United States: Back To School Rules Recap: Hospital And Physician Cheat Sheet On What CMS Did This Summer

Summer was no vacation for the Centers for Medicare & Medicaid Services (CMS). The agency released a series of significant rules that signal the nature and pace of CMS Medicare payment and policy changes for hospitals and physicians under the Trump administration. For anyone who did take a vacation, this article provides a rulemaking cheat sheet, providing links to the rules you may have missed and highlighting a few of the notable provisions in this CMS guidance. Comments are due soon on a number of the proposed rules, and final rules are expected this fall.

Cancellation of New Mandatory Cardiac and Orthopedic Bundles and Changes to the CCJR Payment Model

On August 17, 2017, CMS published its proposal to cancel the Episode Payment Models and Cardiac Rehabilitation incentive payment models finalized in the waning days of the Obama administration's CMS. Originally set to become effective this summer, these models were twice delayed after Tom Price took over as Secretary of the U.S. Department of Health and Human Services (DHHS). The proposed rule would also change the Comprehensive Care for Joint Replacement Model (CJR) by roughly cutting its geographic areas in half and making participation voluntary for low-volume and rural hospitals in the 33 remaining areas. CMS cited concern with the mandatory nature of the models and noted that it expects to continue to offer providers opportunities to participate in voluntary initiatives, including episode-based payment models. This change would impact the ability of affected physicians to qualify for the Advanced APM track of the QPP, described below.

CMS will accept comments on this proposed rule until October 16.

FY 2018 Inpatient Prospective Payment System Final Rule

The IPPS final rule, published August 14, 2017, addressed the ongoing operational requirements for the Hospital Inpatient Quality Reporting Program, Hospital Value-Based Purchasing Program (VBP), Hospital Readmissions Reduction Program (RRP), Hospital Acquired Conditions Reduction Program (HAC) and Medicare EHR Incentive Program (MU). There were no significant surprises with respect to the finalized proposals for these programs, except that CMS signaled its intent to incorporate a methodology that considers social risk factors as part of the various CMS quality programs. CMS discussed looking at variables such as income, education, race and ethnicity, employment, disability, community resources, and social support to determine the impact on measured performance and overall quality data reported. Public comment was generally supportive of this approach; however, CMS did not commit to a finalized policy in the final rule.

CMS did not finalize a less popular proposal that would have required a CMS-approved accrediting organization to post all final accreditation survey reports and acceptable plans of correction on their publicly accessible websites. Though CMS believed that the proposal would foster transparency, CMS withdrew the provision altogether without discussing stakeholder comments and only stating that it "may appear as if CMS was attempting to circumvent" the Social Security Act. CMS also finalized a proposal to eliminate the term "newspaper" from the required forms of public notice for the Medicare termination of Ambulatory Surgical Centers, Federally Qualified Health Centers, Rural Health Centers and Organ Procurement Organizations.

CY 2018 Hospital OPPS/ASC Proposed Rule

On July 13, 2017, CMS released the calendar year (CY) 2018 Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs proposed rule (OPPS/ASC Rule).

The OPPS/ASC rule introduced some positives, including a 1.75 percent increase to outpatient hospital prospective payment rates. And after years of discussion at CMS and innovations in total knee arthroplasty (TKA) procedures, the OPPS/ASC rule proposes to remove TKA from the inpatient-only list and add it to the ASC procedures list. CMS is soliciting comments on whether to make the same change for partial and total hip procedures. CMS has previously cited impacts on the CJR and Bundled Payments for Care Improvements Models in rules declining to move TKA to the outpatient setting, so this proposal is consistent with CMS's change in approach to bundled payment models.

But the OPPS/ASC rule outlined changes that could have major negative ramifications for hospitals. If the proposed rule is finalized, there would be significant payment reductions for the 340B Drug Pricing Program. While hospitals have been reimbursed traditionally for 340B drugs at an average manufacturer sales price plus six percent, under CMS's proposal, hospitals would only receive payment at the rate of the average manufacturer sales price minus 22.5 percent. Although CMS noted that it was open to comment on the "appropriate" rate, a significant reduction in 340B drug payments could be a hard pill to swallow for participating hospitals.

