WSHA Provides Hospital Specific Analyses of Recently Finalized Medicare Changes

December 12, 2018

WSHA recently sent a summary and hospital-specific analyses of the Final Outpatient Prospective Payment System rule to the Chief Financial Officer or designated finance person at each member hospital. The analysis includes:

  • The cut to off-campus hospital-based clinic services. CMS finalized a thirty percent cut to payment for excepted off-campus hospital-based clinic services for calendar year 2019, which will be doubled to sixty percent for calendar year 2020 and following. The change will cut payments to Washington hospitals for services to Medicare enrollees by an estimated $15 million for 2019, $30 million or more for 2020 and each succeeding year, an estimated $424 million over a ten-year period. The American Hospital Association and the American Academy of Medical Colleges filed a lawsuit to block the cut.

In addition, beginning 2019 CMS is extending the reduction in payment for 340B drugs to ASP -22% to non-excepted off-campus hospital sites. In 2018 CMS applied a similar reduction to excepted hospital sites. This policy, as well as the 2018 340B reduction, does not apply to critical access hospitals, rural sole community hospitals, children’s hospitals, or to PPS-exempt cancer hospitals. The analysis does not include the impact of the 2019 change as non-excepted sites are not necessarily paid as OPPS hospital services.

For Washington State Hospitals, aggregate outpatient PPS payments are expected to be roughly equal for calendar year 2019 compared to calendar year 2018, with modest marketbasket increases for hospitals largely offset by hospital clinic and 340B drug cuts to affected hospitals. (Andrew Busz,


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