Bipartisan Budget Act Section 603 vs Modifier –PO: A Breakdown
by Kimberly Anderwood Hoy Baker, JD
The new modifier –PO and the alternative payment provisions under the Bipartisan Budget Act Section 603 are both related to off-campus provider-based departments (PBD) but define off-campus PBD slightly differently. Earlier this month, CMS published FAQs on modifier -PO, giving providers valuable guidance on how the modifier will apply to hospital services. Last week, CMS also published a “note” indicating that they will wait until the CY 2017 OPPS proposed rule to provide further guidance on Section 603. Nevertheless, some of the guidance related to modifier –PO seems to indicate that CMS is trying to bring the requirements in line with off-campus PBDs covered by Section 603, rather than simply relying on preexisting regulatory definitions of off-campus departments.
Modifier –PO (“Services, procedures, and/or surgeries furnished at off-campus provider-based outpatient departments”) was adopted January 1, 2015, with a required use date of January 1, 2016. It was originally adopted as a modifier to track statistics and information related to off-campus PBD of hospitals. The modifier nominally applies to all items and services provided in off-campus PBD according to the Claims Processing Manual, but there are some significant exceptions.
The recent FAQs make it clear that modifier –PO does not apply to non-OPPS services. These services include therapy and a few other services still paid on other fee schedules, noted with a status indicator A under the OPPS, as well as dialysis, which is paid under the ESRD PPS. This guidance would dovetail with Section 603, which arguably only applies to services that would otherwise be payable under OPPS, exempting them from OPPS and providing alternative payment. Additionally, because critical access hospital (CAH) services are not paid under the OPPS, the modifier will also not apply to any services at PBDs of a CAH.
Similarly, the FAQs and other guidance indicate modifier –PO is not used for off-campus emergency departments. This guidance is in line with section 603 which excludes the off-campus alternative payment methodology from items and services furnished at dedicated emergency departments.
Section 603 essentially excludes services that are provided in off-campus departments of hospitals from OPPS payment and instead sets up alternative payment methodologies for those services. Again, nominally this appears to be a broad exclusion from OPPS payment, but there are significant exceptions for departments and services of departments that do not fit the definition of off-campus under Section 603.
For more clarification on this topic, see this week's Note from the Instructor.