CMS releases OPPS, ASC proposed rule with changes to two-midnight policy

The Centers for Medicare & Medicaid Services late today issued a proposed rule for calendar year 2016 for the hospital outpatient prospective payment and ambulatory surgical center  payment systems. Under the rule, there would be a net decrease in OPPS payments of 0.2%. This net decrease largely results from a proposed 2.0 percentage point cut 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 Rick Pollack expressed disappointment with the negative update, saying AHA was “dismayed that miscalculations by the actuaries are resulting in penalties to hospitals and the patients they care for” and urged CMS to reevaluate the actuaries’ estimates. In addition, CMS proposes to alter its two-midnight policy so that certain hospital inpatient services that do not cross two midnights may be appropriate for payment under Medicare Part A if a physician determines and documents in the patient’s medical record that the patient requires reasonable and necessary admission to the hospital as an inpatient. CMS does not propose any changes for stays that are expected to last more than two midnights. The agency also proposes changes to the related enforcement requirements, proposing to use Quality Improvement Organizations to conduct first-line medical reviews of the majority of patient status claims rather than Medicare Administrative Contractors or Recovery Audit Contractors, which would focus only on those hospitals with consistently high denial rates. However, CMS does not propose to reverse the 0.2% payment cut associated with the two-midnight policy. Pollack called the proposals a “good first step,” saying hospitals “appreciate today’s proposal to maintain the certainty that patient stays of two midnights or longer are appropriate as inpatient cases.” However, he expressed dismay that CMS did not propose to withdraw the 0.2% cut and urged the agency to extend the partial enforcement delay beyond Sept. 30. AHA members will receive a Special Bulletin with further details tomorrow.