Provider-Based Update Nonexcepted Off -Campus Outpatient - - PowerPoint PPT Presentation

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Provider-Based Update

“Nonexcepted” Off-Campus Outpatient Provider-Based Departments Getting Paid in 2017 and Beyond

Presented by Donna A. O’Connor

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This presentation was prepared by Dykema Gossett for informational purposes and is not legal advice.

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A Story of Budget Compromises and IT Systems…

• Nov 2, 2015: Congress reached a budget deal by ending

hospital outpatient prospective payment system (“OPPS”) payments to new off-campus outpatient provider-based departments (“off-campus PBDs”)

• July 14, 2016: CMS proposed rule:

– Payment under OPPS dependent upon whether services and locations are “excepted” or “nonexcepted” – Excepted status lost with expanded services, relocations and, in some cases, acquisitions – Facility fee payments uncertain due to technical barriers

• Nov 2016: CMS to finalize rule
• Jan 1, 2017: OPPS payments end for new off-campus PBDs

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Provider-Based Basics: 50 Years of Little Guidance and Enforcement

Little FCA Enforcement

CMS Region Guidance and Enforcement Provider-Based Conditions of Payment 42 CFR 413.65

Hospital Conditions

• f Participation

42 CFR Part 482

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Provider-Based Basics: Hospitals Comply as a Single Entity

• Medicare requires that the entire hospital, including all its on
• r off campus locations, comply with the conditions of

participation and conditions of payment as one

• A single certified hospital with multiple locations must have
• ne medical staff, governing body, unified medical record,
• rganizational policies, nursing department and license
• Establish “oneness” with main provider
• Be separate from other providers
• Be a hospital 24/7

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Provider-Based Basics: Hospitals Follow the Money PBD Visit Physician Office Visit Facility Fee $40

Included in prof fee

Professional Fee $90 ($100-$10) $100 Total to Providers $130 $100 Patient Copay $26 ($18 + $8) $20 Billed To OPPS and PFS PFS Medicare Payment $104 $80

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Provider-Based Basics

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Provider-Based Basics

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Moving Toward Site Neutrality

MedPAC

Payment differences drive physician practice acquisitions by hospitals; 33% increase in hospital

• utpatient services
• ver 7 years

CMS

Seeking a better understanding of trend on Medicare payment and beneficiary cost- sharing

OIG

No evidence that provider-based designation delivers benefits that justify additional costs; eliminate provider- based designation

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Bipartisan Budget Act of 2015

• Off-campus PBDs not eligible for OPPS reimbursement
• Grandfathers off-campus PBDs that were billing for services

furnished prior to enactment on Nov 2, 2015

• Exception for emergency departments
• Permits payment under OPPS for non-grandfathered off-

campus PBDs, but only through Dec 31, 2016

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Bipartisan Budget Act of 2015

• “Department of a provider” means a facility created or acquired by a

main provider for the purpose of furnishing the same type of services as those provided by the main provider under the same name, ownership and financial/administrative control

• “Campus” means the physical area immediately adjacent to the

provider’s main buildings (or remote locations of hospitals), other areas and structures that are not strictly contiguous to the main buildings but are located within 250 yards of the main buildings, and any other areas determined on an individual case basis, by the CMS regional office, to be part of a provider’s campus

• Determinations of what constitutes an outpatient department of a

provider, long made by CMS regional offices, not subject to administrative or judicial review

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Bipartisan Budget Act of 2015

• Hospitals taken off guard
• Applies to all off-campus PBDs; not tailored to the concern of

increased costs associated with hospital acquisitions of physician practices

• Unfair to hospitals with off-campus PBDs ready to open or

under development

• Creates unfair competition
• Budget deal—difficult to reverse

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Bipartisan Budget Act of 2015

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Proposed Rule: Excepted and Nonexcepted Status

 Excepted off-campus PBD locations will be paid under OPPS (grandfathered under statute as billing for items and services furnished prior to enactment on Nov 2, 2015)  Nonexcepted off-campus PBD locations will be paid under an applicable fee schedule (not grandfathered under statute)  On-campus of hospital (within 250 yards of a hospital or remote location of a hospital) will be paid under OPPS

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Proposed Rule: Excepted and Nonexcepted Status

Excepted items and services, provided by excepted PBDs will continue to be paid under OPPS – Includes items and services furnished in a dedicated emergency department, whether or not emergency services, in either an excepted or nonexcepted

• ff-campus PBD location

– Includes items and services furnished in an excepted location, in same clinical family as existing items and services at the location; does not include items and services in a new clinical family at the location

