CMS rule proposes site neutral payments, extends 340B cuts
- CMS issued a proposed rule for the Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Centers (ASC) for 2019 that would institute site neutral payments and extend 340B payment cuts to previously exempt off-campus providers.
- The proposal would also remove a number of reporting requirements for OPPS and ASCs. CMS also issued a request for information (RFI) soliciting suggestions on how it can improve price transparency.
- The American Hospital Association and other industry groups pushed back swiftly on the plan for site neutral payments as well as further cuts to payments under the 340B program. The AHA accused CMS of showing "a lack of understanding about the reality in which hospitals and health systems operate daily to serve the needs of their communities."
The Trump administration is pitching injecting more competition into Medicare and other federal programs to cut costs. In a call with reporters, CMS Administrator Seema Verma said the existing payment rules do patients a disservice in varying by location for the same procedures.
CMS is proposing to increase OPPS payment rates by 1.25%, increase ASC payment rates by 2% and expand the number of procedures payable under OPPS at ASCs by revising the definition of "surgery" to include 12 procedures.
The agency estimates its plan for site neutral payments would save Medicare $610 million a year.
The procedure in question in this proposed rule is the clinic visit. By proposing applying Physician Fee Schedule (PFS)-equivalent payment rates for clinic visits to off-campus providers paid under OPPS, CMS is hoping to limit "unnecessary increases in the volume of covered hospital outpatient department services" while lowering co-pays and creating savings for Medicare.
The agency also backs more services performed in ASCs, which Verma said are paid about 55% of what a hospital outpatient department receives for the same service. CMS plans on studying the effects of this rule over the next five years.
"This will put all providers on a level playing field so CMS is not tipping the scale toward sites of care," Verma said.
In its PFS rule proposed earlier this month, CMS opted not to change payment differentials between services provided at outpatient facilities on and off hospital campuses, arguing that current rates encourage "fairer competition between hospitals and physician practices by promoting greater payment alignment between outpatient care settings."
AHA railed against the site-neutral policies in the PFS proposal and encouraged CMS to "improve its payment methodology to better account for the fact that the outpatient payment system includes many more services in its payment rates than the PFS."
AHA had even harsher words for CMS regarding this proposed rule, arguing the agency has "misconstrued Congressional intent" to provide off-campus clinics with the existing outpatient payment rate. The rule, AHA said, will instead "impede access to care for the most vulnerable patients."
"CMS also has resurrected a proposal, which it had previously deemed unwise, that would penalize hospital outpatient departments that expand the types of critical services they offer to their communities — preventing them from caring for the changing needs of their patients," AHA's statement reads. "We will urge the agency to revise these punitive policies so that hospitals can continue to provide the highest quality health care."
AHA also criticized the move to extend cuts to 340B. CMS has proposed paying the average sale price of outpatient drugs covered under the 340B drug pricing program minus 22.5% for non-excepted off-campus provider-based departments, a move that would effectively extend the cuts HHS made earlier this year to even more providers covered under 340B.
Advocacy organization 340B Health said in a statement that it is "deeply disappointed" in the proposal to expand payment reductions.
"Today’s proposal would threaten access to care for millions of patients who live with low incomes or in rural communities," the statement reads. A recent report from the Government Accountability Office found 62% of 340B hospitals are rural, 45% are critical access hospitals and 45% are general acute care hospitals.
Verma said these payment proposals, coupled with the RFI for price transparency suggestions, will help steer more providers toward value-based care while lowering costs. "Patients need both choice among providers and information about prices to drive toward value," she said.
AHA estimates the policies proposed would "appear to result in close to $1 billion in unwarranted cuts to hospitals."
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