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CMS Releases CY 2015 OPPS and ASC Proposed Rule

On July 3, 2014 CMS released the Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems proposed rule for calendar year (CY) 2015. The rule proposes revisions to the Medicare hospital outpatient prospective payment system (OPPS) and the Medicare ambulatory surgical center (ASC) payment system for the coming year.

OPPS/ASC Proposed Rule Highlights

Conversion Factor: The proposed conversion factor for CY 2015 is $74.176 for outpatient department payment rates with a budget neutrality factor of 0.9998, which equals a 2.1 percent increase over the current rate of $72.672 in 2014. Hospitals failing to meet the reporting requirements of the Hospital Outpatient Quality Reporting (OQR) Program are subject to a reduction of 2.0 percent, resulting in a lowered conversion factor of $72.672.

Implementation of Comprehensive APCs: In the CY 2014 final rule, CMS created 29 comprehensive Ambulatory Payment Classifications (APC) to pay for high-cost device-dependent services using a single payment for the entire hospital stay. Implementation of the policy was delayed until CY 2015, to allow the agency and hospital stakeholders to further evaluate the impact of the policy change. For CY 2015, CMS is proposing several modifications to the comprehensive APC policy, including additional revisions for device-dependent APCs, along with packaging of all add-on codes furnished as part of a comprehensive service. After additional consolidation and restructuring, CMS is now proposing 28 Comprehensive APCs for 2015. The following urologic Comprehensive APCs and CPT codes would be affected by the policy change:

0385 Level I Urogenital 53440, 53444, 54400 and 55873
0386 Level II Urogenital 53445, 53447, 54401, 54405, 54410 and 54416

Beginning in CY 2015, CMS proposes to require that facilities report a device code for procedures currently assigned to a device-dependent APC. Under the proposal, CMS would require a device code be reported on a claim when a procedure assigned to one of the above APCs is reported.

In addition, CMS is proposing to modify the complexity adjustment policy for Comprehensive APCs. The adjustment is applied when a primary procedure assigned to a Comprehensive APC is reported with other specified procedures also assigned to Comprehensive APCs, or with a specified packaged add-on code. When the facility reports one of these combinations, CMS is proposing reassignment to the next higher cost APC in the clinical family of comprehensive APCs.

Physician Modifier: In the proposed rule, CMS notes the increase in hospital acquisitions of physician practices and the increase in the delivery of physicians' services in a hospital setting. Beginning January 1, 2015, CMS proposes to collect information on the type and frequency of physician and outpatient hospital services furnished in off-campus provider-based departments by requiring the use of a new HCPCS modifier that would be reported with every code for physician and outpatient hospital services. The modifier would be reported on both the CMS-1500 claim form for physician services and the UB-04 form (CMS Form 1450) for hospital outpatient services. CMS is asking for additional public comment on whether the use of a modifier is the best mechanism for collecting this level of service data.

Packaging Policies: CMS is proposing to conditionally package all ancillary services assigned to APCs with a geometric mean cost of $100 or less. When these ancillary services are furnished individually without additional services, CMS proposes to make separate payment for the services only. CMS also is proposing to package payment for prosthetics, because they are seen as integral, ancillary, supportive, dependent, or adjunctive to the primary service. Preventative services, certain psychiatry and counseling services, and certain low cost drug administration services would be excluded from the packaging policy.

Data Development: In the CY 2014 final rule, CMS proposed to adopt new standard cost centers for CT, MRI, and cardiac catheterization procedures. During the March 2014 CMS Advisory Panel on Hospital Outpatient Payment meeting, the panel made a number of recommendations related to the data process for the proposed cost centers. Specifically, that CMS provide the panel with a list of APCs for which costs fluctuate by more than 10 percent. CMS has accepted this recommendation and proposes to adopt the new standard cost centers from the CY 2014 final rule.

Low Dose Prostate Brachytherapy: For CY 2015, CMS proposes no payment changes for low dose prostate brachytherapy APC 8001, which combines CPT codes 55875 and 77778. The proposed geometric mean cost for APC 8001 is approximately $3669.00.

