of ASP.
• This policy change was made in response to comments from external stakeholders that the different reimbursement amounts for excepted and non-excepted departments could incentivize shifting drug administration services of 340B drugs to non-excepted facilities.
• Rural sole community hospitals, children’s hospitals and PPS-exempt cancer hospitals will be excepted from this payment adjustment.
• CMS estimates that this policy change will reduce payments for these drugs by $49 million in 2019.
• CMS is also finalizing the proposal to set payment for non-pass through biosimilars acquired through the 340B program at ASP less 22.5% of the biosimilar’s price, instead of ASP less 22.5% of the reference product’s price.

Payment for Newly-Launched Drugs Lowered to 103% of Wholesale Acquisition Cost (WAC)

• Similar to the new policy under the Physician Fee Schedule (PFS), hospital outpatient departments will also be paid 103% of WAC for physician-administered drugs that do not have an average sales price (ASP).
• Once a drug has an average sales price (ASP) calculated and reported, payment levels will revert to 106% of ASP.

Packaging Threshold to be Increased to $125 for CY 2019

• The drug packaging threshold will be $125 for CY 2019, an increase of $5 from the CY 2018 level.
• Drugs with a per-day cost that is less than or equal to $125 are packaged; items above this are separately payable at 103% of WAC, 106% of ASP or ASP minus 22.5% for 340B drugs.

Pass-Through Status Continuation Finalized for 49 Drugs

• CMS will continue pass-through status for 45 drugs and biologicals.
• Three additional drugs and biologicals that already have had 3 years of pass-through will be extended by an additional two years as required by statute.
• A fourth, Puraply, will have its HCPCS code (Q4172) expire in 2019 but CMS will extend pass-through payment on two of its three successor codes (Q4195 and Q4196).
• Pass-through status will expire for 23 drugs and biologicals on December 31, 2018.
• For 2019, CMS is will continue paying ASP plus 6 percent for pass-through drugs and biologicals.

Non-Opioid Pain Management Products Will be Separately Payable in Ambulatory Surgical Centers

• In line with a recommendation from the President’s Commission on Combating Drug Addiction and the Opioid Crisis, CMS will pay separately for non-opioid pain management treatments when they are used by ambulatory surgical centers (ASCs).
• This policy will not apply to hospital outpatient departments, where the products will continue to be packaged in with the payment for the procedure itself.
• Typically, these products are considered a “supply” and are not paid separately; this dynamic can discourage the use of the more expensive non-opioid products in favor of less expensive opioid treatments.
• Prior to finalizing the proposal, CMS performed a data analysis examining utilization of the one available non-opioid pain management product and found that in ASCs, utilization of the product declined once it was no longer eligible for pass-through status. A similar decline was not seen in the hospital outpatient department, leading CMS to limit the policy change only to ASCs.

Only One New Device Approved for Pass-Through Payment

• This year, CMS received seven applications for pass-through status and is approving only one:
  • remedē system transvenous neurostimulator: Approved for pass-through status
• The following applications were not approved:
  • AquaBeam system for the resection and removal of prostate tissue in males suffering from lower urinary tract symptoms (LUTS) due to benign prostatic hyperplasia (BPH)
    • CMS does not believe that this device is surgically implanted or inserted
  • BioBag larval debridement therapy in a contained dressing
    • Does not meet the substantial clinical improvement criterion
  • BlastX antimicrobial wound gel
    • Not an eligible device
  • EpiCord skin substitute
    • Does not meet the substantial clinical improvement criterion
  • Restrata wound matrix
    • Dressings are considered to be a supply and not a device, and therefore Restrata is not eligible for pass-through
  • SpaceOAR polyethylene glycol hydrogel spacer
    • Does not meet the substantial clinical improvement criterion

Device-Intensive Criteria Broadened in Order to Include More Codes

• CMS will expand its definition of device-intensive procedures to include surgically-implanted single-use devices, whether or not they remain in the patient after the surgery.
• Additionally, CMS is finalizing its proposal to lower the device offset threshold to 30 percent, from 40 percent, to allow more procedures to qualify as device-intensive.
• Until claims data are available, new HCPCS codes will be assigned a 31 percent device offset.

