2017 OPPS Proposed Rule: CMS Listens to Stakeholders on Device-Intensive Procedures Policy

Acknowledging comments received from providers regarding policies in the 2016 OPPS proposed rule, CMS is proposing for 2017 that procedures with a HCPCS code-level device offset of more than 40% of the APC costs would be designated as device-intensive procedures and subject to those applicable payment policies.

Previously, commenters noted that calculating device intensity at the APC level does not take into account device similarity within an APC, according to CMS. For example, some procedures that include high-cost implantable devices are assigned to APCs with procedures that include the cost of significantly less expensive devices or none at all, leading to lower APC geometric mean costs.

A HCPCS-level device offset would be calculated using only claims for a single HCPCS code. According to CMS:

We believe that such a methodological change would result in a more accurate representation of the cost attributable to implantation of a high-cost device, which would ensure consistent device-intensive designation of procedures with a significant device cost. Further, we believe a HCPCS code-level device offset would remove inappropriate device-intensive status to procedures without a significant device cost but which are granted such status because of APC assignment.

For new HCPCS codes that do not have enough claims data to set rates, CMS proposes applying device-intensive status at a default 41% until the data is available. In certain rare instances, however, CMS may temporarily assign a higher offset percentage if pricing data from a manufacturer warrants the change.

Once the claims data is available, CMS would apply device-intensive status if the device offset is more than 40%.

CMS also proposes to change the formula for paying device pass-through payments for those devices having pass-through status for two to three years until CMS gains claims data to establish an APC payment rate. CMS proposes to use the implantable device cost-to-charge (CCR) ratio rather than the overall CCR. 

“It is nice that CMS will use this more specific CCR in calculating the cost of devices for pass-through payment in addition to rate setting,” says Valerie Rinkle, MPA, lead regulatory specialist and instructor for HCPro, a division of BLR, in Middleton, Massachusetts. However, CMS reports that a third of hospitals do not report the costs of their implantable devices separate from other non-implantable medical supplies. Hospitals have to answer a question in the S series worksheet in order to enable the implantable cost center on subsequent worksheets in the cost report, says Rinkle. 

For a full list of ASC device-intensive procedures, see Addendum AA of the 2017 OPPS proposed rule.

Comments are due to CMS by September 6 and a final rule is expected by November 1.

Jugna Shah, MPH, president and founder of Nimitt Consulting, Inc., and Rinkle will analyze the rule and give a comprehensive overview of the changes and what providers may want to comment on in HCPro’s annual OPPS proposed rule webcast from 1-3 p.m. (Eastern) Wednesday, August 17.