July 2017

July 2017

The Federal Office of Rural Health Policy's (FORHP) Policy Team is ready to answer any questions you may have about these updates at RuralPolicy@hrsa.gov.

Calendar Year (CY) 2018 Proposed Rule for Quality Payment Program (QPP)

On June 30, 2017, the Centers for Medicare and Medicaid Services (CMS) published a proposed rule for the second year of the Medicare QPP. Under the QPP, eligible clinicians can participate via one of two tracks: Advanced Alternative Payment Models (APMs) or the Merit-based Incentive Payment System (MIPS).

Major proposals of interest to rural providers include: 

  • Exempting additional clinicians from MIPS by increasing the low-volume threshold for small practices, exempting clinicians or practices with less than $90,000 in Medicare Part B billing or fewer than 200 Medicare beneficiaries (currently set at $30,000 or 100 beneficiaries)
  • Adding a 5-point bonus to the MIPS score for small practices and another for complex patients (soliciting comments on a rural bonus), allowing federally qualified health centers (FQHC) and rural health clinics (RHC) that voluntarily report to opt-out of sharing their data on Physician Compare, clarifying policies for participation in MIPS virtual groups for clinicians in practices of 10 or fewer
  • Modifying the MIPS performance period to a 12-month calendar year for the quality and cost categories and 90-days for the advancing care information and improvement activities categories 
  • Maintaining the MIPS scoring criteria of a 60 percent weight for quality, 15 percent for improvement activities, 25 percent for advancing care information (with allowed reweighting of this category to 0 percent under certain circumstances) and 0 percent weight for cost in final score in 2020 (with comments on weighting the cost category at 10 percent) 
  • Proposing policies to identify “topped-out” quality measures using a cap of six points for a select set of six topped out measures and after three years to consider removal from the program through rulemaking in the fourth year

Of note for APMs, CMS

  • Extends the Advanced APM nominal amount standard through the 2020 performance year, which requires potential risk under the APM to be equal to at least 8 percent of the average estimated Parts A and B revenue of the participating APM Entities 
  • Gives more detail about how CMS will implement the All-Payer Combination Option for Advanced APM participation. This option would allow for Medicaid or private payers APMs. Proposals for such APMs could also be submitted to the Physician-Focused Payment Model Technical Advisory Committee (PTAC).

Comments are due by August 21, 2017.  A fact sheet is available on the CMS website for more information.

CY 2018 Proposed Rule for Physician Fee Schedule (PFS)

On July 13, 2017, CMS displayed a proposed rule to make annual updates to clinician payment under the Medicare PFS for 2018. Major proposals of interest to rural providers include:

  • Adding new care coordination services and payment for RHCs and FQHCs for regular and complex chronic care management services, general behavioral health integration services and psychiatric collaborative care model services using two new billing codes
  • Reducing current PFS payment rates for non-excepted off-campus provider-based hospital departments paid under the PFS by 50 percent
  • Adding seven new codes to the list of telehealth services – HCPCS code G0296 (visit to determine low dose computed tomography (LDCT) eligibility), CPT code 90785 (Interactive Complexity), CPT codes 96160 and 96161 (Health Risk Assessment), HCPCS code G0506 (Care Planning for Chronic Care Management); and CPT codes 90839 and 90840 (Psychotherapy for Crisis)
  • Eliminating the required reporting of the telehealth modifier due to redundancy with the place of service reporting requirement finalized in the CY 2017 PFS final rule 
  • Updating beneficiary assignment policies for RHCs and FQHCs participating in Medicare Shared Savings Program (MSSP) ACOs, removing the attestation requirement and instead treating a service reported on an RHC or FQHC institutional claim as a primary care service furnished by a primary care physician to reduce burden for ACOs and remove incentives to exclude FQHCs and RHCs in MSSP ACOs 
  • Detailing policies to implement the Medicare Diabetes Prevention Program (MDPP) expanded model starting in 2018, including the MDPP payment structure, additional supplier enrollment requirements, and supplier compliance standards to support program integrity

Comments are due by September 11, 2017.  A fact sheet is available for more information. More information on the MDPP is available at this link. 

CY 2018 Proposed Rule for Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System 

On July 13, 2017, CMS displayed a rule proposing annual policy and payment changes for hospitals paid under the OPPS and ASCs paid under the ASC Payment System. The CY 2018 proposed rule continues to move OPPS away from separate fee schedule-like payments toward prospectively determined encounter-based payments that package multiple interrelated services. CMS intends this to encourage providers’ efficiency and innovation as well as long-term cost containment. 

For ASCs, the proposed rule would increase aggregate ASC payments for CY 2018 by $67 million compared to CY 2017, including annual update of 1.9 percent.

