CMS finalizes site-neutral payment policies

The Centers for Medicare and Medicaid Services (CMS) has released its final payment rates for 2017 under the Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System. The updates include policy changes—the so-called site-neutral rule—that will impact the reimbursement rates for off-campus locations.

Prior to the rule, certain outpatient/ambulatory settings within a campus were paid at a higher rate than a physician office located off campus. Now, off-campus facilities will be reimbursed at the same rate for the same service.

The policy was born from a 2013 MedPAC report that showed Medicare costs were almost 1.5 times higher for some services performed in an off-campus location than the same service performed in a physician office. In 2015, the site-neutral revisions were added to the Bipartisan Budget Act.

“Currently, Medicare pays for the same services at a higher rate if those services are provided in a hospital outpatient department rather than a physician’s office. This payment differential has provided an incentive for hospitals to acquire physician offices in order to receive the higher rates,” noted the agency’s announcement.

But the rule is unpopular with acute care providers, who argue the new reimbursement parameters will make it difficult to operate off-site facilities and maintain high-quality care services.

Pamela Tabar

Pamela Tabar was editor-in-chief of I Advance Senior Care from 2013-2018. She has worked as a writer and editor for healthcare business media since 1998, including as News Editor of Healthcare Informatics. She has a master’s degree in journalism from Kent State University and a master’s degree in English from the University of York, England.