Exceptional service. Dykema delivers. Provider-Based Update “Nonexcepted” Off -Campus Outpatient Provider-Based Departments Getting Paid in 2017 and Beyond Presented by Donna A. O’Connor California | Illinois | Michigan | Minnesota | Texas | Washington, D.C. www.dykema.com
This presentation was prepared by Dykema Gossett for informational purposes and is not legal advice. 1 Exceptional service. Dykema delivers.
A Story of Budget Compromises and IT Systems… • Nov 2, 2015: Congress reached a budget deal by ending hospital outpatient prospective payment system (“OPPS”) payments to new off-campus outpatient provider-based departments (“off - campus PBDs”) • July 14, 2016: CMS proposed rule: – Payment under OPPS dependent upon whether services and locations are “excepted” or “nonexcepted” – Excepted status lost with expanded services, relocations and, in some cases, acquisitions – Facility fee payments uncertain due to technical barriers • Nov 2016: CMS to finalize rule • Jan 1, 2017: OPPS payments end for new off-campus PBDs 2 Exceptional service. Dykema delivers.
Provider-Based Basics: 50 Years of Little Guidance and Enforcement Little FCA Enforcement CMS Region Guidance and Enforcement Provider-Based Conditions of Payment 42 CFR 413.65 Hospital Conditions of Participation 42 CFR Part 482 3 Exceptional service. Dykema delivers.
Provider-Based Basics: Hospitals Comply as a Single Entity • Medicare requires that the entire hospital, including all its on or off campus locations, comply with the conditions of participation and conditions of payment as one • A single certified hospital with multiple locations must have one medical staff, governing body, unified medical record, organizational policies, nursing department and license • Establish “oneness” with main provider • Be separate from other providers • Be a hospital 24/7 4 Exceptional service. Dykema delivers.
Provider-Based Basics: Hospitals Follow the Money PBD Physician Office Visit Visit Included in prof fee Facility Fee $40 Professional Fee $90 ($100-$10) $100 Total to Providers $130 $100 Patient Copay $26 ($18 + $8) $20 Billed To OPPS and PFS PFS Medicare Payment $104 $80 5 Exceptional service. Dykema delivers.
Provider-Based Basics 6 Exceptional service. Dykema delivers.
Provider-Based Basics 7 Exceptional service. Dykema delivers.
Moving Toward Site Neutrality MedPAC CMS OIG Payment differences drive physician Seeking a better practice acquisitions understanding of No evidence that by hospitals; 33% trend on Medicare provider-based increase in hospital payment and designation delivers outpatient services beneficiary cost- benefits that justify over 7 years sharing additional costs; eliminate provider- based designation 8 Exceptional service. Dykema delivers.
Bipartisan Budget Act of 2015 • Off-campus PBDs not eligible for OPPS reimbursement • Grandfathers off-campus PBDs that were billing for services furnished prior to enactment on Nov 2, 2015 • Exception for emergency departments • Permits payment under OPPS for non-grandfathered off- campus PBDs, but only through Dec 31, 2016 9 Exceptional service. Dykema delivers.
Bipartisan Budget Act of 2015 • “Department of a provider” means a facility created or acquired by a main provider for the purpose of furnishing the same type of services as those provided by the main provider under the same name, ownership and financial/administrative control • “Campus” means the physical area immediately adjacent to the provider’s main buildings (or remote locations of hospitals), other areas and structures that are not strictly contiguous to the main buildings but are located within 250 yards of the main buildings, and any other areas determined on an individual case basis, by the CMS regional office, to be part of a provider’s campus • Determinations of what constitutes an outpatient department of a provider, long made by CMS regional offices, not subject to administrative or judicial review 10 Exceptional service. Dykema delivers.
Bipartisan Budget Act of 2015 • Hospitals taken off guard • Applies to all off-campus PBDs; not tailored to the concern of increased costs associated with hospital acquisitions of physician practices • Unfair to hospitals with off-campus PBDs ready to open or under development • Creates unfair competition • Budget deal — difficult to reverse 11 Exceptional service. Dykema delivers.
