Medicare Outpatient Final Rule Released for 2018

Posted on November 02, 2017

The Centers for Medicare & Medicaid Services (CMS) released a final rule Nov. 1 to update the Medicare fee-for-service outpatient prospective payment system (OPPS) for 2018. Highlights of the final rule include:

  • Significant payment reductions for drugs acquired under the 340B drug discount program. The CMS is reducing the payment for drugs from the average sales price (ASP) plus 6 percent to ASP minus 22.5 percent. In a change from the proposed rule, sole community hospitals in rural areas and children’s hospitals are exempt from this policy for 2018. The CMS is shifting $1.6 billion in annual payments through a 3.19 percent increase in the OPPS conversion factor to maintain budget neutrality.  
  • A net 4.85 percent OPPS payment increase when the 340B budget neutrality adjustment, marketbasket update and other adjustments are considered, resulting in a conversion factor of $78.64, up from $75.00 for 2017.  
  • Reinstatement of the moratorium on the direct supervision requirement for outpatient therapeutic services at critical access hospitals and rural hospitals with 100 or fewer beds for 2018 and 2019.
  • Removal of six quality measures from the hospital outpatient quality reporting program for 2020 payment determinations.
  • Removal of total knee arthroplasty (TKA) and five laparoscopy procedures from the inpatient-only list, which will allow these procedures to be payable in the outpatient setting. The CMS is precluding the Recovery Audit Contractors from conducting “site of service” reviews of outpatient TKA procedures for two years.
  • Maintenance of the existing methodology for partial hospitalization program (PHP) rate setting. The methodology established in 2017 provides a single payment rate for hospital outpatient departments and Community Mental Health Centers for days when three or more PHP services are provided.

Featured in Monday Report. Click to view the full edition. The MHA will provide members with additional detail on the final rule, including an updated hospital-specific impact analysis. Unless otherwise noted, provisions of the final rule take effect Jan. 1, 2018. Members with questions should contact Marilyn Litka-Klein at the MHA.



Tags: Medicare, OPPS, 340B Drug Pricing Program, CMS, FFS

Posted in: Member News

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