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

Washington Highlights

CMS Issues CY 2018 OPPS Final Rule

November 3, 2017—The Centers for Medicare and Medicaid Services (CMS) Nov. 1 issued the Outpatient Prospective Payment System (OPPS) final rule with comment for calendar year (CY) 2018.  In the rule, CMS is finalizing the policy to dramatically reduce the payment rate for certain Medicare Part B drugs purchased by many hospitals through the 340B Drug Pricing Program.

In response to this decision, AAMC President and CEO Darrell G. Kirch Nov. 1 stated, “This decision will penalize safety net hospitals, leading to a reduction in critical services and programs that they provide to the nation’s most vulnerable patients.” He added, “We will pursue all options moving forward, including joining with the American Hospital Association and America’s Essential Hospitals in legal action to prevent this harmful cut from going into effect.”

Under the final rule, CMS will pay for separately payable, nonpass-through drugs and biologicals (other than vaccines) purchased through the 340B Program at the average sales price (ASP) minus 22.5 percent rather than the current reimbursement rate of ASP plus 6 percent beginning on Jan. 1, 2018. Rural sole community hospitals, PPS-exempt cancer hospitals, and children’s hospitals will be exempted from this policy for CY 2018.

Drugs not purchased under the 340B program will continue to be paid for at a rate of ASP plus 6 percent. CMS is implementing this policy in a budget neutral manner by offsetting the projected decrease in drug payments of $1.6 billion by redistributing an equal amount for non-drug items and services across the OPPS. CMS states it may revisit these policies for CY 2019.  Additionally, beginning Jan. 1, 2018, drugs acquired under the 340B Program or the Health Resources and Service Administration’s (HRSA) Prime Vendor Program (PVP) must be identified with a modifier. 

Other finalized changes for CY18 include:

  • Increasing the OPPS payment rates by 1.35 percent. The change is based on the hospital market basket increase of 2.7 percent minus both a 0.6 percentage point adjustment for multi-factor productivity and a 0.75 percentage point adjustment required by law;
  • Removing total knee arthroplasty (TKA) from the Inpatient Only list, as well as five other procedures. Recovery Audit Contractors will be precluded from reviewing outpatient TKA procedures for site of service for a period of 2 years;

  • Finalizing the proposal to conditionally package payment for low-cost drug administration services;

  • Delaying the mandatory implementation of the Consumer Assessment of Healthcare Providers and Systems Outpatient and Ambulatory Surgery Survey (OAS CAHPS) under the Hospital Outpatient Quality Reporting (OQR) Program beginning with the CY 2018 data collection;

  • Removing the following six measures from the Hospital OQR Program:

  • OP-21: Median Time to Pain Management for Long Bone Fracture. This measure is being finalized for removal beginning with the CY 2020 payment determination;

  • OP-26: Hospital Outpatient Volume Data on Selected Outpatient Surgical Procedures. This measure is being finalized for removal beginning with the CY 2020 payment determination;
  • OP-1: Median Time to Fibrinolysis. This measure was proposed to be removed beginning with the CY 2021 payment determination, but is being finalized for removal beginning with the CY 2020 payment determination in response to public comments requesting earlier removal;
  • OP-4: Aspirin at Arrival. This measure was proposed to be removed beginning with the CY 2021 payment determination, but is being finalized for removal beginning with the CY 2020 payment determination in response to public comments requesting earlier removal;
  • OP-20: Door to Diagnostic Evaluation by a Qualified Medical Professional. This measure was proposed to be removed beginning with the CY 2021 payment determination, but is being finalized for removal beginning with the CY 2020 payment determination in response to public comments requesting earlier removal; and
  • OP-25: Safe Surgery Checklist Use. This measure was proposed to be removed beginning with the CY 2021 payment determination, but is being finalized for removal beginning with the CY 2020 payment determination in response to public comments requesting earlier removal.

Contact:

Mary Mullaney
Director, Hospital Payment Policies
Telephone: 202-909-2084
Email: mmullaney@aamc.org

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For More Information

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