2018 OPPS Proposed Rule: Early Release Not the Only Surprise

Original story posted on: July 17, 2017
Important news recently came from the Centers for Medicare & Medicaid Services (CMS) with the earlier-than-expected July 13 release of the Outpatient Prospective System (OPPS) proposed rule. The rule can be found in its entirety online at https://federalregister.gov/d/2017-14883.

Per CMS, “the proposed rule would revise the Medicare hospital (OPPS) and the Medicare ambulatory surgical center (ASC) payment system for CY 2018 to implement changes arising from our continuing experience with these systems and certain provisions under the 21st Century Cures Act (Pub. L. 114-255). The proposed rule would also update and refine the requirements for the Hospital Outpatient Quality Reporting (OQR) Program and the ASC Quality Reporting (ASCQR) Program.”

Market Basket

CMS proposes to update OPPS rates by 1.75 percent for 2018. The change is based on the projected hospital market basket increase of 2.9 percent, minus both a 0.4 percentage-point adjustment for multi-factor productivity and a 0.75 percentage-point adjustment required by law. After considering all other policy changes proposed under the OPPS (except for the 340B drug payment proposal), including estimated spending for pass-through payments, CMS estimates an overall impact of a 2.0 percent payment increase for hospitals paid under the OPPS in 2018.

Proposed Update to Inpatient-Only List

The Medicare inpatient-only list includes procedures that are only paid for under the hospital Inpatient Prospective Payment System (IPPS). Each year, CMS reviews this list to determine whether any procedures should be removed. For 2018, CMS proposed removing total knee arthroplasty. The proposed rule also seeks comment on whether partial and total hip arthroplasty should be removed. This change would impact outpatient surgery operations and other clinical areas. From a coding perspective, this would require a CPT surgical code being assigned for these procedures, which previously have been inpatient-only and coded with ICD-10-PCS.

Supervision of Hospital Outpatient Therapeutic Services

In the 2009 and 2010 OPPS/ASC proposed and final rules, CMS clarified that direct physician supervision is generally required for hospital outpatient therapeutic services that are furnished in hospitals, critical access hospitals (CAHs), and in provider-based departments of hospitals. For several years, there has been a moratorium on the enforcement of the direct supervision requirement for CAHs and small rural hospitals, with the latest moratorium expiring on Dec. 31, 2016. In this proposed rule, CMS is proposing to reinstate the non-enforcement of direct supervision enforcement instructions for outpatient therapeutic services for CAHs and small rural hospitals with 100 or fewer beds for 2018 and 2019.

Other Key Areas of OPPS

There are many components and areas of the proposed rule that are important to review, including the following:

  • Payment for Drugs and Biologicals (“Drugs”) Purchased with a 340B Program Discount
  • Proposed Packaging of Low-Cost Drug Administration Services
  • Comment Solicitation on Packaging
  • Proposed High-Cost/Low-Cost Thresholds for Packaged Skin Substitutes
  • Potential Revisions to the Laboratory Date of Service Policy
  • Partial Hospitalization Program (PHP) Rate Setting
Open Door Forum

CMS will be hosting an Open Door Forum tomorrow, Wednesday, July 19 at 2 p.m. EST, and one of the topics will be the 2018 hospital Outpatient Prospective Payment System proposed rule highlights. This forum is a conference call that is open to the public. To participate, call by phone 1-800-837-1935 and use reference conference ID No.  59214429. Persons participating by phone do not need to RSVP.


CMS will accept comments on the proposed rule through Sept. 11, 2017, and there are specific instructions contained within the proposed rule itself for submission. In addition, CMS is releasing a request for information (ROI) within the proposed rule to solicit ideas for regulatory, policy, practice, and procedural changes to better achieve transparency, flexibility, program simplification, and innovation. This will inform the discussion on future regulatory action related to hospital outpatient services and services performed in ambulatory surgical centers.
Disclaimer: Every reasonable effort was made to ensure the accuracy of this information at the time it was published. However, due to the nature of industry changes over time we cannot guarantee its validity after the year it was published.
Gloryanne Bryant, RHIA, CDIP, CCS, CCDS, AHIMA-Approved ICD-10-CM/PCS Trainer

Gloryanne Bryant is an independent health information management (HIM) coding compliance consultant with more than 40 years of experience in the field. She appears on Talk Ten Tuesdays on a regular basis and is a member of the ICD10monitor editorial board.

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