2017 Outpatient Prospective Payment System

AAFP Savors Successes Achieved in Final OPPS Rule

November 28, 2016 11:38 am News Staff

Earlier this month, CMS finalized changes to Medicare's 2017 hospital outpatient prospective payment system (OPPS), as well as to the ambulatory surgical center payment system.

[Stethoscope on top of calculator]

The final rule, published in the Nov. 11 Federal Register,(www.gpo.gov) offered good news for family physicians in key areas where the AAFP had urged CMS to make modifications.

In a Nov. 1 press release,(www.cms.gov) CMS Deputy Administrator Sean Cavanaugh noted that the agency asked for comments and heeded the concerns of many groups -- including the AAFP -- that weighed in on the proposed rule.

"We spoke to stakeholders across the outpatient community who care about the quality and value of care patients receive," said Cavanaugh. "The policies finalized in today's rule will not only improve the value of care provided to Medicare beneficiaries, but are also responsive to health care providers who are crucial to outpatient care."

Electronic Health Record Incentive Programs

Story Highlights
  • CMS recently released the final rule covering the 2017 Medicare outpatient prospective payment system and the ambulatory surgical center payment system.
  • In a comment letter sent to CMS in August, the AAFP had expressed concerns about a number of issues covered by the agency's proposed rule.
  • CMS made adjustments in three key areas important to the AAFP in its final rule: the Medicare and Medicaid Electronic Health Record Incentive Programs, off-campus health care professionals, and the link between the Hospital Consumer Assessment of Healthcare Providers and Systems survey and Medicare payments to hospitals.

Three areas of particular concern in the proposed rule have garnered much of the AAFP's attention during the past few months. For instance, in an Aug. 24 letter(8 page PDF) to CMS Acting Administrator Andy Slavitt, (then) AAFP Board Chair Robert Wergin, M.D., of Milford, Neb., argued that meaningful use attesters needed flexibility and additional time to implement certified electronic health record (EHR) technology and institute the functionality required to succeed in new value-based payment models.

CMS agreed with the AAFP and others who commented and announced changes in the final rule that will increase flexibility for physicians, hospitals and critical-access hospitals that participate in the Medicare and Medicaid EHR Incentive programs.

Specifically, CMS eliminated objectives and measures related to clinical decision support and computerized order entry as of January 2017.

The final rule also will allow returning participants in the EHR incentive programs to report on an "any-90-day-reporting-period" schedule in 2016 and 2017. Additionally, CMS continues work on the application process for a "one-time significant hardship exception" to the Medicare EHR Incentive Program for certain eligible professionals in 2017 who also are transitioning to the Merit-based Incentive Payment System.

The press release noted that the changes are intended to reduce the reporting burden for physicians and focus on the use of health IT and the exchange of health information to support patient care.

Off-campus Health Care Professionals

Wergin also pointed out in his August letter to CMS that when a hospital buys a physician practice and integrates those services into a hospital department, the cost of that health care often increases.

"When a Medicare beneficiary receives services in an off-campus department of a hospital, the total payment amount for the services made by Medicare is generally higher than the total payment amount made by Medicare when the beneficiary receives those same services in a physician's office," he said.

Overall, Wergin noted, the AAFP supports "proposals that better align payment policies for physicians in independent practice with those owned by hospitals since these changes, if finalized, would lead to a more level economic playing field for independent practices while also being more equitable for Medicare patients."

Again, CMS made changes in the final rule that align with the AAFP's logic.

Essentially, the agency stated it was finalizing policies that would require certain items and services furnished by some off-campus hospital outpatient departments to no longer be paid under the OPPS as of Jan. 1, 2017.

In the press release, CMS acknowledged that Medicare currently pays for the same services at a higher rate when they are provided in a hospital outpatient department rather than in a physician's office.

"This payment differential has provided an incentive for hospitals to acquire physician offices in order to receive the higher rates," said CMS.

The agency noted it was issuing an interim final rule -- with comment period -- to reduce that incentive by establishing new payment rates under the Medicare physician fee schedule for items and services "provided by certain off-campus provider-based departments for 2017."

Pain Management

In his August letter, Wergin commended CMS for acknowledging physicians' discomfort with the linkage between the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey and Medicare payments to hospitals.

Wergin noted the AAFP's support for removing the survey's pain management questions from the hospital payment scoring calculation to avoid influencing prescribing practices.

In its press release, CMS said although it found no empirical evidence to show a prescribing effect, it was "finalizing the removal of the pain management dimension" of the survey to "eliminate any financial pressure clinicians may feel to overprescribe medications."

Related AAFP News Coverage
Medicare Hospital Outpatient Prospective Payment System
AAFP Urges Review, Rewrite of Portions of Proposed Rule


Additional Resource
CMS Fact Sheet: CMS Finalizes Hospital Outpatient Prospective Payment Changes for 2017(www.cms.gov)