Bipartisan Budget Act of 2015 12 Exceptional service. Dykema delivers.
Proposed Rule: Excepted and Nonexcepted Status Excepted off-campus PBD locations will be paid under OPPS (grandfathered under statute as billing for items and services furnished prior to enactment on Nov 2, 2015) Nonexcepted off-campus PBD locations will be paid under an applicable fee schedule (not grandfathered under statute) On-campus of hospital (within 250 yards of a hospital or remote location of a hospital) will be paid under OPPS 13 Exceptional service. Dykema delivers.
Proposed Rule: Excepted and Nonexcepted Status Excepted items and services, provided by excepted PBDs will continue to be paid under OPPS – Includes items and services furnished in a dedicated emergency department, whether or not emergency services, in either an excepted or nonexcepted off-campus PBD location – Includes items and services furnished in an excepted location, in same clinical family as existing items and services at the location; does not include items and services in a new clinical family at the location 14 Exceptional service. Dykema delivers.
Proposed Rule: Excepted and Nonexcepted Status Nonexcepted items and services will be paid under an applicable fee schedule – Includes items and services furnished in a nonexcepted location – Includes items and services in new clinical family in an excepted location 15 Exceptional service. Dykema delivers.
Proposed Rule: Ex Excep cepted ted Off-Campus PBD OPPS payment for excepted items • and services, i.e., all items and services in clinical families furnished prior to Nov 2, 2015 • Expanding into new clinical families will result in nonexcepted items and services paid under the applicable fee schedule 16 Exceptional service. Dykema delivers.
Proposed Rule: Non Nonexcep cepted ted PBD OPPS payment for excepted • emergency department services • All other services are nonexcepted items and services paid under the applicable fee schedule 17 Exceptional service. Dykema delivers.
Proposed Rule: Expanding Services • Items and services not part of a clinical family of services furnished by the excepted off-campus PBD on Nov 2, 2015, not payable under OPPS • No limit on volume of existing services within a clinical family 18 Exceptional service. Dykema delivers.
Proposed Rule: 19 Clinical Families • • Advanced Imaging Minor Imaging • • Airway Endoscopy Musculoskeletal Surgery • • Nervous System Procedures Blood Product Exchange • • Ophthalmology Cardiac/Pulmonary Rehab • • Clinical Oncology Pathology • • Diagnostic tests Radiation Oncology • • ENT Urology • • Vascular/Endovascular/ General Surgery Cardiovascular • Gastrointestinal • Visits and related services • Gynecology 19 Exceptional service. Dykema delivers.
Proposed Rule: Relocating Off-Campus PBDs • Off-campus PBD that moves or relocates from the physical address and suite number listed on the provider’s enrollment form as of Nov 1, 2015, becomes nonexcepted off-campus PBD furnishing nonexcepted items and services no longer payable under OPPS 20 Exceptional service. Dykema delivers.
Proposed Rule: Change in Ownership • Excepted status of off-campus PBD transfers upon sale only if ownership of main provider is also transferred and Medicare provider agreement is accepted by the new owner • If only the off-campus PBD sold, or if the provider agreement is not accepted by the new owner, all excepted off-campus PBDs and excepted items and services furnished by the excepted off-campus PBD lose excepted status 21 Exceptional service. Dykema delivers.
Proposed Rule: How Will Nonexcepted Items and Services be Paid in CY2017? • Statute prohibits CMS from paying hospitals for nonexcepted items and services under OPPS starting Jan 1, 2017 • CMS does not have a non-OPPS billing system that can pay hospitals for nonexcepted items and services 22 Exceptional service. Dykema delivers.
Proposed Rule: Applicable Payment Systems CY2017 Physicians bill for nonexcepted items and services under the PFS at the higher non-facility rate • PFS leaves many gaps in billing and payment • Diagnostic tests, incident to physician billing, Part B drug billing, surgical services, observation services, partial hospitalization services • Stark and Anti-Kickback Statute issues caused by higher PFS non-facility rate payment to physicians not incurring facility costs • Hospitals and physicians will need business arrangements to address these issues 23 Exceptional service. Dykema delivers.
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