November 2017

November 2017

FORHP’s Policy Team is ready to answer any questions you may have about these updates at

Calendar Year (CY) 2018 Final Rule for Quality Payment Program

On November 16, 2017, the Centers for Medicare & Medicaid Services (CMS) published the final rule for the second year of the Medicare Quality Payment Program (QPP). The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) established QPP for Medicare clinician payment. 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). 

Of note for rural providers, this rule:

  • Increases the low-volume threshold, exempting clinicians with less than or equal to $90,000 in Medicare Part B billings or 200 or fewer Medicare Part B beneficiaries;
  • Gives solo practitioners and small practices the choice to form or join a Virtual Group to participate with other practices (election period open now until December 31, 2017)
  • Adds five bonus points to the final scores of small practices
  • Gives up to five bonus points on your final score for treatment of complex patients
  • Continues to award small practices 3 points for measures in the quality performance category that don’t meet data completeness requirements
  • Does not finalize at this time a MIPS “opt-in” for exempt clinicians in future years, but seeks further comment on implementing a low-volume opt-in policy
  • Clarifies that CMS will furnish performance feedback to eligible clinicians and groups that do not meet the definition of a MIPS eligible clinician, but voluntarily report on measures and activities under MIPS (e.g., rural health clinics (RHCs) and federally qualified health centers (FQHCs))

The interim final rule with comment period establishes an automatic extreme and uncontrollable circumstance policy for the 2017 MIPS performance period that recognizes recent hurricanes (Harvey, Irma and Maria) and other natural disasters can effectively impede a MIPS eligible clinician’s ability to participate in MIPS

The provisions of this final rule with comment period and interim final rule with comment period are effective on January 1, 2018. Comments are due by January 1, 2018. For more information, please see the fact sheet

New Medicare Physician Payment Model Proposals

MACRA creates the Physician-Focused Payment Model Technical Advisory Committee (PTAC) to make comments and recommendations to the Secretary of the Department of Health and Human Services on proposals for physician-focused payment models (PFPMs) submitted by individuals and stakeholder entities. PTAC has posted four new proposals from provider groups with new ways that Medicare could pay physicians. The proposals include: wound care in private outpatient clinics, delivering acute care in the home, improving transitions from ERs and bundling payments for headache care. Each addresses how these approaches could benefit Medicare beneficiaries in rural areas. Comments are due November 20 for headache care and ER transitions proposals. Comments for wound care and acute care in the home are due November 30.

For more information on the PTAC and the proposals, please visit the website.  

CY 2018 Final Rule for Physician Fee Schedule (PFS)

On November 15, 2017, CMS published a final rule to make annual updates to clinician payment under the Medicare PFS for 2018. In addition to policies affecting the calculation of payment rates, this final rule identifies potentially misvalued codes, adds procedures to the telehealth list and finalizes a number of new policies.

Significant policies for rural providers include:

  • Adding new care coordination billing codes for rural health clinics (RHC)/federal qualified health centers (FQHC): General Care Management-G0511 and Psychiatric collaborative care model-G0512
  • Detailing policies to implement the Medicare Diabetes Prevention Program expanded model starting in 2018
  • 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
    • CPT codes 90839 and 90840 psychotherapy for crisis
  • Eliminating the required reporting of the telehealth modifier
    • Because institutional claims do not use a place of service (POS) code, CMS will allow distant site practitioners billing under CAH Method II to continue to use the GT modifier on institutional claims
  • Updating beneficiary assignment policies for RHCs and FQHCs in Medicare Shared Savings Program (MSSP) accountable care organizations (ACO) by removing the attestation requirement
  • Reducing current PFS payment rates for non-excepted off-campus provider-based hospital departments paid under the PFS by 20% - paying 40% of the OPPS rate.
    • This differs from what was proposed (paying 25% of the OPPS rate)

This final rule is effective January 1, 2018. For more information, please see the fact sheet.

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

On November 13, 2017, CMS published the final rule updating annual policy and payment rates for facilities paid under the OPPS and ASC Payment System. Overall, compared to CY 2017, this year’s rule changes increase CY 2018 OPPS payment by 1.4%, or $640 million. Changes led to higher estimated increases at rural hospitals (2.7%) compared to urban hospitals (1.3%). In addition, payment will increase to ASCs by roughly 3%, or $130 million, and to community mental health centers (CMHCs) by 17.2%.

