On Wednesday May 18, 2016, members of the U.S. House Ways and Means Committee introduced a proposal to continue OPPS payment for those off-campus provider-based departments that were “mid-build” as of November 1, 2015.  Under existing law, only off-campus departments actually billing as provider-based on or before November 1, 2015 will continue to be paid at the OPPS rate beginning January 1, 2017.  This bill proposes to expand that so-called “grandfathering” provision to departments that were undergoing construction at that time.  In addition, the legislation would require that all off-campus departments of PPS-exempt cancer hospitals continue to receive hospital outpatient payment rates for services.  The bill is titled the Helping Hospitals Improve Patient Care Act (HHIPA) of 2016. 

Section 603 of the Bipartisan Budget Act of 2015 (BBA15), enacted on November 2, 2015, changed how CMS will pay for hospital outpatient services beginning in CY 2017.  Any off-campus provider-based department that began billing as a hospital department after the date of enactment will be paid according to either the Medicare Physician Fee Schedule (MPFS) or Ambulatory Surgical Center (ASC) Payment System.  Only departments billing as hospital departments prior to the BBA15’s enactment will continue to receive OPPS payment.  This payment change meant that departments already under development – but not yet billing – on November 1, 2015 will automatically revert to the MPFS or ASC payment rate come January 1, 2017.

The Committee’s new proposal attempts to soften the financial impact for those hospital departments.  Section 201 of the HHIPA proposes that CMS pay for outpatient services furnished in these departments at the OPPS rate beginning January 1, 2018 if the hospital satisfies three criteria:

• The CEO or COO of the hospital submits documentation to CMS before July 1, 2016 attesting that its department was “mid-build” as of November 1, 2015.  The legislation defines “mid-build” as “a binding written agreement with an outside unrelated party for the actual construction” of an off-campus department.
• The hospital submits to CMS a full provider-based attestation for the new department before July 1, 2016.
• The hospital includes the department as a practice location of the CMS-855A.

HHIPA instructs CMS to audit all such attestations no later than December 31, 2018.  It also instructs CMS to “deem” all off-campus departments that had submitted provider-based attestations prior to December 1, 2015 as grandfathered.  New departments of PPS-exempt cancer hospitals must submit attestations to CMS no later than 60 days following a department becoming provider-based.

Among other proposals, HHIPA would pay for these payment changes by reducing the scheduled payment rate increase for CY 2018 to 0.459 percent, down from the original 0.5 percent.

As of this writing there is no companion Senate bill.  However, a bipartisan group of 51 senators sent a letter to the CMS Administrator on May 19 urging CMS to adopt a “flexible” implementation of section 603.  The group of senators urged CMS to pay OPPS rates for all services furnished by dedicated emergency departments (not solely emergency department codes), to instruct regional offices to adopt expansive definitions of a hospital campus, and to permit department relocations and changes in ownership without jeopardizing the department’s grandfathered status.  A copy of that letter is available here.

HHIPA includes other proposals such as directing CMS to consider patient socioeconomic status in the Medicare Hospital Readmissions Program, to exempt physicians who primarily practice in ASCs from Meaningful Use or MIPS payment reductions, and to delay for three years any terminations of Medicare Advantage plan contracts for failing to achieve minimal quality ratings.

The full legislative text is available here.  A Committee summary of the legislation is available here, and a section-by-section summary is available here.  The legislation is scheduled for a committee markup on Tuesday, May 24, 2016. 

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