CMS proposes hospital outpatient prospective payment system changes

Today, the Centers for Medicare and Medicaid Services (CMS) proposed updated payment rates and policy changes in the Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System. Several of the proposed policy changes would improve the quality of care Medicare patients receive by better supporting their physicians and other health care providers. These proposals are based on feedback from stakeholders, including beneficiary and patient advocates, as well as health care providers, including hospitals, ambulatory surgical centers and the physician community.

“The items in this proposal are designed to improve care and value when Medicare beneficiaries receive care in an outpatient setting,” said Andy Slavitt, Acting CMS Administrator. “Today’s proposed updates better support physicians in providing beneficiaries with the right care at the right time.”

Addressing Physicians’ Concerns Regarding Pain Management
Today’s proposed rule would address physicians’ and other health care providers’ concerns that patient survey questions about pain management in the Hospital Value-Based Purchasing program unduly influence prescribing practices. While there is no empirical evidence of this effect, we propose to remove the pain management dimension from the Hospital Value-Based Purchasing program to eliminate any potential financial pressure clinicians may feel to overprescribe pain medications. CMS continues to believe that pain control is an appropriate part of routine patient care that hospitals should manage and is an important concern for patients, their families, and their caregivers.  Thus, CMS is also currently developing and field testing alternative questions related to provider communications and pain to include in the program in future years.  We will solicit comment on this alternative in future rulemaking.

Focusing Payments on Patients Rather than Setting
In addition, CMS is proposing policies to implement section 603 of the Bipartisan Budget Act of 2015, which provides that certain items and services provided by certain hospital off-campus outpatient departments would no longer be paid under the OPPS. Currently, Medicare pays for the same services at a higher rate if those services are provided in a hospital outpatient department, rather than a physician’s office. This payment differential has encouraged hospitals to acquire physician offices in order to receive the higher rates. This acquisition trend and difference in payment has been highlighted as a long-standing issue of concern by Congress, MedPAC, and the Department of Health and Human Services Office of Inspector General. This difference in payment also increases costs for the Medicare program and raises the cost-sharing liability for beneficiaries.

Congress addressed this issue through the Bipartisan Budget Act of 2015, and CMS proposes implementation details in today’s proposed rule. CMS believes these proposed policies will help to ensure that Medicare beneficiaries – and the Medicare program – do not pay more for care simply because of the setting in which that care was received.  The CMS Office of the Actuary estimates that these changes should reduce OPPS spending by approximately $500 million in 2017.  CMS sought comment and feedback from stakeholders during the development of this proposed rule, and CMS encourages further feedback during this proposal’s comment period.

Improving Patient Care through Technology
CMS is supporting physicians and other providers through today’s rule by increasing flexibility for hospitals and critical access hospitals that participate in the Medicare electronic health records (EHR) Incentive Program. Earlier this year, CMS conducted a review of the Medicare EHR Incentive Program for clinicians as part of our implementation of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), with the aim of reconsidering the program so we move closer to achieving the full potential health information technology (IT) offers. Based on that review, CMS streamlined EHR reporting requirements under the proposed rule to implement certain provisions of MACRA to increase flexibility and support improved patient outcomes.

Today, we propose taking a similar step for hospitals and critical access hospitals participating in the Medicare EHR Incentive Program. These changes include a proposal for clinicians, hospitals, and critical access hospitals to use a 90-day EHR reporting period in 2016 – down from a full calendar year for returning participants. This increases flexibility and lowers the reporting burden for hospital providers.

Emphasizing Health Outcomes that Matter to the Patient
Finally, CMS proposes to add new quality measures to the Hospital Outpatient Quality Reporting Program and the Ambulatory Surgical Center Quality Reporting Program that are focused on improving patient outcomes and experience of care. Other changes in the proposed rule would enhance the outcome requirements for organ transplant programs, so that the programs may help more beneficiaries accept more grafts, while maintaining compliance with Medicare standards for patient and graft survival.

CMS estimates that the updates in the proposed rule would increase OPPS payments by 1.6 percent and ASC payments by 1.2 percent in 2017.

To learn more about the proposed rule, please visit: CMS looks forward to feedback on the proposal and will accept comments until September 6, 2016. Comments may be submitted electronically through our e-Regulation website at:

A fact sheet on this proposed rule is available at: