WSHA to Comment on Proposed Medicare Outpatient Prospective Payment and Physician Fee Schedule Rules

September 5, 2018

The Centers for Medicare and Medicaid Services (CMS) recently released two proposed rules that, if adopted, will significantly impact payment for office visit services. The comment deadlines are quickly approaching and WSHA will be commenting on both the Outpatient Prospective Payment System (OPPS) proposed rule and the Physician Fee Schedule (PFS) proposed rule. A few weeks ago, WSHA sent to Chief Financial Officers and designated finance staff detailed analyses of the OPPS proposed rule, which includes impact estimates of some of the proposed changes detailed below.

Comments on the Outpatient Prospective Payment System Proposed Rule are due September 24. Before WSHA submits a letter opposing the drastic reductions in payment, we are interested in knowing how the proposed changes will affect the provision of services in your community. We also urge hospitals to comment and tell your story about these cuts. The American Hospital Association estimates the proposed change will result in a reduction of about $30 million in payment to Washington hospitals for 2019, and $439 million over a ten-year period. These numbers do not include the effect of other provisions that would also reduce payment for any new services provided at existing off-campus sites and provisions that would extend the existing 340B payment reduction to additional hospital sites

CMS proposes, effective January 1, 2019, a 60 percent payment reduction to the OPPS payment for evaluation and management services provided at all off-campus hospital-based locations.  In January 2017, based on direction from Congress, CMS applied a site-neutral reduction limited to new off-campus hospital sites that were not already operating and billing as hospital-based locations as of November 2, 2015. The proposed rule applies a similar reduction to E&M services at all off-campus hospital-based sites, regardless of how long they have been provided and billed as hospital-based services.

Comments on the Physician Fee Schedule proposed rule are due September 10. CMS proposes to collapse the number of CPT codes for evaluation and management (E&M) services (CPT codes 99201-99215) from the current ten codes with separate allowed amounts to only two codes and allowed amounts.  Of the two codes, one would be for E&M services to new patients and another for existing patients. CMS proposes a reduction in documentation requirements to accompany the coding and payment change. WSHA plans to communicate in our comment letter our concerns that the proposed methodology could reduce payment to providers that serve more complex patients and provide comprehensive medical home services to patients with chronic needs. The proposed rule includes add-on codes for additional time, but it is unclear how these would be used and to what degree they would offset the reduction in payment for complex patients. We are concerned the proposed reduction in payment could reduce access to care for the most vulnerable patients. WSHA plans to recommend that CMS delay and do additional study before making change of this magnitude. (Andrew Busz,


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