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Proposed Rule: Excepted and Nonexcepted Status

Nonexcepted items and services will be paid under an applicable fee schedule – Includes items and services furnished in a nonexcepted location – Includes items and services in new clinical family in an excepted location

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Proposed Rule: Ex Excep cepted ted Off-Campus PBD

• OPPS payment for excepted items

and services, i.e., all items and services in clinical families furnished prior to Nov 2, 2015

• Expanding into new clinical families will

result in nonexcepted items and services paid under the applicable fee schedule

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Proposed Rule: Non Nonexcep cepted ted PBD

• OPPS payment for excepted

emergency department services

• All other services are

nonexcepted items and services paid under the applicable fee schedule

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Proposed Rule: Expanding Services

• Items and services not part of a clinical family of services

furnished by the excepted off-campus PBD on Nov 2, 2015, not payable under OPPS

• No limit on volume of existing services within a clinical family

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Proposed Rule: 19 Clinical Families

• Advanced Imaging
• Airway Endoscopy
• Blood Product Exchange
• Cardiac/Pulmonary Rehab
• Clinical Oncology
• Diagnostic tests
• ENT
• General Surgery
• Gastrointestinal
• Gynecology
• Minor Imaging
• Musculoskeletal Surgery
• Nervous System Procedures
• Ophthalmology
• Pathology
• Radiation Oncology
• Urology
• Vascular/Endovascular/

Cardiovascular

• Visits and related services

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Proposed Rule: Relocating Off-Campus PBDs

• Off-campus PBD that moves or relocates from the physical

address and suite number listed on the provider’s enrollment form as of Nov 1, 2015, becomes nonexcepted off-campus PBD furnishing nonexcepted items and services no longer payable under OPPS

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Proposed Rule: Change in Ownership

• Excepted status of off-campus PBD transfers upon sale only if
• wnership of main provider is also transferred and Medicare

provider agreement is accepted by the new owner

• If only the off-campus PBD sold, or if the provider agreement

is not accepted by the new owner, all excepted off-campus PBDs and excepted items and services furnished by the excepted off-campus PBD lose excepted status

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Proposed Rule: How Will Nonexcepted Items and Services be Paid in CY2017?

• Statute prohibits CMS from paying hospitals for nonexcepted

items and services under OPPS starting Jan 1, 2017

• CMS does not have a non-OPPS billing system that can pay

hospitals for nonexcepted items and services

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Proposed Rule: Applicable Payment Systems CY2017

Physicians bill for nonexcepted items and services under the PFS at the higher non-facility rate

• PFS leaves many gaps in billing and payment
• Diagnostic tests, incident to physician billing, Part B drug

billing, surgical services, observation services, partial hospitalization services

• Stark and Anti-Kickback Statute issues caused by higher PFS

non-facility rate payment to physicians not incurring facility costs

• Hospitals and physicians will need business arrangements

to address these issues

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Proposed Rule: Applicable Payment Systems CY2017

• Enroll as a freestanding facility or supplier and bill directly

– Physician Fee Schedule as a group practice – ASC Fee Schedule as an ambulatory surgical center – Clinical Laboratory Fee Schedule as an independent lab

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Proposed Rule: Nonexcepted Items and Services CY2018

• CMS proposes that it is necessary to create a new provider /

supplier type to bill under the PFS for nonexcepted items and services – Nonexcepted off-campus PBD still part of hospital and must meet all applicable conditions of participation and provider-based status; considered a nonhospital setting for payment purposes

• Statute permits CMS to chose any Part B payment system(s)
• r to create a new one to pay hospitals for nonexcepted items

and services

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Proposed Rule: Data Collection

• CMS cannot link a hospital’s enrollment data, which includes

all hospital practice locations, to claims processing information to identify items and services to a specific off- campus PBD

• CMS seeking public comment on the specific reporting

requirements for hospitals to identify excepted off-campus PBDs, the date the PBD started billing, and the clinical families of services that were provided prior to Nov 2, 2015

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Strategies

• Lobby Congress to make exception for off-campus PBD

locations that were in process of being planned or built

• Move inpatient beds to remote location of a hospital to create

another on-campus location (limited in Michigan by CON law)

• Expand services in emergency departments, which do not

have to be emergency services

• Expand within clinical families, e.g., “visits and related

services” clinical family

• Expand non-patient care areas into new space while

expanding services into suite as it existed prior to Nov 2, 2015

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Questions