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Proposed 2019 Medicare Outpatient/ASC Payment Policies

July 31, 2018

The Centers for Medicare & Medicaid Services (CMS) is continuing its push to equalize payment levels among different sites of care, particularly for identical services performed in physician offices and off-campus provider-based facilities run by hospital outpatient departments.


CMS outlined new efforts in its recent proposal to update rates and payment policies for hospital outpatient departments and ambulatory surgical centers (ASC) for calendar year 2019. It also proposed other payment changes on medical imaging, quality reporting, and interoperability.


Public comments are due by September 24, 2018, with a final rule expected in November.



Site Neutral Payments: CMS proposes paying for clinic visits at off-campus provider-based facilities run by hospital outpatient departments at 40% of the level such visits would be paid if performed in the actual hospital outpatient department. CMS also says it intends to use the lower-paying physician fee schedule rather than the hospital outpatient payment system to reimburse for any new services in 19 clinical areas that are offered by such off-campus facilities.


Payment Rates: CMS proposes to increase the hospital outpatient department payment rate by 1.25% in 2019. However, this would be largely offset by the site-neutral payment policies in the proposal.


  • ASC payment rates are proposed to increase 2% and, reflecting the CMS effort to equalize rates among different types of facilities, CMS is now using the same hospital market basket inflation rate in calculating payment increases in 2019 as it uses for hospitals. “This change will also help promote site-neutrality between hospitals and ASCs and encourage the migration of services from the hospital setting to the lower-cost ASC setting,” said CMS.


Price Transparency: CMS is asking for information and comment on whether providers and suppliers should be required to inform patients about charges and payment information on health care services and out-of-pocket costs.


Interoperability: CMS seeks comment on how to achieve better interoperability or sharing of data between providers. The agency also asks if it should revise its “conditions of participation” related to interoperability as a way to increase electronic sharing among providers.


Imaging APCs: CMS says, after reviewing the imaging APC groups, weights, and other factors, it will maintain the current structure of the seven imaging APCs. These include four levels of imaging without contrast and three level with contrast.


Cost-to-charge Ratio: CMS says that, for one more year, it will eliminate data from hospitals that allocate the costs of large moveable equipment, such as CT or MRI, on the basis of the square footage of the equipment. CMS uses cost-to-charge ratios in determining the APC weights and rates, and has urged hospitals to find a more accurate cost-allocation formula than the square-foot method. The agency says that it will probably not eliminate such data beyond 2020.


Quality Reporting: CMS plans to reduce the number of quality measures that hospital outpatient departments and ASCs must report. The agency says its rationale is that the measures are duplicative, most providers already perform them, or their costs outweigh their benefits.


Procedures Performed in ASCs: CMS says it will expand the number of procedures payable at ASCs, including certain cardiovascular procedures. The agency also says it wants to ensure that ASCs remain competitive by stabilizing the differential between ASC payment rates and those in hospital outpatient departments.

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