Three New C-APCs and New Methodology for Extremely Low-Volume New Technology APCs Finalized

• CMS finalized three new comprehensive APCs (C-APC) that include primary, comprehensive services typically reported with other ancillary services:
  • C-APC 5163 (Level 3 ENT Procedures);
  • C-APC 5183 (Level 3 Vascular Procedures); and
  • C-APC 5184 (Level 4 Vascular Procedures)
• A new “Smoothing Methodology” for pricing extremely low-volume procedures (which CMS defines as fewer than 100 claims a year under the hospital outpatient payment system) was also finalized.
• Under this new methodology, CMS will use up to 4 years of claims data to set a payment amount for both assigning the service to a New Technology APC but also for assigning the service to a regular APC once it is no longer included in the New Technology APC.
• Services designated as New Technology APCs will be excluded from bunding into C-APC procedures.

 

CMS Finalizes Changes to Outpatient Quality Reporting Program Aiming to Streamline Hospital Quality Reporting, Enhance Provider Participation

 

• Starting in 2020 and subsequent years, the Notice of Participation (NOP) form and OP-27: Influenza Vaccination Coverage Among Healthcare Personal will be removed from the outpatient quality reporting program.
• The reporting period for OP-32: Facility Seven-Day Risk-Standardized Hospital Visit Rate about Outpatient Colonoscopy measure was increased from 1 to 3 years.
• Starting in 2021 and subsequent years, a total of seven measures will be removed.
• No new measures were proposed or finalized.
• CMS also announced plans to change the frequency of the Hospital OQR Program Specifications Manual release beginning with CY 2019. The manual maintains the technical specifications for the measures.
• Rather than require its release every 6 months, the release would occur every 12 months; this is different from their initial proposal of every 6 to 12 months.
• It is hoped that fewer releases per calendar year would reduce confusion on technical requirements for participants.

Changes Finalized for Inpatient Quality Reporting (IQR) HCAHPS Survey in Response to Opioid Over-Prescription and Feedback from Stakeholders

• Questions on the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) related to pain communication will no longer be included in a facility’s quality rating in response to the opioid crisis.
• Stakeholders had requested the change because of the belief that the presence of the questions encouraged providers to prescribe opioids in excess of standards of care.
• The questions will be removed for discharges on or after October 1, 2019 and will impact payment in FY 2021.
• Additionally, CMS will not publicly report the three revised Communication about Pain questions.

‘Inpatient Only List’ Updated with Removal of Four Procedures and Addition of One

• CMS finalized the following changes to the Inpatient Only (IPO) list for CY 2019:
  • Removal of CPT code 31241 – nasal/sinus endoscopy, surgical; with ligation of sphenopalatine artery;
  • Removal of CPT code 01402- anesthesia for open or surgical arthroscopic procedures on knee joint; total knee arthroplasty;
  • Removal of CPT code 0266T – Implantation or replacement of carotid sinus baroreflux activation device; total system;
  • Removal of CPT code 00670 – Anesthesia for extensive spine and spinal cord procedures;
  • Addition of HCPCS code C9606- percutaneous transluminal revascularization of acute total/subtotal occlusion during acute myocardial infarction, coronary artery or coronary artery bypass graft

CMS Estimates Increase of 2.1% in Payment for Ambulatory Surgical Centers Due to Use of Hospital Market Basket Update

• CMS is estimating an increase of 2.1% in payment for ambulatory surgical centers (ASCs) in 2019.
• This is a higher increase than the estimated increase included in the proposed rule, which was 1.3%.
• The increase is due to the decision to use the hospital market basket update when determining payment rates for ASCs.
• CMS believes that the proposal will allow services that are often performed in the hospital outpatient setting to migrate to the ASC setting, increasing beneficiary choice and possible savings.