The Centers for Medicare and Medicaid Services (CMS) published the proposed hospital outpatient prospective payment system (OPPS) payment rule for calendar year (CY) 2017 in the July 14, 2016 Federal Register. A key proposal in the rule is to implement Section 603 of the Bipartisan Budget Act of 2015 (also known as the Site Neutral Payments Provision), which provides that certain hospital off-campus outpatient departments would no longer be paid under OPPS. Currently, Medicare pays for the same services at a higher rate if those services are provided in a hospital outpatient department, rather than a physician’s office. This payment differential has encouraged hospitals to acquire physician offices in order to receive the higher rates. This acquisition trend and difference in payment has been highlighted as a long-standing issue of concern by congress, the Medicare Payment Advisory Commission, and the Department of Health and Human Services Office of Inspector General.

In addition, based on concerns raised by health care providers on the patient experience survey questions about pain management, CMS is proposing to remove the pain management dimension of the Hospital Consumer Assessment of Healthcare Providers and Systems survey, for purposes of the Hospital Value Based Purchasing Program. The goal is to eliminate any potential financial pressure clinicians may feel to overprescribe pain medications.

CMS has also included a provision to increase flexibility for hospitals that participate in the Medicare electronic health records (EHR) incentive program. Earlier this year, CMS conducted a review of the Medicare EHR Incentive Program for clinicians as part of the implementation of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), with the aim of reconsidering the program so we move closer to achieving the full potential that health information technology offers. Based on that review, CMS streamlined EHR reporting requirements under the proposed rule to implement certain provisions of MACRA, to increase flexibility and support improved patient outcomes. CMS is proposing to take a similar step for hospitals participating in the Medicare EHR Incentive Program. These changes include a proposal for clinicians, hospitals, and critical access hospitals to use a 90-day EHR reporting period in 2016 (down from a full calendar year for returning participants). This increases flexibility and lowers the reporting burden for hospital providers.

Finally, CMS proposes to add new quality measures to the Hospital Outpatient Quality Reporting Program that are focused on improving patient outcomes and experience of care. Other changes in the proposed rule would enhance the outcome requirements for organ transplant programs, so that the programs may help more beneficiaries accept more grafts, while maintaining compliance with Medicare standards for patient and graft survival.

CMS estimates that the updates in the proposed rule would increase OPPS payments by 1.6 percent. Comments on the proposed rule will be accepted through Tuesday, September 6, 2016.