House Ways and Means Approves Expanded Provider-Based Grandfathering Provision

King & Spalding

On May 24, 2016, the U.S. House Ways and Means Committee approved legislation that would continue Hospital Outpatient Prospective Payment System (OPPS) payment for off-campus provider-based departments that were “mid-build” as of November 1, 2015.  Under the Bipartisan Budget Act of 2015 (BBA 2015), any facilities opening after November 1, 2015 will be paid the Physician Fee Schedule or Ambulatory Surgical Center payment rate and not the higher hospital OPPS rate starting in CY 2017.  If ultimately enacted, this new legislation would provide relief—i.e., OPPS payment rates—for departments already under construction when BBA 2015 was enacted, provided certain criteria are met.

Members of the Committee introduced the Helping Hospitals Improve Patient Care Act of 2016 (HHIPA) (H.R. 5273) on May 18, 2016, and it was quickly approved less than a week later with bipartisan support.  Without additional congressional intervention, any off-campus provider-based department that began billing after enactment of BBA 2015 is subject to reduced payment rates starting in CY 2017.

Under BBA 2015, off-campus departments billing under the OPPS on or before November 1, 2015 are grandfathered into the OPPS rate.  In addition, HHIPA directs CMS to grandfather certain additional provider-based departments into the OPPS rate starting January 1, 2018, provided that the following requirements are met:

  1. The CEO/COO attests its department was “mid-build” as of November 1, 2015.  HHIPA defines “mid-build” as “a binding written agreement with an outside unrelated party for the actual construction” of an off-campus department.
  2. The hospital submits a full provider-based attestation for the new department before December 31, 2016.
  3. The hospital includes the department as a practice location on the CMS-855A.

The full text of the bill is available here.  Additional details about HHIPA are available in the May 23, 2016 edition of Health Headlines, available here.

Reporter, Elizabeth N. Swayne, Washington, D.C., + 1 202 383 8932,

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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