United States: CMS Finalizes Medicare OPPS, ASC Rates And Policies For 2019

Last Updated: November 30 2018
Article by Gail Daubert and Debra A. McCurdy

The Centers for Medicare & Medicaid Services (CMS) has finalized Medicare Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) rates and policies for calendar year 2019. Notably, CMS adopted some – but not all – of its proposed policies intended to promote more "site-neutral payments" for different types of providers.

Hospital Outpatient Provisions

CMS adopted a 1.35% update to Medicare OPPS rates for 2019, with the update reduced by 2.0% for hospitals that fail to meet quality reporting requirements. Payment changes for individual procedures vary.

In the final rule, CMS reiterated its concern that "current payment incentives, rather than patient acuity or medical necessity, are affecting site-of-service decision-making." To that end, CMS adopted several policies intended to promote site neutrality, particularly with regard to off-campus hospital provider-based departments (PBD) that are "excepted" under section 603 of the Bipartisan Budget Act of 2015. Section 603 provides that effective January 1, 2017 certain off-campus PBDs are generally paid under the physician fee schedule (PFS), rather than the typically higher-paying OPPS, unless an exception applies. For 2019, CMS finalized policies to:

  • Reduce payment for clinic visit services (G0463, Hospital outpatient clinic visit for assessment and management of a patient) to a PFS-equivalent rate when provided at an "excepted" PBD. CMS notes that the clinic visit is the most common service billed under the OPPS, and by removing the "payment differential that may influence site-of-service decisionmaking, we anticipate an associated decrease in the volume of clinic visits provided in the excepted off-campus PBD setting." In response to comments, CMS is phasing in the payment reduction over two years, with the rate for HCPCS G0463 reduced by 30% for CY 2019 and reduced by 60% in 2020. In other words, these excepted PBDs will be paid approximately 70% of the OPPS rate for clinic visit services in CY 2019, which CMS expects will results in CY 2019 savings of about $380 million (including $80 million in savings to Medicare beneficiaries).
  • Apply to excepted PBDs a current policy that reduces OPPS payment for separately payable, nonpass-through drugs and biologicals (other than vaccines) purchased through the 340B drug discount program from average sales price (ASP) plus 6% to ASP minus 22.5% (with certain exceptions).

CMS did not adopt its proposal to revise payment when an excepted PBD expands into new lines of service, although CMS stated that it will monitor expansion of services in off-campus PBDs and, if appropriate, the agency may propose future rulemaking in this area. More broadly, CMS repeats its interest in future rulemaking "to systematically control for unnecessary increases in the volume of other hospital outpatient department services," while maintaining "beneficiary access to new innovations."

Other policies adopted in the final rule include the following:

  • CMS modified its device-intensive procedure criteria, including by lowering the device offset percentage threshold from 40% to 30% and extending device-intensive status to certain devices that do not remain in the patient's body after the conclusion of the procedure.
  • CMS increased the 2019 threshold for separate payment for certain outpatient drugs if the drug's cost-per-day exceeds $125, up from $120 in 2018. CMS also reduced the add-on for drug payment that is based on wholesale acquisition cost (WAC) from 6% to 3%.
  • CMS created three new comprehensive ambulatory payment classification (C-APCs), one for Level 3 ENT Procedures and two new C-APCs to describe Level 3 and 4 Vascular Procedures, raising the total number of C-APCs to 65. CMS also adopted its proposal to exclude from the C-APC packaging policy payment for procedures assigned to New Technology APCs.
  • CMS will maintain the high cost/low cost threshold policy for packaged skin substitutes for 2019, but the agency will consider alternative payment policies for the CY 2020 rulemaking.
  • The final rule updates Hospital Outpatient Quality Reporting Program requirements, including removal of quality measures as part of the Administration's efforts to focus on patient-centered outcomes measures and reduce the paperwork and reporting burden on providers.

ASC Provisions

The final rule increases ASC rates by 2.1% for ASCs that meet ASC Quality Reporting (ASCQR) Program requirements. In a significant change, CMS is basing its ASC update on the hospital market basket update – not the Consumer Price Index for All Urban Consumers (CPI-U). CMS believes providing ASCs with the same update as hospital outpatient departments "could encourage the migration of services from the hospital setting to the ASC setting and increase the presence of ASCs in health care markets or geographic areas where previously there were none or few, thus promoting better beneficiary access to care." The final ASC update reflects a hospital market basket percentage increase of 2.9% minus a 0.8 percentage point MFP. CMS estimates that using the CPI-U would have resulted in only a 1.8% update. CMS will apply the hospital market basket update to ASC payment system rates for an interim period of 5 years while it assesses the impact of this policy.

CMS added 17 procedures to the list of ASC covered surgical procedures for 2019, but did not adopt its policy to provide ongoing review of procedures recently added to the ASC covered procedure list. In addition, CMS updated ASCQR Program requirements; revised the criteria for ASC device-intensive procedures, and unpackaged the cost of non-opioid pain management drugs that function as surgical supplies, among other ASC policy changes.

Note: CMS will accept comments on APC assignments and status indicators for new or replacement Level II HCPCS codes until December 3, 2018.

This article is presented for informational purposes only and is not intended to constitute legal advice.

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
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
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