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November 2016


OPPS Provider-Based Final Rule —
A More Practical Approach From CMS







For more information about this e-Alert, please contact:


Colleen M. Faddick


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Lauren Z. Groebe


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Bragg E. Hemme


Email | Bio


Sarah R. Kocher


Email | Bio


Ross E. Sallade


Email | Bio


Kyle A. Vasquez


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CMS recently finalized sweeping changes to the way Medicare pays hospitals for services furnished in "new" off-campus provider-based departments (referred to as "off-campus PBDs").

CMS revealed the changes on November 1 with the publication of the CY 2017 OPPS Final Rule (the "Final Rule"), which implements Section 603 of the BBA. Section 603 included revisions to payment for off-campus PBDs developed on or after November 2, 2015. A copy of the Final Rule can be found here. Section 603 is discussed on pages 79699 – 79729.

While rulemaking is constrained by the requirements of Section 603, CMS seems to have heard the concerns of stakeholders and has reversed course on a number of problematic proposals contained in its Proposed Rule.

Click here to view highlights of the Final Rule.

Additionally, this alert covers:

  1. The new payment regulations will take effect on January 1, 2017—no delay.

  2. Dedicated Emergency Departments are exempt from Section 603.

  3. PBDs within 250 yards of a remote location of a hospital are exempt from Section 603.

  4. Relocation of currently exempt off-campus PBDs billing prior to November 2, 2015 permitted in narrow circumstances.

  5. CMS will permit excepted off-campus PBDs to expand the services they provide.

  6. CMS finalized its policy that excepted status for an off-campus PBD transfers to new ownership only if ownership of the main provider, as well as its provider agreement, are also transferred.

  7. CMS will not require hospitals to modify their enrollment data to separately identify their off-campus PBDs.

  8. CMS is adopting the MPFS as the "applicable payment system" required under Section 603 for nonexcepted items and services.

  9. For CY 2017, CMS published an Interim Final Rule permitting hospitals to bill for nonexcepted items and services on the institutional claim form using the line modifier "PN".

  10. The Interim Final Rule creates a payment framework to reimburse hospitals directly for nonexcepted items and services, on an institutional claim, at rates based on the MPFS.

  11. The Interim Final Rule applies to payment in CY 2017 and likely to CY 2018; changes may be in store for CY 2019.

To view the full alert, please click here.

For More Information

If you have questions regarding this alert, please contact the author, a member of Polsinelli's Health Care Practice, or your Polsinelli attorney.







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