2018 Proposed Federal Registers – OPPS & ASC



Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs

Summary of Major Provisions

These highlights are by no means a comprehensive listing of all provisions within the OPPS Proposed Rule, but provide a listing of significant items applicable to multiple facilities.


  • 340B Drug Pricing: CMS is proposing changes to our current Medicare Part B drug payment methodology for 340B hospitals that they believe will better reflect the resources and acquisition costs that these hospitals incur. These changes will allow the Medicare program and Medicare beneficiaries to share in some of the savings realized by hospitals participating in the 340B program. For CY 2018, CMS is proposing to exercise the Secretary’s authority to adjust the applicable payment rate for separately payable drugs and biologicals (other than drugs on pass-through and vaccines) acquired under the 340B program from average sales price (ASP) plus 6 percent to ASP minus 22.5 percent. In addition, CMS intends to establish a modifier to identify whether a drug billed under the OPPS was purchased under the 340B Drug Discount Program.

 Prospective Payment System (PPS) Specific

  • OPPS Update: For FY2018, CMS is proposing to increase payments rates by 1.75%.  This increase raises total payments under OPPS to approximately $70 billion.
  • Device Pass-through Applications: For CY 2018, CMS is going to evaluate five devices for eligibility to receive pass through payments and is seeking comments on whether each of these items meet the criteria for device pass-through status.
  • Rural Adjustment: CMS is proposing to continue the adjustment of 7.1 percent to the OPPS payments to certain rural sole community hospitals (SCHs), including essential access community hospitals (EACHs). This proposed adjustment would apply to all services paid under the OPPS, excluding separately payable drugs and biologicals, devices paid under the passthrough payment policy, and items paid at charges reduced to cost.
  • Changes to the Inpatient Only List: There are proposed changes to the procedures covered by this listing.  For example, CMS is proposing to remove total knee arthroplasty form the inpatient only list.  However, please review for the proposed Federal Register for a comprehensive listing.

Critical Access Hospital (CAH) Specific

  • Supervision of Hospital Outpatient Therapeutic Services: In the CY 2009 and CY 2010 OPPS/ASC proposed rule and final rule with comment period, CMS clarified that direct supervision is required for hospital outpatient therapeutic services covered and paid by Medicare that are furnished in hospitals, CAHs, and in provider-based departments (PBDs) of hospitals, as set forth in the CY 2000 OPPS final rule. For several years, there has been a moratorium on the enforcement of the direct supervision requirement for CAHs and small rural hospitals, with the latest moratorium on enforcement expiring on December 31, 2016.  In this proposed rule, CMS is proposing to reinstate the nonenforcement of direct supervision enforcement instruction for outpatient therapeutic services for CAHs and small rural hospitals having 100 or fewer beds for CY 2018 and CY 2019.


Medicare Program; Revisions to Payment Policies under the Physician Fee Schedule and Other Revisions to Part B for CY 2018; Medicare Shared Savings Program Requirements; and Medicare Diabetes Prevention Program

Summary of Major Provisions

These highlights are by no means a comprehensive listing of all provisions within the MPFS/ASC Proposed Rule, but provide a listing of significant items applicable to multiple facilities.

Payment Rates for Non-excepted Off-campus Provider-Based Hospital Departments Paid Under the PFS

Section 603 of the Bipartisan Budget Act of 2015 required that certain items and services furnished by designated off-campus hospital outpatient provider-based departments no longer be paid under the OPPS beginning January 1, 2017.

For CY 2018, CMS has proposed to reduce current PFS payment rates for these items and services by 50 percent. CMS currently pays for these services under the PFS based on a percentage of the OPPS payment rate. The proposal would change the PFS payment rates for these services from 50 percent of the OPPS payment rate to 25 percent of the OPPS rate.


CMS is proposing to add the following services to the telehealth list for CY 2018:

  • HCPCS code G0296 (counseling visit to determine low dose computed tomography (LDCT) eligibility);
  • CPT codes 90839 and 90840 (Psychotherapy for crisis; first 60 minutes) and (Psychotherapy for crisis; each additional 30 minutes (List separately in addition to code for primary service))

CMS is also proposing to eliminate the required reporting of the telehealth modifier for professional claims.  This effort is an attempt to reduce administrative burden for practitioners.

Ordinarily, services that are typically not considered to be face-to-face services do not need to be on the list of Medicare telehealth services. However, under the proposed rule, these services would only be considered Medicare telehealth services when billed with a base code that is also on the telehealth list and would not be considered Medicare telehealth services when billed with codes not on the Medicare telehealth list.

All four of the following codes are add-on codes that describe additional elements of services currently on the telehealth list and would only be considered telehealth services when billed as an add-on to codes already on the telehealth list. The four codes are:

  • CPT code 90785 (Interactive complexity (List separately in addition to the code for the primary procedure))
  • CPT codes 96160 and 96161 (Administration of patient-focused health risk assessment instrument (e.g., health hazard appraisal) with scoring and documentation, per standardized instrument) and (Administration of caregiver-focused health risk assessment instrument (e.g., depression inventory) for the benefit of the patient, with scoring and documentation, per standardized instrument))
  • HCPCS code G0506 (Comprehensive assessment of and care planning for patients requiring chronic care management services (list separately in addition to primary monthly care management service)) Because institutional claims do not use a POS code, we propose for distant site practitioners billing under CAH Method II to continue to use the GT modifier on institutional claims.

New Care Coordination Services and Payment for Rural Health Clinics (RHCs) and Federally-Qualified Health Centers (FQHCs)

Under this proposal, RHCs and FQHCs would receive payment for regular and complex chronic care management (CCM) services, general behavioral health integration services, and psychiatric collaborative care model services using two new billing codes created exclusively for RHC and FQHC payment. This payment would be in addition to the payment for an RHC or FQHC visit.

