CMS Issues OPPS and ASC Final Rule Updating Medicare Policies and Payments.

Date posted: December 1, 2016

The Centers for Medicare & Medicaid Services (CMS) recently issued a final rule revising the Hospital Outpatient Prospective Payment System (OPPS) and the Ambulatory Surgical Center (ASC) Payment System for Calendar Year 2017.  The final rule implements payment provisions of the Bipartisan Budget Act of 2015, and issues updated payment rates and policies to support providers in improving overall patient care.

As part of the final rule, CMS finalized its proposal that certain off-campus provider-based departments (PBDs) would be permitted to continue to bill for excepted items and services under the OPPS, including services provided:

  • By a dedicated emergency department;
  • By an off-campus PBD that was billing for covered outpatient services furnished prior to November 2, 2015, (i.e., the date of enactment of Section 603 of the Bipartisan Budget Act of 2015); and
  • In an on campus PBD, defined as a PBD within 250 yards of the hospital or a remote location of the hospital.

CMS noted that the exception will not apply to off-campus PBDs that change location, barring an extraordinary reason for the location change, such as a natural disaster.  CMS will approve change in location exemptions on a case-by-case basis.  CMS also indicated that Medicare will pay those PBDs not meeting the above exceptions under the  Medicare Physician Fee Schedule, rather than the OPPS.

Other key highlights of the final rule include:

  • CMS will update OPPS rates in accordance with projected hospital market basket adjustments to increase payments by 1.65 percent in 2017;
  • CMS will finalize a proposal to create 25 additional Comprehensive Ambulatory Payment Classifications (C-APCs) that would provide encounter-level payments for designated primary procedures and related secondary services;
  • Medicare will update payment rates for certain services furnished under the Partial Hospitalization Program;
  • CMS will remove the pain management dimension of the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey; and
  • The electronic health record (EHR) reporting period will become a continuous 90-day period for all eligible hospitals and professionals demonstrating meaningful use in the EHR Incentive Programs.

CMS will accept comments on the final rule through December 31, 2016.

The final rule is available at:

The CMS fact sheet is available at:

Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; Organ Procurement Organization Reporting and Communication; Transplant Outcome Measures and Documentation Requirements; Electronic Health Record (EHR) Incentive Programs; Payment to Nonexcepted Off-Campus Provider-Based Department of  Hospital; Hospital Value-Based Purchasing (VBP) Program; Establishment of Payment Rates Under the Medicare Physician Fee Schedule for Nonexcepted Items and Services Furnished by an Off-Campus Provider-Based Department of a Hospital; Final Rule, 81 Fed. Reg. 79562, 79562-79892 (Nov. 14, 2016).

Centers for Medicare & Medicaid Services.  “CMS Finalizes Hospital Outpatient Prospective Payment Changes for 2017.”  Fact Sheet.  1 Nov. 2016.

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