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AAMC Comments on New Payment Rates for Nonexcepted HOPDs

January 6, 2017The AAMC Dec. 29 submitted a comment letter on the Centers for Medicare and Medicaid Services (CMS)’s 2017 Outpatient Prospective Payment System (OPPS) Interim Final Rule with Comment (IFC).

The final rule updated and changed payment policies and rates for items and services furnished to Medicare beneficiaries in hospital outpatient departments (HOPDs) and ambulatory surgical centers (ASCs) beginning Jan. 1, 2017 [see Washington Highlights, Nov. 4].

The AAMC’s comments primarily focused on CMS’s policy for new payment rates for nonexcepted off-campus provider-based departments (PBDs). Beginning on Jan. 1, hospital reimbursement is now based on newly established rates under the Medicare Physician Fee Schedule (MPFS) for nonexcepted items and services, which must be billed with a new claim line modifier “PN” to indicate that an item or service is a nonexcepted item or service.  For 2017, the payment rate for these items and services will generally be 50 percent of the OPPS rate.

In the letter, AAMC noted that it “appreciates that in response to serious concerns raised by stakeholders, CMS made significant changes to its original plan for an alternative payment system for nonexcepted off-campus provider-based departments.” However, the AAMC noted it “continues to be concerned” that the new payment system “will not adequately compensate hospitals and will result in rates that are insufficient to ensure access to care.” 

The AAMC added that “it is premature to finalize an alternative payment system for 2019 and beyond.” Instead, the AAMC urged CMS to conduct further analysis that includes sufficient claims data with the “PN” modifier to best determine future payment policies, in addition to soliciting comprehensive stakeholder feedback.


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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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Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806