July 14, 2020

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July 13, 2020

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CMS Proposes Amendments to Payments Furnished from Provider-Based Departments

As part of the CY 2017 proposed Hospital Outpatient Prospective Payment System rules (OPPS) the Centers for Medicare and Medicaid Services (CMS) released the long awaited proposed payment changes for items and services furnished from off-campus provider-based hospital outpatient departments (Proposed Rule). CMS’ Proposed Rule can be found here.

These proposed payment changes were necessitated by Congress’s passage of Section 603 of the Bipartisan Budget Act of 2015 (Section 603) last fall and evince CMS’ exceptionally narrow interpretation of that provision and threaten the ability of hospital providers to continue growing and expanding existing outpatient service capabilities, thereby constraining the services available to Medicare beneficiaries. Reshaping the Proposed Rule will take a concerted stakeholder effort, so we encourage all hospitals and interested stakeholders to submit comments to CMS. Moreover, to the extent you have any projects under development that would be impacted by the Proposed Rule, if finalized, or projects that are on hold as a result of Section 603, we strongly encourage you to reach out to Polsinelli so that we may assist you in developing a strategy to approach CMS and/or Congressional representatives to ensure your concerns are heard.

The Proposed Rule focuses on the implementation of Section 603 and does not address other downstream implications flowing from the Proposed Rule (e.g., impact on 340B status, cost reporting, etc.) or other areas of long-standing uncertainty, such as space and time-sharing. Within the confines of the Proposed Rule, CMS focused its efforts on developing and explaining its rationale for the proposed regulations surrounding the provision and billing of items and services from excepted and nonexcepted provider-based hospital outpatient departments (PBDs). An excepted PBD includes those off-campus PBDs in existence and billing for services prior to November 2, 2015, or otherwise exempted from Section 603 (e.g., dedicated emergency departments), while a nonexcepted PBD includes those off-campus PBDs that came into existence and billed for services on or after November 2, 2015.

© Polsinelli PC, Polsinelli LLP in CaliforniaNational Law Review, Volume VI, Number 193


About this Author


Colleen Faddick's practice includes advising clients regarding the structure of and relationships among health care providers and entities within the complex federal and state regulatory environment. Colleen focuses on Medicare and Medicaid reimbursement and enrollment issues and appeals, fraud and abuse and self-referral law issues, licensing and certification of health care entities, clinical trial compliance and agreements for sponsors and providers, medical device payment and manufacturer relationships with physicians. Colleen works with hospitals, large physician...

Bragg E. Hemme, Polsinelli PC, Medical Licensure Lawyer, State Hospital Regulatory Attorney

In order to assist health care clients address their targeted business concerns, Bragg Hemme draws on a wealth of practical experience and a solid understanding of the industry gained during her time as both external and internal counsel. Her experience includes advising clients regarding the complex and ever-changing federal and state regulatory environment. She focuses her practice on government payer concerns such as:

  • Medicare, Medicare advantage and Medicaid reimbursement

  • Enrollment issues and appeals

  • Licensure and certification

  • Regulatory compliance

  • Fraud and abuse 

  • Self-referral law issues

Julius W. Hobson, Jr., Polsinelli PC, Public Policy Attorney, Long Term Care Regulation Lawyer,
Senior Policy Adviser

Julius W. Hobson, Jr., strives to meet client public policy goals and objectives based upon the client needs and capabilities. Julius has more than 40 years’ experience in public policy, working both inside and outside of government. He has a deep-rooted understanding and compassion about the public policy process — both legislative and administrative. He primarily serves health care clients with particular emphasis on physicians, hospitals, home health, and long-term care providers. 

Ross E. Sallade, Polsinelli PC, Medicare Enrollment Lawyer, Diligence Reports Attorney

Ross Sallade provides value to clients by tackling the complex legal regulatory, operational, reimbursement and enrollment matters that others might be reluctant to handle. Ross does so by drawing upon specialized knowledge for each matter which enables him to quickly evaluate urgent issues and provide practical recommendations. He also leverages a unique skill set that enables him to identify and work with the right federal and state regulators to pinpoint the heart of the issue and make recommendations to reach appropriate resolution. His previous experience...

Kyle A. Vasquez, Polsinelli, Compliance Support Lawyer, Health Care Reform Attorney

Kyle Vasquez provides pragmatic legal and compliance support to a wide range of health care clients. He utilizes his background in health law and his prior experience as a health care consultant to develop creative approaches that address the unique challenges that health care providers face. Kyle works collaboratively with health care stakeholders to assist in identifying forward-thinking models that meet their financial and operational needs. Kyle represents a broad set of health care entities including multi-hospital health systems, community hospitals, FQHCs,...