CMS Releases CY2017 Proposed Outpatient Rulemaking: Implementing New Law for Hospital Place of Service

Each summer, around July 1, CMS releases hundreds of pages of proposed policy updates, separately for hospital outpatient services and for physician/laboratory services.

The hospital outpatient proposals are out.

• CMS press release, here (800 words).
• Nerdier CMS fact sheet, here (4500 words).
• Federal Register Publication, HERE.   (186 pp,  81 Fed Reg 45604-788).
• AHA News, here.
• MedCity News, here.

A few details below the break.

A key issue is the implementation of a pop-up law last winter, which will prevent hospitals from buying local physician office practices and then billing their services to CMS at on-facility hospital outpatient rates (BBA 2015 S. 603; my October blog here).  This is a "site neutrality" provision and had been discussed in newspapers and policy circles for at least five years.  The original lawmaking left open questions about implementation, regarding grandfathering, ownership changes, facility expansion, etc. 

CMS takes a pretty strict approach to the statutory November 2, 2015 grandfathering date.  Expanded services added after November 2, 2015, will not be grandfathered (at high hospital outpatient prices), but must be billed at lower PFS prices.   

There is an exception that the law doesn't apply to dedicated emergency centers.  CMS defines these broadly in other regulations (42 CFR 489.24(b)), including centers bearing signage that they are "urgent care" centers "without previously scheduled appointment."  To avoid a suburban physician office practice from simply allocated a tiny space under an "urgent care" sign and hoping all services in a multistory building will be grandfathered, CMS proposes that only services "provided in a dedicated emergency department" will get OPPS rates.   

Change of address nixes grandfather status.

CMS continues to expand its roster of "comprehensive" Ambulatory Payment Classifications, which are services for which no additional services can be stack-billed, everything is bundled.     

For the lab industry, for several years, all routine clinical chemistry tests have been bundled to other services, like hospital visits, with an exception for human genomic tests.  This exception where billing is still allowed will be extended to the Advanced Diagnostic Laboratory Test (ADLT) category.

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Bonus publication.
On the same day, CMS published a 28 page policy about use of Medicare data (including reuse and sales, etc) by qualified entities.  Here.