As it continues to roll out final payment rules for 2019, the US Centers for Medicare and Medicaid Services (CMS) is sticking to its pattern of mostly following through on its original proposals—this time by ending payment rates that favor hospital-owned outpatient facilities over independent physicians' offices, and adopting a new supplier bidding system for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS).

Outpatient Prospective Payment System (OPPS)
As it proposed, CMS will expand the use of a "site-neutral" payment model in its reimbursement for the clinic visit service (HCPCS G0463), the most common service billed under the OPPS. Currently, Medicare and beneficiaries often pay more for the same type of clinic visit in the hospital outpatient setting than in the physician office setting. CMS is doing away with the current system that pays so-called "off-campus" hospital-owned facilities an estimated $75 to $85 more than it does independent counterparts for this service. According to a CMS fact sheet, the agency estimates that the change, implemented over a 2-year period, will save an estimated $380 million in 2019 alone. The change does not directly affect physical therapists (PTs) working in outpatient hospital settings, given that outpatient therapy services delivered by PTs are paid under the physician fee schedule, not OPPS.

Also final-as-proposed: a CMS decision to make separate payments for nonopioid pain-management drugs that function as a supply when used in an ambulatory surgical center (ASC) procedure.

Overall, OPPS rates will increase by 1.35% in 2019, with a 2.9% market basket update offset by a 0.8% productivity adjustment and a 0.75% adjustment related to the Affordable Care Act (ACA). ASC payment will increase by 2% and in the future will be updated based on the hospital market basket update instead of the "consumer price index-urban all item" system, a change that will remain until 2023 at the earliest.

Although not reflected in the final rule, during the public comment period on the OPPS proposed rule, CMS asked for input on issues including wound care, price transparency, and the opioid crisis as it relates to outpatient services. APTA provided comments in all 3 areas, advocating for better promotion of and payment for nonopioid approaches to pain management, a collaborative approach to price transparency that emphasizes consumer education, and careful attention to wound care reimbursement recommendations provided by the Alliance of Wound Care Stakeholders, of which APTA is a member.

Resources:
CMS fact sheet on OPPS final rule
Complete OPPS final rule

DMEPOS
The biggest news in the DMEPOS arena is the CMS decision to move ahead with its proposal to use "lead item pricing" as a way to improve competitive bidding for DMEPOS. The system eliminates the need for suppliers to submit multiple different bids on items in a product category—instead, they can anchor bids to an item with the highest Medicare-allowed charges in a product category, folding in services and equipment directly related to providing the item (as appropriate). CMS hopes this "composite bid" approach will simplify the bidding process and ease burdens on suppliers.

APTA generally supported the proposal but shared concerns with CMS over creating lead pricing categories that are overly large, including an unwieldy range of DMEPOS. In response, CMS assured commenters that the system would be built around "discrete categories of like items that are generally provided together to address a beneficiary’s medical needs." CMS also assured APTA and other commenters that the lead pricing system would not allow suppliers to win bids on categories that they do not cover in full.

In a second move supported by APTA, CMS followed through on a proposal to continue to apply a 50/50 blend of adjusted and nonadjusted reimbursement rates to "noncontiguous areas"—primarily Alaska and Hawaii. In its comments to CMS, the association urged the agency to consider the challenges faced by rural and noncontiguous areas when it comes to distances that must be covered to receive or provide care. CMS said that those challenges had been factored into its final rule.

Resources:
CMS fact sheet on DMEPOS final rule
Complete DMEPOS final rule