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CMS finalizes site neutral payment rule

Due to the opioid crisis, CMS is removing questions regarding pain communication from the hospital patient experience survey.

Susan Morse, Managing Editor

The Centers for Medicare and Medicaid Services has finalized site neutral payments in the hospital outpatient prospective payment system and ambulatory surgical center payment system rule.

CMS is using site neutral payments to level the playing field between what physician offices and hospital outpatient departments are paid for certain clinical visits. This change will be phased in over two years.

In addition, for 2019, CMS is expanding its 340B policy by extending the payment change to additional off-campus provider-based hospital outpatient departments that are paid under the physician fee schedule.

In 2018, CMS implemented a payment policy on drugs acquired through the 340B program that were administered at hospital outpatient departments. The program allows 340B hospitals to buy outpatient drugs at lower cost. The payment change in 2018 is saving beneficiaries an estimated $320 million in out-of-pocket payments, CMS said.


Clinic visits are the most common service billed under the outpatient prospective payment system.

Currently, CMS and beneficiaries often pay more for the same type of clinic visit in the hospital outpatient setting than in the physician office setting. This policy would result in lower copayments for beneficiaries and savings for the Medicare program in an estimated amount of $380 million for 2019, CMS said.

Hospital groups, particularly 340B providers that provide care for more vulnerable populations, have condemned the proposed rule saying it would reduce the rate paid to outpatient off-campus hospital clinics to 30 percent of their current reimbursement.

340B Health said Friday that is has already seen a negative impact from the 2018 cuts on patient care, with member hospitals reporting they've had to cut back on services, forgo hiring or layoff doctors, nurses, pharmacists and other staff.


For a clinic visit furnished in an excepted off-campus provider-based hospital department, the average beneficiary cost sharing is currently $23. Under this final rule, that cost sharing would be reduced to $16, based on a two year phase-in, saving beneficiaries an average of $7 each time they visit an off-campus department in 2019, according to CMS.


Additionally, CMS is increasing the services that can be furnished in an ambulatory surgical center.

For 2019, CMS is finalizing policies that will expand the number of surgical procedures payable at ASCs to include additional procedures that can safely be performed in that setting; ensure ASC payment for procedures involving certain high-cost devices generally parallels the payment amount provided to hospital outpatient departments for these devices; and ensure that ASCs remain competitive by addressing the differential between how ASC payment rates and hospital outpatient department payment rates are updated for inflation.

As part of the agency's patients over paperwork initiative, CMS is finalizing proposals to remove measures from the hospital outpatient quality reporting program and from the ambulatory surgery center quality reporting program. This action will decrease burden for providers by approximately $27 million over the next two years, CMS said.

Due to the opioid crisis, CMS is removing questions regarding pain communication from the hospital patient experience survey. Also, CMS is adopting a policy to encourage increased use of non-opioid drugs following a surgical procedure in the ASC setting.

Payment for drugs that function as a supply in surgical procedures or diagnostic tests is packaged under the OPPS and ASC payment systems.

However, in response to this recommendation as well as stakeholder comments and peer-reviewed evidence, for 2019, CMS is finalizing the proposal to pay separately at average sales price plus 6 percent for non-opioid pain management drugs that function as a supply when used in a covered surgical procedure performed in an ASC.


"President Trump is committed to strengthening Medicare and lowering costs for patients. Today's rule advances competition by creating a level playing field for providers so they can compete for patients on the basis of quality and care," said CMS Administrator Seema Verma. "The final policies remove unnecessary and inefficient payment differences so patients can have more affordable choices and options." 

"We are disappointed that CMS is continuing this misguided and damaging policy," said Maureen Testoni, interim president and CEO of 340B Health. "St. Mary-Corwin Hospital in Pueblo, Colorodo closed its surgical unit, reduced the size of its intensive care unit, and eliminated 300 jobs in the aftermath of the 2018 cut. Clifton Springs Hospital in Clifton, New York, reports it has been unable to fill pharmacy staff positions that would help patients with medication reconciliation. We continue to believe these regulations are in violation of both the Medicare statute and the law creating 340B and encourage Congress to reverse these cuts and restore stability to hospitals as quickly as possible."

Twitter: @SusanJMorse
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