On July 3, 2014, the Centers for Medicare and Medicaid Services (CMS) released proposed rules governing the outpatient prospective payment system (OPPS) and ambulatory surgery center payment system policy as well as the physician fee schedule (PFS). Both rules would be effective for calendar year 2015. CMS is accepting comments on the proposed rules through September 2, 2014.  This blog post outlines highlights of the proposed rules.

OPPS Rule

Payment Update. CMS proposes a net 2.1% market-basket increase for hospitals that meet hospital outpatient reporting requirements. The increase is based on a 2.7% market basket adjustment, less a proposed “mutifactor productivity adjustment” of 0.4% and less a 0.2% decrease mandated by the Affordable Care Act.

Comprehensive APCs. In its calendar year 2014 final payment rule, CMS created 29 comprehensive Ambulatory Payment Classifications (APC) to pay for high-cost device-dependent services using a single payment for the entire hospital stay. CMS delayed implementation of the policy until CY 2015 so that the agency and hospitals could evaluate the proposal. In its latest proposed rule, CMS states that it will implement the comprehensive APCs. The proposed rule creates several new comprehensive APCs and restructures some of the original items. The result is a total of 28 comprehensive APCs for CY 2015.

Packaged Items and Services. CMS proposes conditional “packaging” of ancillary services assigned to APCs if those services have a geometric mean cost of $100 or less. These ancillary services are primarily minor diagnostic tests, but may also include some therapeutic services. CMS would continue to pay for these packaged services if they are furnished separately. Exceptions to the package include preventive, psychiatry-related, and drug administration services.

Provider-Based Departments. Many hospitals have created provider-based departments under the Medicare provider-based billing rules. In its proposed rule, CMS notes the increase in hospital acquisitions of physician practices and the increase in the delivery of physicians’ services in a hospital setting. CMS proposes to collect information on the type and frequency of physician and outpatient hospital services furnished in off-campus provider-based departments. CMS proposes a new modifier that would be reported for physician and hospital services furnished in off-campus provider-based departments.

Physician Certification of Inpatient Services. CMS has previously required a physician certification of all inpatient hospital admissions. CMS based this requirement on its interpretation of Section 1814(a)(3) of the Social Security Act, which provides that Medicare Part A payments will be made for such services “which are furnished over a period of time, if a physician certifies that such services are required to be furnished on an inpatient basis”. While maintaining that its previous interpretation was reasonable, CMS proposes to require a physician certification only for inpatient admissions that last 20 days or more or admissions that are considered “outliers”. Certifications for long-stay cases must be made no later than 20 days into the stay. The certification must include: (1) the reasons for continued hospitalization for medical treatment or medically necessary diagnostic study or special or unusual services for cost outlier cases; (2) the estimated time the patient will need to remain in the hospital; and (3) the plans for post-hospital care, if appropriate.

PFS Rule

Payment Update. CMS’s proposed rule does not address the Sustainable Growth Rate (SGR). CMS notes that the SGR calculations are prescribed by statute. Unless Congress acts to change the SGR, CMS estimates that the SGR calculation will lead to a 20.9% reduction in PFS payments on April 1, 2015.

Telehealth Services.  CMS proposes increasing the number of services for which Medicare will pay. Added services are: annual wellness visits, psychoanalysis, psychotherapy, and prolonged evaluation and management services.

Sunshine Act. CMS’s “Open Payments” program implements the federal Sunshine Act, which requires annual reporting of financial relationships between drug and device manufacturers and certain healthcare providers. CMS proposes to eliminate the current “Continuing Education Exclusion”. CMS states that eliminating the exclusion for payments to speakers at continuing education events will create a more consistent reporting requirement.

Chronic Care Management. In 2014, CMS established a policy to make separate payments for non-face-to-face management services for patients with multiple (two or more) significant chronic conditions. In its latest proposed rules, CMS proposes payment rates for chronic care management services performed by physicians and qualified non-physician practitioners.