Late yesterday, the Centers for Medicare & Medicaid Services (CMS) issued the attached final rule updating the outpatient prospective payment system (OPPS) for calendar year 2018. CHA is extremely disappointed that CMS finalized its proposal to significantly cut Medicare payments to hospitals for drugs that are acquired under the 340B Drug Pricing Program. Specifically, CMS will pay separately payable, non pass-through drugs (other than vaccines) purchased through the 340B program at a rate of the average sales price minus 22.5 percent, rather than average sales price plus 6 percent. In a change from the proposed rule, CMS will exclude sole community hospitals in rural areas, prospective payment system-exempt cancer hospitals and children’s hospitals from this policy for calendar year 2018. Critical access hospitals are not subject to the OPPS, so they are not impacted by this policy.
CHA will work collaboratively with state and national hospital associations in a coordinated effort to reverse the policy. However, without additional legislative or administrative action, the policy will take effect Jan. 1, 2018, threatening access to care for our most vulnerable patients.
CMS also finalized its proposal to remove total knee arthroplasty from the inpatient-only list, which will allow for Medicare coverage of the procedure in either an inpatient or an outpatient setting. CHA opposed this proposal and will continue to monitor the policy’s implications for hospitals participating in the Bundled Payments for Care Improvement Initiative and Comprehensive Care for Joint Replacement (CJR) Program to inform future advocacy as the programs evolve. CHA continues to urge CMS to act quickly to change and finalize its episode payment model proposed rule so that hospitals in proposed voluntary markets for CJR can make decisions related to their participation in the program. Notably, CMS finalized its proposal to preclude recovery audit contractors from reviewing these claims for a period of two years.
On a more positive note, CMS finalized its proposals to reinstate the non-enforcement moratorium for critical access hospitals and small rural hospitals with 100 or fewer beds for 2018 and 2019, and will remove six quality measures from the Outpatient Quality Reporting Program. CMS also finalized proposed changes to its packaging policies, as well as payment for Partial Hospitalization Program services.
CMS also finalized an update to OPPS payment rates of 1.35 percent for calendar year 2018, reflecting a market-basket increase of 2.7 percent as well as a productivity cut of 0.6 percent, and an additional reduction of 0.75 percent required by the Affordable Care Act. CMS estimates the total impact of the final rule, after considering all other policy changes, will be an overall increase of 1.4 percent, or approximately $5.8 billion, in OPPS payments compared to calendar year 2017. CHA is currently reviewing the final rule and will provide members with a detailed summary in the coming weeks. A CMS fact sheet on the final rule is attached.
