CMS final rules: Highlights for hospitals and Rural Health Clinics

November 9, 2017

The Centers for Medicare and Medicaid Services recently finalized two sets of rules which will have significant impacts to hospitals. WSHA is preparing full analyses of the outpatient final rule with estimates of facility-specific impact and will provide these to the CFO or other designated staff for member hospitals. Here are the highlights from the rule:

  • WSHA and the American Hospital Association opposed 340B cuts. In its final 2018 Outpatient Prospective Payment and ASC Rule, CMS reduced Medicare payments for outpatient drugs provided by 340B hospitals from the current rate of average sales price plus 6 percent to average sales price minus 22. The reduction does not apply to critical access hospitals, sole community hospitals, PPS-exempt cancer hospitals, and children’s hospitals. WSHA, the American Hospital Association strongly opposed the cuts with CMS and through our congressional members, citing concerns about the impact on the ability of hospitals to expand access to needed services.
  • Physician supervision moratorium extended. The final rule extended the moratorium on enforcement of direct supervision requirements for outpatient therapeutic services at small rural hospitals through 2019.
  • Non-grandfathered off-campus hospital clinic cut. In its final 2018 Medicare Physician Fee Schedule rule, CMS reduced payment for nonexcepted services, that is off-campus hospital locations that were not billing under outpatient prospective payment as of November 2, 2015. For 2018, nonexcepted services and locations will be paid at 40 percent of the regular OPPS rate, a reduction from the 50 percent rates in 2017. The reduction in payment is better than the reduction to 25 percent contained in the proposed rule.

Behavioral health integration codes for RHCs established. The  2018 Physician rule finalized increases to Rural Health Clinic payment codes and new codes for care coordination services and the psychiatric collaborative care model. WSHA supported these changes and believes that the proposed payment outside of the encounter calculation will greatly enhance the sustainability and access to mental health services in rural communities and enhance behavioral health integration.  (Andrew Busz,


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