Finally, while CMS will not finalize a proposal implementing the site-neutral payment policies of Section 603 of the Bipartisan Budget Act of 2015 that would have restricted hospitals' expansion of services at those excepted hospital departments not subject to the payment adjustments, the agency is still focused on reducing payment rates and differentials, including through its companion Part B rulemaking.
CMS will accept comments on the OPPS/ASC proposed rule until September 11.

CY 2018 Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B

Published on the same day as the OPPS rule, the CY 2018 Physician Fee Schedule rule hits some high and low notes. On a high note, CMS continues to slowly phase in the requirement that Medicare claims for advanced diagnostic imaging include information about the appropriate use criteria. Under the current proposals, providers will be required to include these criteria on claims starting in January 2019. CMS is considering additional chronic care management and telehealth services codes, and the agency seeks comments on whether it should delete the requirement for reporting the telehealth modifier for professional claims.

On a low note, CMS proposes that hospitals will receive 25 percent, rather than the previously established 50 percent, of the applicable OPPS payment rate for services furnished in non-excepted off campus hospital departments beginning in CY 2018. Stakeholders, including the American Hospital Association, strongly object to the rate of reduction for CY 2018. As part of its proposal, CMS requested public comment regarding whether a higher rate, such as 40 percent, might be more acceptable during the transition. CMS also restated its decision not to finalize a policy that restricted the expansion of service lines at off-campus provider-based departments in the CY 2018 OPPS/ASC rule. However, CMS stated that it will continue monitoring the data for changes in billing patterns and utilization.

CMS will accept comments on this Part B proposed rule until September 11.

CY 2018 Updates to the Quality Payment Program

On June 30, 2017, CMS issued another Part B rule, the much anticipated CY 2018 Updates to the Quality Payment Program (QPP), which outlines proposed payment and policy changes to the QPP created by the Medicare Access and Chip Reauthorization Act of 2015 (MACRA). The QPP rule signals CMS's intent to reduce the pace and burdens of MACRA implementation.

The QPP rule includes key changes impacting both of its tracks: (1) the default Merit-based Incentive Payment System (MIPS) path, which includes upward or downward payment adjustments based on scores in four performance categories, and (2) the Advanced Alternative Payment Model (Advanced APM) path for clinicians who meet the criteria of a Qualifying APM Participant (QP) in an Advanced APM. It also provides detail on new policies that become effective in and after Year 2 of the QPP. We took a deeper dive into the QPP rule this summer through our blog but a few key highlights include:

  • Excluding more clinicians from MIPS by increasing the low-volume threshold.
  • Implementing the virtual group provision of MACRA to allow solo practitioners and groups of 10 or fewer clinicians to combine resources and participate in MIPS as a group.
  • Implementing an option for facility-based clinicians to use their institution's performance in value-based programs to assess performance in the quality and cost performance categories of MIPS.
  • Allowing flexibility in reporting, providing opportunities for additional bonus points and delaying weighting of the cost performance category of MIPS.
  • Extending, through performance year 2020, the revenue-based nominal risk standard for an alternative payment model to qualify as an Advanced APM, which is eight percent of the average estimated Parts A and B revenues, and lessening certain Advanced APM pathway requirements for participants in medical homes and the Comprehensive Primary Care Plus Model.
  • Updating policies that will apply to the All-Payer Combination Option, which will allow QP status to be determined based on participation both in the current Medicare Part B Advanced APMs and in other alternative payment models that meet the criteria to be an Advanced APM. CMS invites comments on the challenges it recognizes will be involved with this option, which will be limited only to Medicaid, Medicare Advantage and CMMI multi-payer models in performance year 2019.

The comment period on the QPP rule closed August 21.

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.

Similar Articles
Relevancy Powered by MondaqAI
Sheppard Mullin Richter & Hampton
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Sheppard Mullin Richter & Hampton
Related Articles
Related Video
Up-coming Events Search
Font Size:
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
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
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.


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.


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