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Proposed Medicare 2018 Outpatient, Physician, ASC Payments

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July 17, 2017

Payments to hospital outpatient departments, ambulatory surgery centers, and physicians will rise in 2018 under regulations recently proposed by the Centers for Medicare & Medicaid Services (CMS).  The proposals would apply to reimbursement for treating Medicare patients during calendar year 2018.



  • Payments:  CMS would increase payments for hospital outpatient departments by 2% in 2018 and for ambulatory surgery centers by 1.9%. Payment rates for physicians would increase about 0.31%. 


  • Telehealth: Several services would be added to the list of those eligible to be furnished via telehealth:
    • Counseling to determine eligibility for low-dose CT lung cancer screening;
    • Health risk assessment;
    • Planning for chronic care management;
    • Crisis psychotherapy; and
    • Interactive complexity during a psychiatric evaluation.


To reduce administrative burden, CMS would no longer require physicians to report the telehealth modifier on payment claims.


  • Chronic care management: CMS proposed to adopt CPT codes for several care management services now being reported using Medicare G-codes. The agency is also seeking comments on ways it might further reduce the reporting burden for chronic care management services.
    • Under the proposal, rural health clinics and federally-qualified health centers would be paid extra for chronic care management.


  • Appropriate use: In calendar year 2019, CMS would begin implementing a law requiring physicians to consult appropriate use criteria (AUC) when ordering advanced diagnostic imaging services. But CMS would consider this an educational and operations-testing year to give providers more time to prepare.
    • Physicians would be required to start using AUC and reporting this information on their claims, but CMS would pay claims whether or not such information was included. 
    • CMS is also seeking comments on whether the program should be delayed beyond the proposed 2019 start date.


  • Site Neutral Payments: For 2018, reimbursement for certain hospital outpatient departments that acquire off-campus physician practices would be reduced by half from the 2017 rates, which were themselves reduced by 50% and paid under the less-lucrative physician fee schedule, not the outpatient payment system. The agency grants exceptions:
    • If the facility is within 250 yards of a hospital remote location.
    • If the facility is a dedicated emergency department.
    • If the care was billed before November 2, 2015.


CMS has said that higher payments under the outpatient payment system have encouraged hospitals to acquire physician offices in order to receive the higher outpatient rates.


  • Diabetes Prevention: CMS would continue to implement the Diabetes Prevention Program, a dedicated exercise, diet, and weight-loss program designed to reduce diabetes. The agency outlined the payment structure and supplier rules for the program.


CMS will accept comments on the 2018 proposed Physician Fee Schedule until September 11, 2017, with a final rule expected in November, 2017.  The agency will also accept comments on the 2018 proposed Hospital Outpatient Department and Ambulatory Surgery Center proposal until September 11, 2017, with a final rule also expect in November, 2017.

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