Hospital E/M and Emergency Department Visits: In the CY 2014 final rule, CMS collapsed five levels of clinic and emergency department visits (99201-99205 & 99211-99215) into one single HCPCS code G0463 (Hospital outpatient clinic visit for assessment and management of a patient) payable under APC 0634. For CY 2015, CMS proposes to continue this policy and will use CY 2013 claims data to develop the proposed CY 2015 OPPS payment rates for G0463. The proposed payment rate for G0463 is $98.06. In the 2014 final rule, CMS also adopted new composite APC 8009 for Extended Assessment and Management (EAM), replacing two former EAM APCs (8002 and 8003). For CY 2015, CMS is proposing to continue this policy. The proposed geometric mean cost for APC 8009 is $1287.00.

Payment of Drugs, Biologicals, and Radiopharmaceuticals: In addition, CMS proposes to continue paying the average sales price (ASP) + 6 percent for Part B drugs administered in the outpatient setting. CMS proposes that drugs and biologicals whose per day costs exceed the final drug packaging threshold of $90 would receive separate payment under individual APCs. Such items will be reimbursed at ASP + 6 percent, which is the same as the 2014 payment calculation.

Cancer and Rural Hospitals: For CY 2015, CMS proposes to continue to provide additional payments to cancer hospitals at 0.89 percent, and certain rural hospitals at 7.1 percent.

Requests for Expansion of Physician-Owned Hospitals: CMS proposes to permit physician-owned hospitals to use data from certain internal or external data sources, in addition to the CMS Healthcare Cost Report Information System (HCRIS) data, to support expansion requests.

Physician Certification of Inpatient Services: CMS currently requires physician certification of all inpatient hospital admissions. For CY 2015, CMS proposes to require physician certification for hospital inpatient admissions only for long-stay cases and outlier cases. Certifications for long-stay cases must be made no later than 20 days into the stay. The certification must include: (1) the reasons for continued hospitalization for medical treatment, or medically necessary diagnostic study, or special or unusual services for cost outlier cases; (2) the estimated time the patient will need to remain in the hospital; and (3) the plans for post-hospital care, if appropriate.

Proposed Overpayment Recovery and Appeals Processes for Medicare Parts C and D: The proposed rule contains provisions establishing a formal process that would allow CMS to recoup overpayments that result from the submission of erroneous payment data by a Medicare Advantage (MA) organization or Part D sponsor when the organization or sponsor fails to correct those data voluntarily before payment reconciliation. In addition to the recoupment process, CMS is proposing a three-level appeals process for MA organizations and Part D sponsors to seek review of CMS's determination that the payment data submitted by the organization or sponsor was erroneous.

Hospital Outpatient Quality Reporting (OQR) Program: Under the Hospital OQR program, hospitals are required to report on a set of 27 quality measures determined by CMS; hospitals that fail to comply are penalized with a 2.0 percent reduction in the conversion factor used to calculate APC payments under OPPS. For CY 2015, CMS proposes to remove the following three topped out measures from the OQR Program for the CY 2017 payment determination and subsequent years:

  • OP-4: Aspirin at Arrival (NQF # 0286);
  • OP-6: Timing of Antibiotic Prophylaxis; and
  • OP-7: Prophylactic Antibiotic Selection for Surgical Patients (NQF # 0528).

Ambulatory Surgical Center Payment Update: The proposed ASC conversion factor for CY 2015 is $43.918. This is a 1.2 percent increase from the CY 2014 conversion factor of $43.471. ASCs that do not meet the quality reporting requirements defined by the ASC Quality Measure Reporting (ASQR) Program are subject to a reduced conversion factor of $43.050.

Ambulatory Surgical Center Quality Reporting (ASCQR) Program: In the 2014 OPPS final rule, CMS finalized their decision to implement a quality reporting program for ASCs. This program began in 2012 and is aligned with other existing quality reporting programs for inpatient and outpatient hospitals. For CY 2015, CMS is proposing to adopt only one new quality measure for the CY 2017 payment determination and subsequent years.

The AUA staff is still reviewing the rule and will provide further analysis is a separate update. If you have questions about the proposed changes, please contact the AUA at R&R@AUAnet.org. CMS will accept comments on the proposed rule until September 2, 2014.