CMS aligns hospital outpatient reimbursements with physician fee schedule

In the 2019 Hospital Outpatient Prospective Payment System (HOPPS) Final Rule, the Centers for Medicare & Medicaid Services (CMS) capped payment for clinic visits provided in all off-campus provider-based departments (PBDs) at a rate equivalent to the Physician Fee Schedule (PFS).

Given the 22% growth of the number of Evaluation and Management (E/M) visits over a 3-year period (2012-2015) and the shift in clinical visits from physician offices to higher-cost, outpatient sites of care, CMS began monitoring the billing for E/M services. The Medicare Payment Advisory Commission (MedPAC) simultaneously shared recommendations that differences in payment rates should be reduced or eliminated over the course of a few years. CMS reviewed the potential cost savings and a potential reduction in beneficiary cost-sharing liability that would result from reducing or eliminating the payment rates and created a Healthcare Common Procedure Coding System (HCPCS) modifier to help understand the growing trend toward hospital acquisition of physician offices, which were being converted to off campus PBDs.

CMS found that PBDs, under the Hospital Outpatient Prospective Payment System (OPPS), were being reimbursed $75 – $84 more than physician offices for provision of the same services. Therefore, CMS has finalized a proposal to cap the OPPS payment at the PFS-equivalent rate for nonexcepted items and services furnished by nonexcepted PBDs. CMS anticipates that this new policy will control volume and reduce costs, while also reducing the copayment required from patients.

CMS plans to phase in the reduction in payment to PBDs over two years. Based on a two-year phase-in of this policy, half of the total 60% payment reduction, a 30% reduction, will apply in 2019. PBDs also will be required to report the G0463 HCPCS code, along with the PO modifier.  Non-PBD sleep facilities will not be affected by this change. The difference in reimbursement is displayed below:

2018 OPPS Reimbursement and Copayment
$116 reimbursement/$23 patient copayment

2019 OPPS Reimbursement and Copayment
$81 reimbursement/$16 patient copayment

2020 OPPS Reimbursement and Copayment (equivalent to PFS reimbursement)
$46 reimbursement/$9 patient copayment

A CMS fact sheet provides more details about the changes finalized in the 2019 HOPPS Final Rule.

Visit the Coding and Reimbursement page for additional resources. Members also may send questions to coding@aasm.org.