Experience. Integrity. Advocacy.
Experience. Integrity. Advocacy.

CMS Finalizes Site-Neutral Payment Changes in OPP


In the Center for Medicare and Medicaid Services’ (CMS) recently released final rule of the 2017 Outpatient Prospective Payment System (OPP), one of the most important — and most controversial — provisions was the implementation of Site-Neutral Payments for certain outpatient procedures.

The proposed rule sought to implement the Section 603 provisions of the Bipartisan Budget Act of 2015 regarding off-campus provider-based departments (PBDs) beginning January 1, 2017 by no longer paying a “facility” fee under the outpatient payment system and instead reimbursing physicians practicing in these settings entirely under the Medicare Physician Fee Schedule (MPFS) as “non-facility” services.

While the MPFS reimbursement for “non-facility” services is generally higher than services offered in a “facility,” the change means hospitals can no longer bill the additional charge for use of the room or other resources and will have to receive their portion of the reimbursement from the physician, unless the physician is employed by the hospital and the MPFS billing has been re-assigned to the hospital by the physician.

Off-campus PBDs that began billing under the OPPS on or after Nov. 2, 2015, will no longer be paid for most services under the OPPS and instead will be paid under the MPFS. Some exceptions do apply. The following will continue to be billed under the OPPS:

  • Items and services that were being furnished and billed by an off-campus PBD prior to November 2, 2015. (This does not mean specific services billed on dates of service prior to November 2, 2015; rather it is referring to the types of items and services that were being provided in an outpatient PBD on November 2, 2015, and continue to be provided and billed after that date.)
  • Items and services furnished in a hospital department within 250 yards of a remote location of the hospital.
  • Items and services that were being furnished and billed by recently-relocated off-site facilities that had to move because of “extraordinary circumstances,” which could include things like environmental issues such as being located on an earthquake fault line or a flood plain, having a lease expire, or becoming too small because of population shifts and increased patient loads. (The agency warns that these exceptions will be rare and unusual.)

Outpatient PBDs that were operating prior to November 2, 2015, may also have their services moved under the MPFS, however, under the following conditions:

  • if they expand the items and services offered and billed beyond those within the clinical families of services being offered and billed as of November 2, 2015;
  • if the outpatient PBD moves to a new physical location; or
  • if the outpatient PBD has a change of ownership and the new owners do not accept the existing Medicare provider agreement from the prior owner.

Or, to say it another way, outpatient PBDs operating prior to November 2, 2015, can continue to bill under the OPPS if they offer and bill the same items and services, if they remain in the same location, and if they do not change ownership, or if they do change ownership and the new owners accept the existing Medicare provider agreement.

This change follows the June recommendation by the Office of Inspector General that CMS eliminate the “provider-based facility” place of service designation because there is no reliable way to track or audit payments or potential overpayments.

According to a November 1, 2016, Modern Healthcare article about the final rule, “The CMS’ actuary has estimated that so-called site-neutral payments for ambulatory care, which Congress called for [in] a 2015 spending bill, would save Medicare about $500 million in 2017.”

For more information, review the CMS Fact Sheet, “CMS Finalizes Hospital Outpatient Prospective Payment System Changes to Better Support Hospitals and Physicians and Improve Patient Care.”

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Charity Singleton Craig

Charity Singleton Craig is a freelance writer and editor who provides communications and marketing services for CIPROMS. She is responsible for creating, editing, and managing all content, design, and interaction on the company website and social media channels in order to promote CIPROMS as a thought leader in healthcare billing and management.

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