The final rule contained provisions to implement and refine comprehensive Ambulatory Payment Classifications (C-APCs) and expanded packaging to include additional ancillary diagnostic and therapeutic services. The final rule also adjusted the methodology for determining the high or low cost designation for packaging skin substitutes. While the finalized changes are on a much smaller scale compared to CY14 OPPS rulemaking (which represented the most significant overhaul of the system since CY08), CMS continued to emphasize larger payment bundles and consolidation of APCs as mechanisms to drive hospital efficiencies. Overall, CMS’ final policies were very much in-line with the proposed rule, with changes being relatively minor and infrequent.
OPPS Impact on Select Healthcare Groups:
Facilities: CMS updated Hospital Outpatient Department (HOPD) payments by 2.2 percent and ASC payments by 1.4 percent. Continued emphasis on encounter-based payments and expanded packaging will result in additional downward pressure on hospitals to reduce costs in order to maximize payments and avoid losses on individual cases (to a much smaller degree compared to last year’s rulemaking).
Life Sciences: CMS implemented C-APCs, postponed from CY14, with some refinements to the methodology and restructuring of underlying APCs. Payment for pass-through products and specified covered outpatient drugs will continue at Average Sales Price (ASP) + 6 percent. The packaging threshold for non-pass-through products is $95, a five dollar increase from the proposed rule. Packaged payment for skin substitutes continues to be segmented based on high or low cost, but the methodology was revised from an ASP-based determination to one based on weighted average mean unit cost (MUC). CMS also finalized last year’s exemption for packaging certain drug administration procedures, but hinted at a potential overhaul in the payment methodology for these services in future rulemaking.
Providers: This rule has no direct impact on physicians. With that said, physicians will continue to be integral to hospitals’ efforts to meet quality improvement metrics, and their roles as clinical decision makers will continue to intersect with how hospitals respond to the increasing pressures of expanded bundling.
New payment provisions will go into effect January 1, 2015.