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CMS Finalizes 2016 Hospital Outpatient Payment Rule

[January 1, 2016, AJHP News]

Kate Traynor

BETHESDA, MD 09 Dec 2015—The Medicare program expects to pay $133 million less for hospital outpatient services during 2016 than it paid in 2015, an overall decrease of 0.4%, the Centers for Medicare and Medicaid Services (CMS) announced on October 30.

The decrease in payments results largely from mandated adjustments and a correction to previously estimated packaged payments for laboratory tests, according to the annual update to CMS's hospital outpatient prospective payment rule.

Unchanged for 2016 is the use of the average sales price (ASP) plus 6% to reimburse hospitals for drugs and biologicals that are not packaged within an ambulatory payment classification (APC) group—also known as "separately payable" drugs and biologicals.

ASHP for several years has supported reimbursement for separately paid drugs and biologicals at no less than ASP plus 6%.

The ASP-plus-6% rate also applies to radiopharmaceuticals, clotting factors, and so-called pass-through drugs (new, high-cost products whose reimbursement rate is set by statute for up to three years).

CMS will provide pass-through payments for 38 drugs during 2016, including 32 drugs that were on the pass-through list for 2015. Twelve drug products from 2015 lost pass-through status for 2016.

Three medications that had pass-through status during 2015—bivalirudin injection, mitomycin ophthalmic solution, and abciximab injection—have been reclassified as supplies when used during specific surgical procedures. Starting on January 1, the payment for the three medications will be packaged into the APC for the specified procedures.

CMS will continue to pay a "furnishing fee" for items and services associated with the administration of clotting factors in outpatient settings. For 2016, the furnishing fee is $0.202 per unit, up from $0.197 per unit in 2015.

Two-midnight rule. The annual update included a promised clarification from CMS about how to apply the so-called two-midnight rule, a policy that was implemented during fiscal year 2014. The policy is used to determine when patients should be treated as outpatients—generally under observation status—or admitted as inpatients.

CMS's initial guidance on the policy stated that patients whose care is expected to span two midnights (i.e., 12:00 a.m. on two consecutive days) should be admitted as inpatients.

The outpatient final rule for 2016 defers to clinical judgment and states that a physician may sometimes properly determine that a short inpatient stay is necessary. Such exceptions to the two-midnight rule must be adequately documented, and each case is subject to review for medical necessity by the state's quality improvement organization (QIO).

ASHP, in comments on a draft version of the 2016 outpatient rule, supported the use of clinical judgment in determining exceptions to the two-midnight rule. ASHP also supported the role of QIOs, as opposed to recovery audit contractors or Medicare administrative contractors, in verifying medical necessity determinations.

Quality reporting. The final rule rescinds an earlier proposal by CMS to adopt a new hospital outpatient quality reporting program quality measure—the Emergency Department Transfer Communication (EDTC)—for payment determinations in 2019. This National Quality Forum (NQF)–endorsed quality measure focuses on avoiding communication problems when patients are transferred from an emergency department to another healthcare facility.

ASHP had supported the EDTC quality measure and also urged CMS to adopt at least one NQF-endorsed companion quality measure related to medication reconciliation. According to ASHP's written comments, these measures would "help assure that an accurate and current medication list, free of the potential for dangerous drug–drug, and/or drug–disease interaction, is communicated efficiently and precisely among healthcare professionals accountable for the patient's care."

In the final rule, CMS stated that it will consider the suggested medication reconciliation quality measures if the agency later reexamines adopting the EDTC measure or one similar to it.

CMS does not now require hospitals that participate in Medicare to perform medication reconciliation during discharge planning for patients being transferred to another healthcare facility. But that situation may change.

CMS on November 3 proposed to revise the discharge planning requirements for hospitals that participate in the Medicare and Medicaid programs. Among the proposed requirements is that hospitals perform a comprehensive medication reconciliation as part of the discharge process.

The proposed discharge planning requirements would not apply to "emergency-level transfers for patients who require a higher level of care," CMS stated.

Comprehensive APCs. CMS for 2015 reconfigured the classification scheme for comprehensive APCs (C-APCs) that pay for certain high-cost primary care services. The final rule adds nine new C-APCs, for a total of 34.

The C-APC system uses a single payment to reimburse hospital outpatient departments for the episode of care instead of issuing separate payments for items and services involved in the procedure.

According to CMS, drugs, biologicals, and radiopharmaceuticals that are not separately payable by statute or otherwise exempted by the agency are packaged into the C-APCs regardless of their cost.

 

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