LUGPA backs CMS plan for site-neutral pay for services

Chicago-Changes in the Medicare fee schedule, including plans to pay essentially the same amount for services whether performed in a hospital provider-based department (PBD) or in individual physician offices, were hailed as “significant wins” in a Health Policy Forum at the 2018 LUGPA annual meeting in Chicago.

The discussion took place a day after the Centers for Medicare & Medicaid Services (CMS) released its final fee schedule rule for 2019. It covered a number of key LUGPA objectives that Deepak A. Kapoor, MD, outlined ahead of the meeting for Urology Times. Dr. Kapoor is LUGPA’s health policy chairman.

The changes include a reduction in payment rates for hospital outpatient clinic visits at off-campus PBDs, bringing them in line with individual physician payments. This includes administration of 340B drugs and biologics.

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The rule, which will increase the Medicare Outpatient Prospective Payment System (OPPS) rates by 1.25% in 2019, will make payments for clinic visits site neutral by cutting the payment rate for outpatient clinic visits at PBDs to 40% of the OPPS rate. That plan is estimated to save the Medicare program and recipients a combined $760 million in 2019 and reduce overall OPPS payments by 1.2%.

Also included in the fee schedule rule are evaluation and management (E/M) changes, including consolidation of codes, designed to reduce burdens on clinicians-changes that LUGPA supported. 

“We’ve had a bunch of really significant wins for LUGPA that have happened in the last 12 to 24 hours,” said Mara R. Holton, MD, one of four LUGPA Health Policy Committee members participating in the forum. The others were Gary M. Kirsh, MD, John McManus, and Tracy Spicer, and the session was moderated by LUGPA President Neal D. Shore, MD.

Next: Site-neutral outpatient paymentsSite-neutral outpatient payments

LUGPA led a grassroots campaign designed to generate congressional support for making OPPS payments site neutral, said Dr. Kapoor, with the objective of eliminating the hospital reimbursement advantage for such services.

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“The new rule levels the payment so if patients see a doctor at a PBD, they will pay the same as if they saw an individual doctor next door,” he explained. “We instituted a massive letter-writing campaign by urologists to every member of Congress. We formed a coalition and generated congressional support. More than 8,000 letters were sent.”

Equalizing payments between PBDs and individual providers is about more than simple payment equity, or even about saving millions of dollars, according to LUGPA.

The higher payment rates that have been afforded PBDs has been a major contributor to the trend of hospitals purchasing physician practices, LUGPA has long contended. That is a development that has proven to be exceedingly costly to Medicare and its beneficiaries and runs contrary to policies expressed by Congress when it approved the Balanced Budget Act of 2015 (BBA).

That objective, CMS noted in its initial rulemaking implementing that law, was to “curb the practice of hospital acquisition of physician practices that result in receiving additional Medicare payment for similar services.”

Dr. Holton called the reduction in the 340B hospital drug program “a significant initiative to reduce the exemption that allowed the hospitals to generate residual cash pools.”

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“That has real implications for the amount of monies available for hospitals to deploy for a variety of things, but significantly as it pertains to us, for the acquisition of independent physician practices,” she said.

Next: Proposed E/M changesProposed E/M changes

The rule calls for the consolidation of E/M codes, so that the rate for level 1 and 5 visits will be preserved and levels 2 through 4 will be compressed. The consolidation of codes will be phased in and delayed until 2021.

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“Interestingly, urology was recognized as one of the specialties that had a cognitive element,” Dr. Holton said. As a result, she said, a G modifier has been included “that enables you to expand the value of that code in our setting.” Dr. Holton said more information on the G modifier would be forthcoming from LUGPA.

The panelists noted that LUGPA mostly stood on its own among subspecialty groups in support of the fee schedule changes and was essentially aligned with CMS’s initiatives.

“LUGPA did stand out in terms of their comments; the rest of the house of medicine is not particularly thrilled with this result,” Spicer said. “So I think we should be fully expecting to be having to defend this position moving forward for the next several years.”

In its rule, CMS also said in a statement that it is finalizing a number of other policies on E/M codes for calendar year 2021 that are aimed at reducing administrative burden.

ASC payment update

The OPPS also include metric changes affecting the way ambulatory surgery centers (ASCs) are compensated. After considerable

lobbying, CMS announced that ASCs will receive the hospital markup basket payment update, McManus said. That results in a 1% increase compounded annually, essentially stopping the erosion of ASC payments in relation to that of hospitals.

“When you look at the totality of things CMS is doing with our help and our grassroots pressure, it’s moving us to much better parity with the hospitals. And I think it’s going to be very important to keep our independent practices independent,” McManus said.

Dr. Kirsh pointed out that the significant changes taking place at CMS can be largely attributed to the White House.

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“What we have seen is a change in tone at CMS that has occurred as a result of the change in the administration,” he said. “The [Trump] administration is on a charge to reduce regulations throughout many agencies, and we’ve seen a change in tone at CMS. Elections and change of administration make a difference.”