Off-campus Provider-based Proposals in OPPS 2017, Part 2

by Kimberly Anderwood Hoy Baker, JD

Applicable Payment System

CMS proposes to define the applicable payment system for “nonexcepted” services under Section 603 to be the MPFS, but they state in the proposed rule they have no way for hospitals to bill for “nonexcepted” services under the MPFS for 2017. They state they are actively exploring options to allow hospitals to bill “nonexcepted” services under the MPFS beginning in 2018. CMS is seeking comments on changes to enrollment forms, claim forms, or cost reports that would be required for hospitals to bill for “nonexcepted” services under the MPFS.  

Additionally, CMS states they believe they have to establish a new provider/supplier type for hospitals under which to enroll these departments to allow them to bill under the MPFS using a professional claim. Under CMS’ proposal, hospitals would not be allowed to bill for services in “nonexcepted” off-campus provider-based departments, as they are currently enrolled as part of the hospital, although they acknowledge they would still be provider-based departments. As provider-based departments, they would still have to meet conditions of participation and regulations for provider-based departments, but would be paid as a non-hospital setting under the MPFS, similar to a freestanding clinic.

This proposal undoubtedly concerns some providers who may not be able to efficiently produce a professional claim (CMS 1500) for hospital services. It may require them to purchase new software and set up new arrangements they may not currently have if they are not billing for employed or contracted physicians. Additionally, the conditions of participation and provider-based regulations are expensive for hospitals to comply with, especially for off-campus departments, and many of these departments are currently operated at a loss as a service to the community. If they have to continue to comply with these higher standards, while reimbursement is reduced, these departments may no longer be financially viable.

In fact, CMS almost invites providers to enroll these departments as “another provider/supplier” type and bill under the payment system for that provider type. But this is problematic for some departments that don’t qualify to be enrolled as another type of provider or supplier. For example, wound care and infusion centers are often not staffed by physicians and do not operate similar to physician offices and therefore would not be able to enroll as a group practice.

Temporary Alternate Applicable Payment System for 2017

CMS proposes a temporary payment system that would allow payment to be made to a physician or non-physician practitioner for “nonexcepted” services at off-campus provider-based departments in 2017. Under the proposal, a physician in the department would bill for the “nonexcepted” items and services under the MPFS and be paid at the non-facility (office) payment rate. No facility payment would be made to the hospital for the services. 

The only exception would be for services such as labs that are not paid under the OPPS and, therefore, are not subject to the provisions of Section 603. Hospitals could continue to bill laboratory services that qualify for separate payment and be paid under the Clinical Lab Fee Schedule. Laboratory services qualifying for separate payment include: labs that are unrelated to other services on the same day, labs that are the only services provided on a day, and specified molecular pathology and preventive laboratory services.

To read the complete, detailed artcile that appeared on Medicare Compliance Watch, click here.