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Provider-Based News

on Wednesday, 5 December 2018 in Health Law Advisory: Zachary J. Buxton, Editor

Two recent developments from CMS related to provider-based departments:

Payment Rates for Off-Campus Provider-Based Hospital Departments Paid Under the PFS

Section 603 of the Bipartisan Budget Act of 2015 changed the reimbursement source for certain items and services furnished by some off-campus hospital outpatient provider-based departments. The change was to switch the reimbursement from the Hospital Outpatient Prospective Payment System (OPPS) to payment under the applicable payment system. In CY 2017, CMS designated the Physician Fee Schedule (PFS) as the applicable payment system for most of these items and services.

Since the switch to PFS, unless the off-campus provider-based department was exempt (grandfathered), payment for items and services it has been made using a PFS Relativity Adjuster based on a percentage of the OPPS payment rate. The PFS Relativity Adjuster in CY 2018 has been 40 percent of the amount that would have been paid for those services under the OPPS. The Physician Fee Schedule Final Rule for 2019 continues the PFS Relativity Adjuster at 40 percent. CMS stated that it believes that this PFS Relatively Adjuster encourages fairer competition between hospitals and physician practices by promoting greater payment alignment between outpatient care settings.

Taking a “Fresh Look” at Co-Located Clinics

In an American Health Lawyers Association-sponsored webinar aired November 27, 2018, David Wright, Director of the Quality, Safety & Oversight Group Center for Clinical Standards and Quality at CMS, announced that CMS would be publishing new guidance on this issue. No release date was given other than stating that it would be “early next year.” Mr. Wright described the CMS review of past guidance (both formal and informal) as intended to take a “fresh look” at space sharing configurations. He suggested that restrictions in prior guidance related to hallways and common waiting areas may be less proscriptive under the new guidance. Mr. Wright emphasized that CMS is concerned with making sure space sharing does not negatively impact patient care or cause a patient to be confused about who is the provider of the service.

Until the new guidance is released, providers were encouraged to contact their CMS Regional Office with any questions.

Julie A. Knutson

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