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Exempt or not, off campus PBDs may see big pay cuts next year

CMS has provider-based hospital departments – many of which are part of hospital-owned physician practices – in its sights for reimbursement cuts in two areas.

If your practice operates an off-campus provider-based department (PBD), be prepared for possible Medicare fee cuts in 2019. CMS announced the proposed changes July 25 in the proposed 2019 hospital outpatient prospective payment system (OPPS) rule.

CMS has these PBDs – many of which are part of hospital-owned physician practices – in its sights for reimbursement cuts in two areas:

1. Reimbursement for code G0463 (Hospital outpatient clinic visit for assessment and management of a patient) would be reduced from about $116 to to $46 when billed by exempt PBDs, which are paid under the OPPS rule. The reduction, which would bring clinic visit payments in line with physician office visit reimbursement, is part of a CMS push for “site-neutral payment,” the agency stated.

2. 340B Drug payment cuts would be expanded to apply to non-exempt PBDs. The policy would require Medicare to reimburse at the average sales price (ASP) minus 22.5%. That pay rate is already in place for both on- and off-campus hospital outpatient centers paid under the OPPS rule, but the cut did not apply to non-exempt centers, which are paid under the physician fee schedule. CMS is proposing that next year it will also apply to them.

CMS last year began paying certain non-exempt PBD facility fees from the Medicare physician fee schedule instead of the OPPS, under a requirement from the Balanced Budget Act of 2015.

Section 603 of that law was “intended to eliminate the Medicare payment incentive for hospitals to purchase physician offices, convert them to off-campus PBDs and bill under the OPPS for items and services they furnish there,” the agency has stated.

However, some PBDs are exempt from that requirement, and continue to be paid from the OPPS. Those include off-campus emergency departments, centers established prior to Nov. 2, 2015, when the law took effect, and centers located within 250 yards of a remote location of the hospital.

The 340B program has been in place since 1992 as a way to allow government-run and non-profit hospitals in underserved areas to provide certain drugs to their patients.

Blog Tags: CMS
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