Effective for services furnished on or after January 1, 2018, CMS is proposing to create General Care Management code GCCC1 for RHCs and FQHCs.  The payment amount would be set at the average of the 3 national non-facility PFS payment rates for the CCM and general BHI codes and updated annually based on the PFS amounts. These 3 codes are:

  • CPT 99490 – 20 minutes or more of CCM services
  • CPT 99487 – at least 60 minutes of complex CCM services
  • HCPCS G0507 – 20 minutes or more of behavioral health integration (BHI) services

RHCs and FQHCs could bill the new General Care Management code when the requirements for any of these 3 codes (CPT codes 99490, 99487, or HCPCS code G0507) are met. The General Care Management code would be billed alone or in addition to other services during the visit. This code could only be billed once per month per beneficiary, and could not be billed if other care management services (such as TCM or home health care supervision) are billed for the same time period. Please note that CPT 99489 is an add-on code when CPT 99487 is furnished, and is therefore not included, due to the fact that RHCs and FQHCs are not paid for additional time once the minimum requirements have been met.

Improvement of Payment Rates for Office-based Behavioral Health Services

CMS is proposing an increased payment for office-based behavioral health services by better recognizing overhead expenses for office-based face-to-face services with the patient.

Physician Quality Reporting System (PQRS)

Under the PQRS, individual eligible professionals and group practices who did not satisfactorily report data on quality measures in 2016 are subject to a downward payment adjustment of 2.0 percent in 2018 to their PFS services. 2016 was the last reporting period for PQRS. The final data submission timeframe for reporting 2016 PQRS quality data to avoid the 2018 PQRS downward payment adjustment was January through March 2017. PQRS is being replaced by the Merit-based Incentive Payment System (MIPS) under the Quality Payment Program (QPP). The first MIPS performance period is January through December 2017.

CMS is proposing to; 1) change the current PQRS program policy that requires reporting of 9 measures across 3 National Quality Strategy domains to only require reporting of 6 measures for the PQRS; and 2) make similar changes to the clinical reporting requirements under the Medicare Electronic Health Record Incentive Program for eligible professionals.

Medicare Shared Savings Program Rules

CMS is proposing several modifications to the rules for accountable care organizations (ACOs) participating in the Medicare Shared Savings Program. These proposed modifications are designed to reduce burden and streamline program operations. The proposals include the following:

  • Revisions to the assignment methodology to reflect the requirement that for performance years beginning on or after January 1, 2019, the Secretary determine an appropriate method to assign Medicare Fee-for-Service beneficiaries to an ACO based on their utilization of services furnished by rural health clinics (RHCs) or federally qualified health centers (FQHCs);
  • The addition of three new chronic care management codes (CCM) and behavioral health integration (BHI) codes to the definition of primary care services used in the ACO assignment methodology; and
  • Reduction of burden for stakeholders submitting an initial Shared Savings Program application and the application for use of the skilled nursing facility (SNF) 3-Day Rule Waiver.

 2018 Value Modifier

In order to better align incentives and provide a smoother transition to the new Merit-based Incentive Payment System (MIPS) under the Quality Payment Program, CMS is proposing the following changes to previously-finalized policies for the 2018 Value Modifier:

  • Reducing the automatic downward payment adjustment for not meeting minimum quality reporting requirements from negative four percent to negative two percent (-2.0 percent) for groups of ten or more clinicians; and from negative two percent to negative one percent (-1.0 percent) for physician and non-physician solo practitioners and groups of two to nine clinicians;
  • Holding harmless all physician groups and solo practitioners who met minimum quality reporting requirements from downward payment adjustments for performance under quality-tiering for the last year of the program; and
  • Aligning the maximum upward adjustment amount to 2 times the adjustment factor for all physician groups and solo practitioners.

Comment Solicitation Only: Evaluation and Management Services

Physicians and other practitioners bill patient visits under a set of codes that distinguish whether the patient is new or established, the level of complexity, and the site of care.  These codes are Evaluation and Management (E/M) visit codes. Practitioners must maintain documentation in the medical record to support they have reported the appropriate level of E/M visit code. CMS maintains guidelines that specify the kind of information that is required to support Medicare payment for each level. There are three key components to selecting the appropriate level:

  • History of Present Illness (History);
  • Physical Examination (Exam); and
  • Medical Decision Making (MDM).

CMS agrees that their current guidelines are potentially outdated and need to be revised, especially the history and exam components.  They are seeking comments from stakeholders on specific changes to update the guidelines, reduce the associated burden, and to better align E/M coding and documentation with current practices.

Emergency Department Visits

CMS is seeking comment regarding whether emergency department visits are undervalued, due to increasing cultural, social, biological and other differences under which emergency department visits are furnished and changes within the patient population.





Kirk Delperdang is a Healthcare Director at Lutz with over 28 years of experience. He provides healthcare enrollment services to clients with a focus on Medicare providers and reimbursement analyses. In addition, he is responsible for leading Lutz's cost report service line.

  • Healthcare Financial Management Association - Nebraska Chapter, Member
  • Nebraska Society of Certified Public Accountants, Member
  • Certified Public Accountant
  • BA in Accounting, University of Northern Iowa, Cedar Falls, IA
  • St. Vincent de Paul, Knights of Columbus, Member
  • Active in various youth sports leagues: Aldrich Elementary, Millard Athletic Association, Millard North Schools, Omaha FC, Skutt Catholic High School and YMCA


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