For the OPPS, major policy proposals of note for rural providers include: 

  • Increases aggregate OPPS payments for CY 2018 by 1.9 percent, or $897 million, compared to CY 2017, including the outpatient department (OPD) fee schedule increase (1.75 percent) and $26.2 million in pass-through spending on drugs, biologicals and devices
    • No projected difference in payment increase for rural (+2.1 percent) or urban (+2.1 percent) hospitals
  • Maintains the 7.1 percent payment adjustment for OPPS services and procedures performed at sole community hospitals (SCHs) located in rural areas
  • Reinstates non-enforcement of direct supervision requirement for outpatient therapeutic services for CAHs and small rural hospitals with 100 or fewer beds for CYs 2018 and 2019
    • Reduces regulatory burden and allows more time for rural providers to comply with supervision requirements and/or submit specific services to the Advisory Panel on Hospital Outpatient Payment for recommended changes in supervision level
  • Continues implementation of the frontier floor policy for hospital outpatient departments and community mental health clinics (CMHC), which requires a frontier state wage index of at least 1.00
  • Ends the 3-year transition in wage index for rural hospitals and CMHCs formerly designated as urban
  • Reduces Medicare Part B reimbursement for separately payable drugs from average sales price plus 6 percent (ASP+6%) to ASP-22.5% (budget neutral), likely reducing drug payments by as much as $900 million for hospitals participating in the 340B program and increasing payments to other non-drug OPPS items and services by 1.4 percent
    • Does not affect CAHs as they are not paid under OPPS
    • Effective January 1, 2018, CMS proposes required use of a new claims modifier for drugs not purchased under 340B to gather more information on the true costs of drug acquisition
    • 22.5 percent is the MedPAC estimate of the average minimum discount received by 340B-participating hospitals
    • CMS solicits comment on (1) whether Medicare should require 340B-participating hospitals to report their drug acquisition costs in addition to charges for each drug on the claim, (2) whether exceptions should be granted to certain groups of hospitals (e.g., SCHs, PPS-exempt cancer hospitals) due to access to care issues, (3) whether other types of drugs should also be excluded from reduced payment (e.g., blood clotting factors, orphan drugs, etc.) and (4) whether hospital-owned or –affiliated ASCs have access to 340B-discounted drugs
  • Announces a new searchable website comparing estimated payment and copayment amounts for items and services paid under the OPPS and ASC payment system, per the 21st Century Cures Act 
  • Solicits ideas from the public for regulatory, sub-regulatory, policy, practice and procedural changes to reduce unnecessary burdens for clinicians, other providers, and patients and their families while also increasing quality of care, lowering costs, improving program integrity and making the health care system more effective, simple and accessible, particularly as related to incentivizing screening, assessment, and evidence-based treatment for individuals with opioid use disorder and other substance use disorders

Comments are due by September 11, 2017. See the CMS fact sheet for more information.

CY 2018 Proposed Rule for End-Stage Renal Disease (ESRD) Prospective Payment System (PPS)

On July 5, 2017, CMS published a proposed rule to update 2018 Medicare payment rates and policies for dialysis facilities. Proposals within the rule include an overall payment rate increase from CMS of $80 million, policies for coverage and payment for dialysis services furnished to individuals with acute kidney injury (AKI) by dialysis facilities, and updates to the ESRD Quality Incentive Program (QIP), including requirements for quality reporting and measurement and updating programmatic policies.  

Of note for rural providers, CMS indicates that most rural dialysis facilities will experience a 0.6 percent payment increase; however, the 132 rural hospital-based dialysis facilities will experience an estimated 0.7 percent decrease in payments. Additionally, in payment year 2021, some of the changes to the ESRD QIP will result in estimated payment reductions for 325 ESRD small entity (rural) facilities (-0.19 percent). 

The proposed rule also includes a Request for Information (RFI) to encourage continued feedback on improvements to the Medicare program including ideas for regulatory, sub-regulatory, policy, practice and procedural changes. 

Comments are due by August 28, 2017.  A fact sheet is available on the CMS website.

CMS Delays Rules for Home Health Agencies (HHA)

CMS has finalized its proposal to delay the effective date for the revised home health conditions of participation (CoPs) from July 13, 2017, to January 13, 2018. HHAs, industry associations and individuals submitted 48 comment letters stating their need for more time to prepare for the implementation of the new rules, including potential changes to staffing and infrastructure. In response, CMS has added an additional six months thereby giving HHAs one year from the publication of the new rules to prepare. Once effective, these new rules for HHAs participating in Medicare and Medicaid will incorporate recent advances and practices that focus on patient-centered, data-driven and outcome-oriented care. 

Of note for HHAs in rural areas facing physician shortages, the new conditions of participation allow licensed practical nurses acting within their state licensure and scope-of-practice requirements to receive verbal orders for home services.

Skilled Nursing Facilities (SNF) Now Eligible for Federal Communications Commission (FCC) Rural Health Care Program

On June 21, 2017, the FCC published a final rule that adds SNFs to the list of health care providers eligible to participate in the Rural Health Care Program as mandated by the Rural Healthcare Connectivity Act of 2016. This change is effective June 21, 2017, and allows nearly 4,500 rural SNFs to receive funding to improve access to telecommunications and broadband services necessary for the provision of post-acute care. More information can also found at this link.

This project is/was supported by the Health Resources and Services Administration (HRSA) of the U.S. Department of Health and Human Services (HHS) under grant number UB1RH24206, Information Services to Rural Hospital Flexibility Program Grantees, $1,100,000 (0% financed with nongovernmental sources). This information or content and conclusions are those of the author and should not be construed as the official position or policy of, nor should any endorsements be inferred by HRSA, HHS or the U.S. Government.