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Congress, CMS Seek Input on Provider-Based Reimbursement Reductions

Late last year, Congress made sweeping changes to Medicare provider-based reimbursement that virtually shut down any future off-campus, provider-based site developments. Section 603 of the Bipartisan Budget Act of 2015 (BBA) contained legislation that eliminates hospital outpatient perspective payment system (OPPS) reimbursement as of Jan. 1, 2017, for off-campus facilities that were not billed under the OPPS prior to Nov. 2, 2015.

What you need to know:

  • The House Energy and Commerce Committee is seeking formal feedback from providers by Feb. 19, 2016 regarding off-campus provider-based reimbursement reductions contained in Section 603 of the Bipartisan Budget Act of 2015 (BBA).

  • CMS will release its proposed BBA-related guidance in July 2016.

  • Providers are encouraged to submit comments to CMS on implementation of the BBA prior to release of its proposed rule in July 2016.

Congress passed Section 603 with little input from the provider community and with virtually no notice to providers that were in the process of building new off-campus departments. Given the severity of the changes in the BBA, stakeholders continue to advocate for changes to the BBA’s language, including requests for additional exemptions from the imminent reimbursement reductions.

In light of criticism and other feedback received from the provider community, several members of Congress have requested formal input from stakeholders. Energy and Commerce Committee Chairman Fred Upton and Health Subcommittee Chairman Joseph Pitts issued a letter that solicits input “on policies that the Committee should examine in the context of both the enactment of [the BBA], as well as other changes to site neutral payment policies.”

Providing Feedback

The Committee did include a caveat that recommendations that result in greater beneficiary or Medicare spending should include other suggestions that result in budget-neutral reform or additional savings to the Medicare program. It is clear that Congress has its sights set on reduced provider-based reimbursement as a mechanism to reduce overall Medicare spending, but this is still an opportunity for organizations to advocate for change. The time is now to apply pressure to ensure that the end result of Section 603 of the BBA is a reasonable compromise. We suggest that stakeholders advocate for more robust grandfathering provision that includes an exemption for sites under development at the time the BBA was enacted.

Also, during a recent Hospital Open Door Forum, a CMS official indicated that providers should expect formal guidance regarding Section 603 of the BBA in late June or early July as CMS intends to include BBA-related guidance in its CY 2017 OPPS proposed rule. Contrary to requests from providers and other advocates, CMS does not intend to issue a separate BBA proposal. We anticipate CMS will issue its CY 2017 OPPS / BBA final rule in late 2016 leaving very little time to adapt to CMS’ guidance before reimbursement reductions take effect on Jan. 1, 2017. In the event that CMS’ final rule requires Medicare enrollment changes or other filings to accommodate the BBA, this may present timing problems given the Jan. 1, 2017, reimbursement changes.

CMS is also seeking comments and ideas regarding exemptions and other operational issues that it should consider as it develops the BBA portion of its CY 2017 OPPS proposed rule. Stakeholders can submit ideas to [email protected]. Providers should submit comments to CMS as soon as possible. Potential topics include clarification on the applicability of the BBA to sites under development as well as the impact of changes of ownership, relocations, site expansions, service changes, etc. on grandfathered sites.

© Polsinelli PC, Polsinelli LLP in CaliforniaNational Law Review, Volume VI, Number 53

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...

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