CMS proposes to trim outpatient payments in 2016

The Centers for Medicare & Medicaid Services (CMS) proposed a modest trim to payments to hospitals for outpatient services and to ambulatory care providers for the 2016 calendar year.

CMS is proposing an overall cut of 0.1 percent under the Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center Payment System (ASC). That would be the result of a variety of calculations, according to data from CMS, including a market basket increase of 2.7 percent, minus a 0.6 percentage point adjustment for multi-factor productivity and a legally mandated 0.2 percentage point cut. There also would be a 2.0 percent cut to address perceived inflation in the OPPS payment rates. That inflation would come as the result of excess payments for laboratory tests that are currently paid separate from the overall OPPS. MedPage Today reported that the excess payments topped $1 billion to labs last year. The proposed cut would also have 2 percent related decrease to the overall Conversion Factor.

Additionally, the agency is proposing nine new comprehensive ambulatory payment classifications (CAPC), which would bump up the total number from 25 to 34. The new CAPCs would primarily address patients who are held in observation care in a hospital outpatient setting for up to eight hours, according to CMS.

CMS also proposes exceptions to the two-midnight rule "to be determined on a case-by-case basis by the physician responsible for the care of the beneficiary, subject to medical review." However, CMS clarified that it expected such instances to be rare, particularly any stays under 24 hours.

The two-midnight rule has been a thorn in the side of hospitals, which have had to carefully monitor patients and decide whether to admit them and risk no payment from Medicare. Meanwhile, patients who are sent directly to nursing facilities by hospitals without being admitted risk not having Medicare coverage for that stay. As a result of such rules, emergency department physicians are often the arbiter of such complex decisions.

In addition to those changes, CMS has proposed a 2 percent payment reduction to providers that don't meet the Hospital Outpatient Quality Reporting Program requirements.

CMS is accepting comments on the proposed payment changes until Aug. 31.

To learn more:
- read the MedPage Today article
- check out the CMS proposal

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