Despite a ruling from a federal judge earlier this year, the United States Centers for Medicare and Medicaid Services (CMS) has moved forward with site-neutral payments for doctor’s visits in the 2019 Outpatient Prospective Payment System (OPPS) changes.
Changes to Provider Payments
The OPPS will update the wage index used to pay providers, which will likely benefit rural providers who have requested higher reimbursements to make up for the higher expenses they face when providing care. OPPS will also pay doctors the same amount for a basic visit, regardless of whether it takes place in a hospital outpatient facility or in a private doctors office.
CMS has estimated that this change will cut copays for Medicare beneficiaries and cut federal spending by $800 million in 2020. This is as least due in part to the fact that visits to outpatient clinics are more expensive than physician clinic visits and shifting the visits to an equal, lower, cost could save money.
Changes to the 340B Program
As we have previously reported, the 2019 OPPS also cuts drug payments to safety-net hospitals under the 340B program by changing the reimbursement formula, thereby reducing reimbursement to hospitals that qualify for prescription drug discounts. By way of reminder, CMS is continuing the ASP minus 22.5% rate for 2020. The program will be cut by $1.6 billion in budget neutral cuts, as Medicare plans to use the drug savings to pay hospitals for additional services.
Litigation regarding this change is currently winding its way through the courts. Several associations and companies had lobbied CMS to abolish 340B payment cuts in the program arguing that it may impede access to care and increase the regulatory burden.
In the annual proposed rule, CMS noted that it did believe its 340B payments for 2018 and 2019 were lawful and appropriate, but also asked for input on how to manage if the federal appeals court upholds the lower court ruling that the reimbursement rates were unlawful. CMS has previously proposed making any remedial adjustments necessary for the 2018, 2019, and 2020 years, proposing a rate of ASP plus 3% as an appropriate remedial rate.
“By plowing ahead with damaging cuts to hospitals in the 340B drug pricing program and ignoring clear congressional intent by expanding cuts to grandfathered provider-based outpatient clinics, CMS undermines the foundation of care for the nation’s most vulnerable people,” said Beth Feldpush, senior vice president of policy and advocacy for America’s Essential Hospitals. “The agency also prolongs confusion and uncertainty for hospitals by maintaining unlawful policies it has been told to abandon in clear judicial directives.”