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The new CMS provider-based rules may significantly impact operational decision making.  As Murer previously reported, CMS issued its final OPPS rule last week, which contains provisions intended to implement “site neutral” reimbursement for certain off-campus provider-based locations.

One of the biggest changes promulgated by CMS is the new reimbursement structure for these non-except off-campus provider-based departments (i.e., those off-campus facilities not “grandfathered” under the Bipartisan Budget Act of 2015).  Although hospitals will continue to bill the “technical” or “facility” component on a CMS-1450 (UB-04), CMS created a new site of service identified by the “PN” modifier, which must be added to institutional claims from these locations.

Claims with this modifier will be paid under the Medicare Physician Fee Schedule (MPFS).  The claim will undergo the same OPPS process from an IT perspective, yet will receive a new payment rate.  This new rate is intended to reflect the “estimated relative resource costs” in furnishing services, and will incorporate packaging and billing rules unique to the hospital outpatient setting.

For CY2017, CMS states these new “technical” or “facility” component rates will generally be set at 50% of the OPPS payment rate for the same service.  CMS arrived at this 50% rate via analysis of data received through the “PO” tracking modifier, as well as pricing differentials between the ASC fee schedule and the OPPS.

Given this 50% general test, it seems likely that some services will continue to receive a positive reimbursement impact in the provider-based setting, whereas others may benefit from a freestanding venue.  Murer applied this general test to the evaluation & management of established patients CPT code set below, utilizing current CMS base rates.  The results show newly established or acquired HOPDs still benefit from provider-based status for this E&M code set, though results will likely vary by service:


 E&M Physician Office Traditional HOPD New HOPD
 99211 $  20.05 $ 111.43 $  60.37
 99212 $  43.68 $ 127.54 $  76.48
 99213 $  73.40 $ 153.68 $ 102.62
 99214 $ 108.13 $ 181.25 $ 130.19
 99215 $ 145.72 $ 214.19 $ 163.13

“Physician office” assumes “non-facility” rate per the MPFS. “Traditional HOPD” combines “facility” rate per the MPFS plus the OPPS rate for CPT G0463.  “New HOPD” combines “facility” rate per the MPFS plus 50% of OPPS rate for CPT G0463. 

CMS is requesting public comments on this new payment methodology through December 31, 2016.  CMS anticipates this system will be in place through at least CY2018, yet acknowledges its limitations.

Murer Consultants, Inc. specializes in provider reimbursement and revenue optimization, and is available to assist you in designing strategies to ensure maximum Medicare reimbursement in your off-campus outpatient locations.  Should you have any questions regarding this new reimbursement methodology, or would like to explore options by utilizing Murer’s feasibility services, please do not hesitate to contact us at (708) 478-7030.

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