United States: Congress Considers Broader Hospital Site-Neutral Payment Exceptions and Other Payments Changes

Summary

New legislation would create broader exceptions under much maligned legislation enacted in 2015 that will equalize Medicare payments furnished in new off-campus outpatient facilities.

In Depth

The House Ways and Means Committee next week is expected to consider and approve the Helping Hospitals Improve Patient Care Act of 2016, legislation that would create broader exceptions under much maligned legislation enacted in 2015 that will equalize Medicare payments furnished in new outpatient facilities not on a hospital's campus beginning in 2017. The legislation, if enacted, would provide much needed and sought after relief for hospitals that were caught by surprise by the 2015 legislation. Although the future of the legislation is uncertain, hospitals affected by the 2015 legislation should consider taking steps now to protect potentially affected interests. Hospitals and other providers not affected by the 2015 legislation also should examine the bill because it proposes to make nearly a dozen other payment and regulatory changes that could be relevant.

Site-Neutral Payments for Off-Campus Provider-based Hospital Services

Section 603 of the Bipartisan Budget Act of 2015, enacted November 2, 2015, limits Medicare payments for items or services (other than services furnished by a dedicated emergency department) furnished at an off-campus outpatient department of a hospital, unless that location was billing as an outpatient department of a hospital prior to the date of enactment. Beginning January 1, 2017, Medicare will pay for such items and services under either the Medicare Physician Fee Schedule (MPFS) or Ambulatory Surgical Center (ASC) fee schedule, as applicable to the service provided, instead of under the Hospital Outpatient Prospective Payment System (OPPS). Payment rates under OPPS typically provide the hospital with a considerably higher payment amount than when services are paid under MPFS or the ASC fee schedule.

Almost immediately after that legislation was approved, hospitals besieged Congress with complaints about projects—some requiring substantial capital investment—that were already underway, and that were undertaken with the expectation of higher Medicare payments under the OPPS. Many of these hospitals complained that implementation of Section 603, as enacted, would disrupt long-standing plans and result in discontinued services.

The legislation that likely will be considered next week extends grandfather protection to some of these projects. Under the original legislation, a project would not be subject to the site-neutral payment policy if the hospital was billing Medicare for services furnished at that off-campus outpatient department location on or before November 2, 2015. Under the new bill, an off-campus outpatient department also could continue to be eligible for higher OPPS payments in 2017 if the host hospital submitted a voluntary provider-based attestation to the Centers for Medicare and Medicaid Services (CMS) pursuant to 42 C.F.R. § 413.65(b)(3) before December 2, 2015. Under guidance from CMS governing submission of provider-based attestations, for a hospital to have taken this step, the construction of the new off-campus outpatient department would have had to be complete and accepting or poised to accept patients.

While this new exception would affect only a few hospitals with complete projects that fell just short of the billing deadline, another exception may apply to more facilities. For services furnished on or after January 1, 2018, the proposed legislation would except from the site-neutral policy off-campus outpatient department locations that had a "binding written agreement with an outside unrelated party for the actual construction" of the new off-campus outpatient department before November 2, 2015. To be eligible under this alternative exception, the host hospital must also: (1) file a provider-based attestation for the new off-campus outpatient department before July 1, 2016; (2) submit a certification to CMS before July 1, 2016, that the hospital had a binding written construction agreement; and (3) add the off-campus outpatient department to the host hospital's Medicare enrollment form.

Whereas the narrower relief for off-campus outpatient departments with provider-based attestations filed before December 2, 2015 would be applicable only for 2017, the broader relief for off-campus outpatient departments with construction agreements in place as of November 2, 2015 (which would include hospitals eligible for the 2017 exception) would not be available until January 1, 2018. This means that hospitals able to take advantage of only the broader relief would not be eligible for OPPS payments during 2017, and would be subject to lower MPFS or ASC payments until January 1, 2018. The proposed legislation also would provide an exemption for off-campus outpatient departments of certain cancer hospitals that file provider-based attestations within 60 days of the date of enactment of the legislation (for departments meeting provider-based requirements between November 2, 2015 and the date of enactment) or within 60 days of the date of meeting provider-based requirements.

Notably, the legislation does not seek to provide CMS with further direction or clarification on other questions hospitals have raised about the original bill, such as how and whether the site-neutral payments would apply when a grandfathered off-campus department relocates or expands services, or undergoes a change in ownership. CMS is expected to publish proposed regulations to implement the original bill in coming weeks.

Of course, this relief will be available only if this legislation is approved by Congress and signed by the president. While approval by the House Ways and Means Committee is an important and notable step in that direction, it is but one step in a long, difficult process. Nonetheless, hospitals that were caught unaware and disadvantaged by the 2015 legislation, and that had a binding written agreement with an outside unrelated party for the actual construction of a facility before November 2, 2015, and that proceeded with the project, should consider whether to submit an attestation to the CMS pursuant to 42 C.F.R. § 413.65(b)(3) before July 1, 2016.

Additional Provisions

In addition to the proposed revisions to the Section 603 site-neutral payment policy, the legislation includes provisions that would make a variety of other important Medicare payment changes, including the following.

Rural Community Hospital Demonstration Program

The Rural Community Hospital Demonstration Program (RCH Demo) provides Medicare cost-based reimbursement to certain small rural hospitals that do not quality for cost-based reimbursement under the Critical Access Hospital designation. The legislation would extend the RCH Demo for an additional five years (through the end of calendar year 2021) and reopen the application process to hospitals in any state, but giving priority to hospitals in low population density states.

Long Term Care Hospital Moratorium and High Cost Outliers

The legislation would provide an exception to the current moratorium on new long term care hospitals (LTCHs) to allow for an expansion in the number of LTCHs beds at existing LTCHs and LTCH satellite facilities with expansion projects in place as of April 1, 2014. The legislation would also increase the cost threshold necessary for LTCHs to receive high cost outlier payments.

Hospital Inpatient Short-stays

Policymakers have in recent years wrestled with how to respond to an increased frequency of one-day inpatient admissions and extended observation stays in outpatient cases. This legislation takes an important step toward eliminating the financial incentives that drive these trends. Specifically, the legislation requires CMS to develop HCPCS codes (used to code outpatient services) associated with 10 surgical MS-DRGs that commonly have a one-day length of stay. While not stated expressly in the legislation, the purpose of establishing these HCPCS codes is to facilitate a crosswalk that will better connect inpatient and outpatient coding and payment systems for hospitals with the goal of identifying surgeries appropriate for site-neutral payment between inpatient and outpatient settings.

Ambulatory Surgical Centers and the Meaningful Use Program

Under the Medicare Meaningful Use program, physicians must conduct a threshold amount of patient encounters in settings with Certified Electronic Health Record Technology to meet program requirements. Patient encounters in the Ambulatory Surgical Center setting are included to determine whether the physician's threshold is met, but because ASCs were not included in the original Meaningful Use program, there is no CEHRT option available in the ASC setting. As such, in these instances, the physician adds to the denominator without adding to the numerator of the ratio. The ASC community has argued that this dynamic discourages physicians from furnishing Medicare cases in ASCs.

The legislation before the House Ways and Means Committee would prohibit CMS from penalizing physicians under the current Meaningful Use program or its equivalent under the new Merit-Based Incentive Payment System. This protection will be available to eligible professionals who furnish "substantially all" of their Medicare covered professional services in an ASC. The protection will be available until such time as CMS certifies an EHR system for ASCs.

Congress Considers Broader Hospital Site-Neutral Payment Exceptions and Other Payments Changes

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions