December 9, 2018

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Budget Law Moves Towards Site-Neutral Medicare Payments

The recently enacted Bipartisan Budget Act (P. L. 114-74) included a provision that will significantly alter the future of hospital-based outpatient care.

The provision, Section 603, will exclude from Medicare’s outpatient hospital prospective payment system (“OPPS”) any new off-campus departments of a hospital, as determined by Medicare’s provider-based standards, unless it is a “dedicated emergency department” for EMTALA (the Emergency Medical Treatment and Labor Act) purposes.

Instead, those facilities will be reimbursed under a freestanding fee schedule, principally the Medicare physician fee schedule (PFS) or ambulatory surgical center prospective payment system (ASC PPS), which are generally lower than the OPPS. 

The purpose of Section 603 is to make Medicare reimbursement for ambulatory facilities “site neutral,” effectively banning OPPS reimbursement for many new off-campus provider-based departments.

The Congressional Budget Office (CBO) estimated that this provision will save the federal government $9.3 billion over 10 years by reducing Medicare reimbursements for many ambulatory services in hospital outpatient settings.

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Michelle Foley, Public Affairs, Foley lardner Law Firm
Public Affairs Adviser

Michelle Leeds is a public policy professional in the Government & Public Policy Practice and is on the Health Care Industry Team. Ms. Leeds has over a decade of experience in federal lobbying, legislative research, strategy and congressional procedures.

Ms. Leeds represents private and public sector clients before Congress and the federal government on a wide range of issues, including health care policy, telecommunications, defense, transportation, and energy. She assists clients with federal advocacy strategy and creates in-depth programs...

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Lawrence W. Vernaglia, Health Care Attorney, Foley Lardner Law Firm
Partner

Lawrence Vernaglia is a partner and health care lawyer with Foley & Lardner LLP and serves as chair of the firm’s Health Care Industry Team – named “Health Law Firm of the Year” for three of the past four years on the U.S. News - Best Lawyers® "Best Law Firms" list. Mr. Vernaglia represents hospitals, health systems and academic medical centers and a variety of other health care providers. Mr. Vernaglia's practice involves regulatory and transactional matters, including Medicare/Medicaid reimbursement compliance advice and appeals; mergers, acquisitions and financings; state regulatory issues including licensing, change of ownership, and CoN/DoN; survey/certification appeals; fraud & abuse/Stark law analyses; managed care contracting; and general corporate and business planning in health care. He runs strategic planning programs for senior management and governing boards. He regularly serves as local counsel on health care transactions in New England for multi-state projects.

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