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CMS Issues Proposed Rule for Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System

CMS Issues Proposed Rule for Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System

The Centers for Medicare and Medicaid Services (CMS) is proposing updated payment rates and policy changes in the Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System. According to CMS, several of the proposed policy changes would improve the quality of care Medicare patients receive by better supporting their physicians and other health care providers.

Some of the elements of the proposed rule include:

  • Addressing Physicians’ Concerns Regarding Pain Management: The proposed rule would address physicians’ and other health care providers’ concerns that patient survey questions about pain management in the Hospital Value-Based Purchasing program unduly influence prescribing practices. While there is no empirical evidence of this effect, CMS is proposing to remove the pain management dimension from the Hospital Value-Based Purchasing program to eliminate any potential financial pressure clinicians may feel to overprescribe pain medications.
  • Focusing Payments on Patients Rather than Setting: CMS is proposing policies to implement section 603 of the Bipartisan Budget Act of 2015, which provides that certain items and services provided by certain hospital off-campus outpatient departments would no longer be paid under the OPPS. Currently, Medicare pays for the same services at a higher rate if those services are provided in a hospital outpatient department, rather than a physician’s office. This payment differential has encouraged hospitals to acquire physician offices in order to receive the higher rates. This acquisition trend and difference in payment has been highlighted as a long-standing issue of concern by Congress, MedPAC, and the Department of Health and Human Services Office of Inspector General. This difference in payment also increases costs for the Medicare program and raises the cost-sharing liability for beneficiaries.  CMS believes these proposed policies will help to ensure that Medicare beneficiaries – and the Medicare program – do not pay more for care simply because of the setting in which that care was received.
  •  Improving Patient Care through Technology: CMS is supporting physicians and other providers by proposing increased flexibility for hospitals and critical access hospitals that participate in the Medicare electronic health records (EHR) Incentive Program. Changes include a proposal for clinicians, hospitals, and critical access hospitals to use a 90-day EHR reporting period in 2016 – down from a full calendar year for returning participants.
  • Emphasizing Health Outcomes that Matter to the Patient: CMS is proposing to add new quality measures to the Hospital Outpatient Quality Reporting Program and the Ambulatory Surgical Center Quality Reporting Program that are focused on improving patient outcomes and experience of care.

CMS estimates that the updates in the proposed rule would increase OPPS payments by 1.6 percent and ASC payments by 1.2 percent in 2017.

Comments on the proposed rule will be accepted through September 6, 2016.

Additional Information

CMS Proposes Hospital Outpatient Prospective Payment Changes for 2017


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