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Second Opinion

Learn about policy issues important to medical schools and teaching hospitals, with Executive Vice President Atul Grover, M.D., Ph.D.

Washington Highlights

CMS Releases CY 2016 OPPS Proposed Rule

July 10, 2015—The Centers for Medicare and Medicaid Services (CMS) July 1 released the calendar year (CY) 2016 Outpatient Prospective Payment System (OPPS) proposed ruleupdating payment policies and rates for services furnished to Medicare beneficiaries in hospital outpatient departments (HOPD) and ambulatory surgical centers (ASCs) beginning Jan. 1, 2016. Comments on the rule are due by Aug. 31.

Among the most notable proposed changes includes a two percent reduction in the update CMS says is needed to redress excess packaged OPPS laboratory test payments that had continued to be paid separately in CY 2014. Other proposed changes include revisions to the two-midnight policy, recovery audit contractor (RAC) reforms, consolidation and reconstruction of the Ambulatory Payment Classification (APC) system, a new packaging policy, changes to the Chronic Care Management (CCM) payments, and the outpatient quality reporting (OQR) program.

The overall impact on major teaching hospitals is projected to be an average decrease of 0.3 percent, compared to a 0.1 percent decrease for minor teaching hospitals, and a 0.2 percent decrease for non-teaching hospitals.

The rule proposes to revise the two-midnight rule by adding an exception to allow Medicare Part A payments for inpatient admissions that span less than two-midnights on a case-by-case basis. The decision for the shorter stay would rely on the physician’s clinical judgment and would require the admitting physician to document support for the decision in the medical record. 

Review of these stays would be conducted by Quality Improvement Organizations (QIOs) rather than RACs, though CMS has not specified the process for such reviews. A recent agency forum indicated that while these short stays would be audited, not all would be targeted.

In addition, CMS proposes the following changes, effective with the next RAC contract award periods:

  • The “look-back period” will be six months from the date of service in cases where a hospital submits the claim within three months of the date it provides the service;
  • limits are placed on additional documentation requests that are based on a hospital’s compliance with Medicare rules;
  • complex reviews must be completed within 30 days or lose its contingency fee, even if an error is found; and
  • RACs must wait 30 days before sending a claim to Medicare audit contractors for adjustment to allow the provider to submit a discussion period request.

CMS further proposes to reorganize and consolidate many APCs, including those in nine clinical families, to conform to new data in medical practices, technologies, services, and other relevant factors.

To continue movement from fee-for-service (FFS) to a more prospective payment system, the rule proposes to modify the comprehensive-APC (C-APC) policy by adding nine new C-APCs, including some surgical APCs and a C-APC for comprehensive observation services to provide payment for all services received during a non-surgical encounter with a high level outpatient hospital visit and eight or more hours of observation.

CMS additionally proposes collecting data through a Healthcare Common Procedure Coding System (HCSPCS) modifier on all services reported on a separate claim, but related to a C-APC primary procedure to assess the costs of adjunctive services.

Beginning in CY 2015, CMS proposes to package conditionally more ancillary services, including certain minor procedures, pathology services, and drugs that function as supplies in a surgical procedure.

In regards to the OQR program, CMS proposes to remove a measure on the use of brain computed tomography in emergency departments due to inconsistencies in the current clinical guidelines. Starting CY 2018, CMS proposes the addition of a measure on use of radiotherapy for bone metastases and in CY 2019, a measure assessing hospital communication between different facilities. Both measures are endorsed by the National Quality Forum (NQF).

Contact:

Ivy Baer, J.D., M.P.H.
Senior Director and Regulatory Counsel
Telephone: 202-828-0499
Email: ibaer@aamc.org

Scott Wetzel, M.P.P.
Lead, Quality Reporting
Telephone: 202-828-0495
Email: swetzel@aamc.org

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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.


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For More Information

Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806
Email: jkleinman@aamc.org