CMS Finalizes Outpatient ‘Site Neutrality’ Rules

The Centers for Medicare and Medicaid Services (CMS) issued a new, massive set of final regulations November 2 which, it says, “removes unnecessary and inefficient payment differences between certain provider and supplier types so patients can have more affordable choices and options” starting January 1, 2019.

Behind the lofty language: hospital off-campus surgery centers will see a payment cut, sending an estimated $300 million per year in patient business to independent ambulatory surgery centers (ASCs).

The key provisions of the final rule are somewhat changed from those described in our report on the proposed rule (CMS Proposes to Slash Hospital Off-Campus Payments, Orthopedics This Week, September 19, 2018). Final changes include:

• Reimbursements overall under the outpatient prospective payment system (OPPS) will rise 1.35% (in the proposed rule it was 1.25%), and at ASCs, 2.1%.
• However, reimbursement parity is being phased in for office visits between off-campus hospital provider-based departments (PBDs) and ASCs; this is being done by capping PBDs’ OPPS payments at the rates in the Physician Fee Schedule (PFS), phased in over two years, 2019 and 2020. CMS is limiting OPPS payments to PBDs to 70% of the OPPS rate in calendar 2019, and to 40% of the OPPS rate in 2020.
• ASCs will have inflation adjusted in the same manner as off-campus hospital facilities, so that a payment gap shouldn’t develop in future years.
• There will be no change in the orthopedic procedures in the Covered Procedures List already allowed in ASCs. (Two spine procedures which were previously listed in the proposed rule, CPT Codes 0171T and 0172T, had been deleted in 2017 and were mistakenly on the list in the proposed rule, CMS said).
• ASC payment for procedures involving high-cost devices will generally parallel the payment amount provided to hospital outpatient departments for these devices.
• Nine quality reporting measures for both hospital outpatient departments and ASCs will be removed, one in calendar year 2019 and the others in 2020 and 2021.
• Pain questions will be removed from the hospital patient experience survey, on the theory that not asking patients about pain will reduce opioid abuse.
• Reimbursement for device-intensive procedures will change so that the device portion of a bundled payment triggers when the device offset is 30% of total cost, down from the prior 40%. That might have the effect of raising reimbursements for some device-intensive procedures.
• 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.” For now, “drugs” means one drug, Exparel (see separate report), but that might change

A CMS fact sheet gives more details; the full 1,182-page final rule is also available online.