The Centers for Medicare & Medicaid Services late today issued a final rule for calendar year 2016 for the hospital outpatient prospective payment and ambulatory surgical center payment systems. Under the rule, there is a net decrease in OPPS payments of 0.4%.This net decrease largely results from a 2.0 percentage point cut to the OPPS conversion factor intended to account for CMS’s overestimation of the amount of packaged laboratory payments under the OPPS for laboratory tests that were previously paid under the Clinical Laboratory Fee Schedule. AHA Executive Vice President Tom Nickels expressed disappointment with the negative update. “It is unfortunate that hospitals and the patients they serve are now left to deal with the consequences of CMS’ faulty math,” he said. “We continue to be troubled by CMS’ actuaries’ lack of transparency, which is untenable.” In addition, CMS finalized its proposal to alter its “two-midnight” policy so that certain hospital inpatient services that do not cross two midnights may be considered appropriate for payment under Medicare Part A if a physician determines and documents in the patient’s medical record that the patient required reasonable and necessary admission to the hospital. CMS makes no changes for stays that last at least two midnights. The agency also restates the changes it announced to its medical review strategy in the OPPS proposed rule – namely, CMS now requires Quality Improvement Organizations to conduct first-line medical reviews of the majority of patient status claims rather than the Medicare Administrative Contractors or Recovery Audit Contractors, which will focus only on those hospitals with consistently high denial rates. “Hospitals appreciate the certainty that stays of at least two midnights are inpatient, with stays of less than two midnights also considered inpatient based on physician judgment,” Nickels said. “We look forward to working with the [QIOs], which are not paid on a contingency fee basis like the bounty hunter RACs, and to a more fair auditing process.” As expected, CMS did not reverse the 0.2% payment cut associated with the two-midnight policy. For the outpatient quality reporting program, CMS removes one imaging utilization measure and adds one new measure that assesses radiation therapy dosing for certain cancer patients. AHA members will receive a Special Bulletin with further details on Monday.