The Experts at Advis Navigate You Through These Changes

On July 29, 2019, the Centers for Medicare and Medicaid Services (CMS) released proposed updates to payment rates and regulations applicable to the Hospital Outpatient Prospective Payment System (OPPS) and updated payment policies, payment rates, and quality provisions for services furnished under the Medicare Physician Fee Schedule (PFS). Most of CMS’s proposals would take effect January 1, 2020.

Four key components of the proposed rules include:

  1. Requiring hospitals to disclose negotiated rates with third-party payers;

  2. Extending reimbursement cuts for 340B drugs through 2020;

  3. Reducing the supervision requirement for outpatient hospital therapeutic services from direct supervision to general supervision; and

  4. Establishing a prior authorization requirement for five categories of procedures.

Advis President and CEO, Lyndean Brick, and members of the Advis leadership team, provide insightful forecasts on how they see the new rules affecting the future of healthcare.
Lyndean Brick

Lyndean Brick, J.D
President and CEO

Growth in ASC Medicare Market. The proposed new rules will allow some total knee replacements, hip replacements and a number of coronary intervention procedures to be reimbursed in ambulatory surgical centers (ASCs). CMS’s proposal is largely based on clinical data that supports the provision of these services in ASC settings and is following the lead of Medicare Advantage payers that have stretched the bounds of the CMS inpatient-only list.

As a result, physician-owned ASCs will be stronger hospital competitors for the senior market. Watch for Medicare Advantage plans to continue to direct patients to ASCs for an even more expansive list of surgical procedures. Hospital systems will need a strong Medicare strategy to preserve present market share.

monica hon advis

Monica Hon, J.D.
Vice President

Apps will emerge as price transparency takes effect. The CMS is proposing that hospitals make public their standard charges (both gross charges and payer-specific negotiated charges) for all items and services online in a machine-readable format. Once this information is available for all American Medicare-certified hospitals, the data world will develop apps to provide comparisons and assist the consumer to find the best value for their healthcare needs. The availability of this information will open up to other service providers as well as to drug pricing. The consumer will demand, innovation will design and the best value will be found, at your fingertips.

Valerie Ford
Vice President

Enrollment Requirements for Opioid Treatment Programs. CMS’s proposed Medicare Physician Fee Schedule and Part B rules allow for the Medicare enrollment of opioid treatment programs (OPTs). While OPTs will follow a number of conventional enrollment rules and requirements now in existence, there will be OTP-specific enrollment variables that providers entering this sphere will have to anticipate.  For instance, certification of programs by Substance Abuse and Mental Health Services Administration (SAMHSA) will be a prerequisite for OTP enrollment and maintaining Medicare certification for providers.

New enrollment processes that are specific to a single provider/supplier type often present challenges for new and existing service providers. However, the importance of accurate enrollment from compliance, certification and reimbursement standpoints cannot be overstated.

Ryan Bailey

Ryan Bailey, J.D., C.H.C
Vice President

CMS rules remain unclear in its terms and definitions. CMS seeks to implement a sweeping price transparency regulation that will require hospitals to post online “standard charges” reflected within their chargemasters, charges or rates negotiated with every third-party payer, specific charges for 300 common “shoppable” services, and charges for loosely defined “service packages”. CMS acknowledges the extensive amount of data hospitals will need to publicly divulge, yet remains increasingly ambiguous in defining terms and requirements – what is a “payer-specific negotiated charge” or a “consumer-friendly format” anyway?  This opens the door for continued gamesmanship in compliance.  Last year, many providers did the bare minimum with respect to publishing charge information and also pushed the boundaries of “machine readable format”. Absent clarifications from CMS in the final rule, perhaps even step-by-step directions, Advis anticipates more of the same in CY 2020.  To avoid abrogating the purpose of an otherwise well-intended initial push for price transparency for the benefit of patients, CMS would be wise to heed providers comments this round.

Dan Avants, J.D.
Vice President

Reimbursement for non-traditional professional services. CMS will continue to shift to allow reimbursement for non-traditional professional services in the home, such as professional service reimbursement for home infusion therapy drugs and biologicals administered intravenously or subcutaneously via DME. Expect this to become the framework for in-home telehealth reimbursement and similar services to reduce the overall cost of care and improve patient satisfaction.

jake beechy idtf

Jake Beechy, J.D.
Senior Consultant

Price Transparency and Diagnostic Imaging. No longer will hospitals be able to provide patients with the bare minimum information regarding their expected costs. The proposed rule will most impact those “shoppable” services, such as imaging, that patients can plan in advance. The proposed rule will require hospitals to provide a list of specific costs for 300 shoppable services, 70 of which will be picked by CMS. Coupled with commercial payer trends that refuse to pay for hospital-based imaging and Medicare site neutral payments; the potential for hospital-based diagnostic imaging is beginning its descent, and IDTFs may become the viable alternative.

Michael French, J.D.
Senior Consultant

Reimbursement reduction for 340B drugs. The new OPPS proposed rule continues CMS’ efforts to significantly reduce reimbursement for separately payable 340B drugs. The proposed rule also clearly states HHS’ plan to appeal the previous court decision relating to the reductions included in the CY2018 and CY2019 rules. With the upcoming appeal unlikely to be decided and resolved in the near future, affected 340B hospitals should continue to factor in 340B reimbursement reductions into their budgets and strategic initiatives.

Interestingly, CMS is also seeking feedback on the most appropriate remedy for repayment to affected hospitals if its appeal is denied. Hospitals should meet internally with its finance, billing, and advocacy teams to determine the preferred structure of this repayment and provide comments to CMS accordingly. Advis can assist in ensuring these comments are written to have the maximum possible impact on CMS decision-making.

Preston Sisler, J.D.
Senior Consultant

Minimal Provider-Based Implications.  From a provider-based perspective, CMS is completing its two-year phase-in to reduce payment for clinic visits performed in grandfathered hospital outpatient departments to 40% of the OPPS.  This reduction was part of prior CMS rulemaking so it is not a huge surprise to hospitals.  However, it is noteworthy that CMS is proposing no further reductions in reimbursement for non-excepted hospital outpatient departments, which will remain at 40% of the OPPS.  CMS also did not propose to limit the expansion of services in grandfathered hospital outpatient departments, which had previously been considered on a number of occasions.  As such, several different provider-based strategies remain viable.

Robert Monroe

Robert L. Monroe, J.D., LL.M.
Vice President

A New Part B Benefit for Opioid Treatment. CMS has proposed regulations to establish a new Medicare Part B benefit for medication-assisted treatment of opioid use disorder. Legislation requires this program to be in place by January 1, 2020.

Preliminary CDC data suggests that the number of US overdose deaths in 2018 decreased for the first time since 1990. CMS’s Part B benefit for medication-assisted treatment for opioid disorder will seek to continue the trend seen in the preliminary data. Provider treatment for opioids and prescription practices must continue to change in light of the forgoing and opioid dependence will again be a campaign issue.  Providers must prepare for the Medicare rules as well as the mirroring policies from non-Medicare payers.

Ryan Yokley, J.D., MHA
Vice President

Increased patient confusion. CMS is proposing that all hospitals be required to make public a yearly list of the hospital’s standard charges for items and services provided by the hospital.  Charges are to be identified in conjunction with a common billing code. I predict that the price transparency of hospital charges will result in need for increased hospital resources allocated to patient/customer services. Meaningful use of increased information largely depends on the level of patient sophistication of those who assess the data. I foresee price transparency causing increased patient confusion and hospital’s being inundated with calls from patients.  As such, I predict many hospitals will commence outsourcing some of its patients’ services to specialized firms to address such matters.

amanda bogle 340b

Amanda Bogle, J.D.
Senior Consultant

Price Transparency Risks Higher Costs in Exchange for Patient Control. With the goal of greater transparency in health care, HHS has proposed that hospitals should be required to publicize all standard charges for common “shoppable” services. While transparency and patient-centric care is always a welcome change, price transparency may come at an unexpected cost. In the current market, hospitals are able to negotiate with payers to obtain favorable rates for their patients — rates which are kept close to the vest. It is this confidentiality that oftentimes keeps market rates low, although admittedly impeding a patient’s ability to make informed decisions while shopping for health care. However, once these rates are made public, hospitals that may have negotiated favorable rates lose their bargaining power and, as a consequence, may even cause rates to skyrocket across the board — a repercussion that goes against the very purpose behind the push for transparency.

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