On October 31, 2014, CMS issued its CY 2015 outpatient and ambulatory surgical center (ASC) PPS final rule. CMS finalized a net payment rate increase of 2.2 percent under the OPPS. This figure includes a 2.9 percent market basket update, less a productivity adjustment of 0.5 percent and a 0.2 percent adjustment required by the Affordable Care Act. The final payment increase is 0.1 percent higher than originally proposed. CMS will continue to pay for Part B drugs at the average sales price plus six percent for non-pass-through drugs and biologicals.

OPPS Outlier Payments

CMS will make OPPS outlier payments when the cost of an outpatient hospital service exceeds both the multiple threshold of 1.75 times the APC payment rate for the service and the CY 2015 fixed dollar threshold of the APC payment amount plus $2,775. CMS reduced the fixed-dollar threshold from the proposed amount of $3,100 and estimates that outlier payments will total one percent of all OPPS payments in CY 2015.

Comprehensive APCs

CMS adopted 25 of 28 comprehensive APCs (C-APCs) included in the proposed rule. CMS will group items and services into C-APCs in order to make one packaged payment for those items and services commonly furnished during high-cost primary services such as device implantations. However, CMS opted not to establish C-APCs for Level II Tube or Catheter Changes/Repositioning (APC 0427), Level II Vascular Access Procedures (APC 0622), and Insertion of Intraperitoneal and Pleural Catheters (APC 0652). CMS agreed with commenters that actual costs associated with these three procedures significantly exceed their proposed C-APC amounts. The agency will instead pay for these services at their current APC amount.

Packaging of Ancillary Services

CMS finalized its proposal to package payment for ancillary services assigned to APCs with a geometric mean cost of $100 or less. When furnished with other primary services, these ancillary services will not be separately payable. When these ancillary services are furnished by themselves, and not ancillary to other primary services, CMS will continue to make separate payment.  Exceptions to the ancillary services packaging policy include preventive services, psychiatry-related services, and drug administration services. 

Abandonment of Physician Certification Requirement

CMS finalized its proposal to no longer require physician certification of the medical necessity of inpatient services for all inpatient admissions under the Two-Midnight Rule. CMS will only require a physician certification for outlier cases and long-stay cases of 20 days or more. CMS will continue to require, however, a signed physician admission order when a patient has been formally admitted as an inpatient of the hospital.

Tracking of Outpatient Provider-Based Services

On January 1, 2015, CMS will begin collecting information on the types and frequency of services furnished in off-campus provider-based departments. To track this data, CMS will require providers to include the HCPCS modifier “PO” with every code for outpatient hospital services furnished in an off-campus provider-based department. Physician services will not require a modifier, but will instead be billed using a new place of service (POS) code. Currently, physicians bill for services furnished in a provider-based department using POS 22. CMS will delete POS 22 and instead release two new POS codes “as soon as practicable”—one for on-campus and satellite hospital locations, and another for off-campus provider-based outpatient departments. Data collection from hospitals will be voluntary in 2015 and required beginning on January 1, 2016.

ASC Payment Rate Update

CMS adopted an overall payment rate adjustment of 1.4 percent for ambulatory surgical centers (ASCs), up from the proposed increase of 1.2 percent. The increase is based on a revised Consumer Price Index-Urban Consumers update of 1.9 percent for 2015, net of a 0.5 percent productivity adjustment required by the Affordable Care Act.

Overpayment Recovery and Appeals Processes for Medicare Parts C and D

CMS adopted its proposal to establish a formal process that will allow CMS to recoup overpayments that result from the submission of erroneous payment data by a Medicare Advantage (MA) organization or Part D sponsor when the organization or sponsor fails to correct those data voluntarily before payment reconciliation. In addition to the recoupment process, CMS adopted its proposed three-level appeals process for MA organizations and Part D sponsors to seek review of CMS’s determination that the payment data submitted by the organization or sponsor was erroneous.

The final rule is available here, and will be published in the Federal Register on November 10, 2014.

Reporter, Christopher Kenny, Washington, DC, + 1 202 626 9253, ckenny@kslaw.com.