CMS Finalizes CY2018 OPPS & PFS Rules

Bipartisan healthcare talks may have stalled in Congress as tax reform takes center stage, but the Centers for Medicare & Medicaid Services (CMS) finalized the CY 2018 Hospital Outpatient Prospective Payment Systems (OPPS) and Physician Fee Schedule (PFS) rules last week, bringing big changes to Medicare reimbursement in 2018. For highlights, read on.

2018 OUTPATIENT PROSPECTIVE PAYMENT SYSTEM HIGHLIGHTS
Overall, in 2018, CMS will increase OPPS payment rates by 1.35 percent.

340B – Most notably, the 2018 OPPS rule finalized substantial cuts to Part B drug reimbursement for 340B hospitals. Starting January 1, 2018, 340B entities will be paid Average Sales Price (ASP) minus 22.5 percent, instead of ASP plus 6 percent, for separately payable drugs that were acquired under the 340B Program, excluding drugs on pass-through status and vaccines. Most 340B entities are included in this reduction; however, for 2018 there are exemptions for rural sole community hospitals (SCHs), PPS-exempt cancer hospitals, and children’s hospitals. In the final rule, the agency reserves the right to revisit these exemptions in 2019. Drugs not purchased under the 340B Drug Pricing Program will continue to be paid at ASP plus 6 percent.

Early estimates suggest that this cut will produce $1.6 billion in savings which will be redistributed through a 3.2 percent increase in payment for non-drug items and services across all hospitals.

Operationally, CMS will also require the use of a modifier to identify whether a drug was purchased under the 340B Drug Pricing Program. One modifier will be required for hospitals that are subject to the payment reduction and another modifier for hospitals who are exempt from the payment reduction but still acquire drugs under the 340B Program.

ACCC and many other stakeholder groups advocated strongly against this proposal and hoped for a more constructive policy conversation about real reforms to the 340B program. Several hospital groups, including the American Hospital Association (AHA), the Association of American Medical Colleges (AAMC), and America’s Essential Hospitals, are considering a lawsuit to stop CMS from finalizing these reductions.

Drug Packaging – Under the prospective payment system, CMS has continually put forward policies that move OPPS toward bundled payments. In 2015, CMS conditionally packaged payment for ancillary services assigned to an APC group with a geographic mean cost of $100 or less, but excluded low-cost drug administration services. In 2018, CMS is finalizing its policy to conditionally package payment for low-cost drug administration services.

In 2018, CMS also extends non-enforcement of direct supervision requirements for outpatient therapeutic services for Critical Access Hospitals (CAHs) and rural hospitals with 100 or fewer beds in 2018 and 2019. Additionally, the agency is making changes to the date-of-service policy (i.e., the “14-day rule”) so that, in general, labs can bill Medicare directly for advanced diagnostic laboratory tests (ADLTs) and molecular pathology tests.

2018 MEDICARE PHYSICIAN FEE SCHEDULE HIGHLIGHTS
Overall, in 2018, CMS will increase physician payment rates by 0.41% with no combined impact on hematology/oncology and an estimated 1% increase for radiation oncology and radiation therapy centers.

Payment Rates for Non-excepted Off-campus Provider-Based Hospital Departments – CMS is finalizing a reduction to payment rates for services provided at non-excepted off-campus hospital outpatient provider-based departments (i.e., off-campus facilities that began billing under OPPS after Nov. 2, 2015). Payment rates for services provided at these facilities will change from 50 percent of the OPPS rate to 40 percent of the OPPS rate. The agency states that this payment decrease is meant to “level the playing field” between hospitals and physician practices by promoting “greater payment alignment.”

Biosimilars – In a reversal of agency policy, CMS also finalizes a policy that each biosimilar product will receive its own unique reimbursement code. This is a departure from a policy in the CY 2017 OPPS Final Rule requiring that biosimilar products that rely on a common reference product be grouped into the same payment calculation for determining a single ASP payment limit.

Telehealth Services Expansion – In the 2018 PFS, CMS significantly expands telehealth services, adding numerous codes to the telehealth services list – including new codes for visits to determine low dose computed tomography eligibility, interactive complexity, health-risk assessments, care planning for chronic care management, and psychotherapy for crisis. To reduce the administrative burden for providers, CMS is also finalizes a proposal that will not require reporting a telehealth modifier on future telehealth claims.

Additionally, CMS finalizes that practitioners will be required to begin reporting consultation of appropriate use criteria (AUCs) beginning in 2020.

ACCC members are invited to join us for a webinar on Wednesday, November 29, 2017 from 3-4 PM EST, for an in-depth analysis of how these final 2018 payment rules may impact your cancer program or practice. Learn more and register.