Of note for rural providers, this final rule:

  • Reduces Medicare Part B reimbursement for separately payable drugs purchased through the 340B Drug Pricing Program from average sales price (ASP)+6% to ASP-22.5%
    • Applies only to OPPS-paid facilities; i.e., not CAHs
    • Exempts certain hospitals, which will continue to receive ASP+6%:
      • Rural sole community hospitals (SCH) (270, 20.2% of all OPPS hospitals participating in 340B)
      • Children’s hospitals (47, 3.5%)
      • PPS-exempt cancer hospitals (2, 0.15%)
  • Maintains the 7.1% payment adjustment for OPPS services and procedures performed at rural SCHs
  • Maintains implementation of the frontier floor policy, which requires a frontier state wage index of at least 1.00 for hospital outpatient departments (OPDs) and community mental health centers (CMHC)
  • Extends the OPPS imputed rural floor policy for one year through December 31, 2018 (for consistency with the one-year extension under IPPS)
    • Continues transfer of OPPS payments from (1) states with rural hospitals but no urban hospitals receiving the rural floor (i.e., all urban hospitals have wage indexes higher than rural hospitals) to (2) states where the imputed rural floor is applied, particularly three all-urban states in the Northeast (Deleware, New Jersey, Rhode Island)
  • Reinstates non-enforcement of the direct supervision requirement for outpatient therapeutic services performed at CAHs and small, rural hospitals (100 beds or fewer) for two years (2018 and 2019)
  • Adds total knee arthroplasty (TKA) to the Inpatient Only List (IPO), allowing Medicare to cover and pay for knee replacement procedures in both the inpatient and outpatient hospital settings

This final rule is effective January 1, 2018. For more information, please see the fact sheet.

CY 2018 Final Rule for Home Health PPS

On November 7, 2018, CMS published a final rule to update 2018 Medicare payment rates and policies for home health agencies (HHA). This rule finalizes an overall payment reduction to home health providers of -0.4% (-$80 million). Since this includes the statutory sunset of the rural add-on provision, most rural HHAs will experience a payment reduction of -2.5%.

Of note for rural providers, this final rule makes changes to the:

  • Home Health Quality Reporting Program, including removal of 235 data elements from 33 OASIS items collected at specific time points during a home health episode (effective with all HHA assessments on or after January 1, 2019)
  • Home Health Value-Based Purchasing Program, including increasing the minimum number of completed Home Health Care Consumer Assessment of Healthcare Providers and System (HHCAHPS) surveys from 20 to 40 beginning with payment year 1.

This final rule is effective January 1, 2018. 

CY 2018 Final Rule for End-Stage Renal Disease (ESRD) PPS

On November 1, 2017, CMS published a final rule to update 2018 Medicare payment rates and policies for dialysis facilities. The final rule provides a 0.5% overall payment rate increase; implements policies for dialysis services furnished to individuals with acute kidney injury (AKI) by dialysis facilities; and updates the ESRD Quality Incentive Program (QIP), including clarification of the minimum data requirements for PY 2020 and changes to the extraordinary circumstances exception policy.

Most rural dialysis facilities will experience the 0.3% payment increase, but 132 rural hospital-based dialysis facilities will experience a 0.4% payment increase. Looking forward to the future for dialysis facilities in rural areas, in payment year 2021, some of the changes to the ESRD QIP will result in estimated payment reductions for 325 rural facilities (-0.19%).

This final rule is effective January 1, 2018. For more information, please see the fact sheet.  

2019 Proposed Notice of Benefit and Payment Parameters for Health Insurance Marketplace

On November 2, CMS published a proposed rule to update the 2019 Benefit and Payment Parameters for the Federally-Facilitated Exchange (FFE) and the State-Based Exchanges that use the federal platform (SBE-FP) The rule includes proposals that would provide states with more flexibilities by:

  • Increasing options in how the essential health benefits (EHBs) are defined for their state
  • Enhancing states’ role in certifying qualified health plans (QHP) and reviewing accreditation requirements, compliance plans, quality improvement strategy reporting, and service areas
  • Allowing SBE-FPs to establish their own standards for network adequacy and essential community providers
  • Removing the requirements that each Exchange must have at least two Navigator entities, and that one of these entities must be a community and consumer-focused nonprofit group
  • Removing the requirement that each Navigator entity maintain a physical presence in the Exchange service area
  • Reducing regulatory burden for states and issuers by eliminating the requirement to post rate increases at a uniform time; exempting student health insurance coverage from the federal rate review process; reducing the advanced notification that states must give CMS about the posting of rate increases from 30 days to five business days; and increasing the default threshold for rate increases subject to review to 15% from 10%

CMS also seeks comment on additional areas of review for which it would be appropriate for the FFEs to rely on state reviews for QHP certification and seek comment from states on their interest in taking on a larger role in QHP certification in FFEs and any potential benefits and unintended consequences of this approach. 

Comments were due by November 27. For more information, please see the fact sheet.

State Medicaid Directors’ (SMD) Letter on Strategies to Address the Opioid Epidemic

On November 1, 2017, CMS issued an SMD letter describing a streamlined approach to working with states on Medicaid 1115 waivers that increase states’ ability to respond to the opioid crisis. CMS would like to use the 1115 waiver demonstration process as the vehicle for improving access to treatment for opioid use disorder and other substance use disorders because of the flexibility it gives states to implement best practices over a 5-year period while incorporating outcome metrics, conducting rigorous evaluations, and reporting progress in a timely manner on the website. CMS indicates that this cycle of evaluation and reporting will be critical to informing the response to the national opioid crisis. 

A key aspect of these waivers is that states will be able to receive federal matching for services to treat addiction, including services provided to Medicaid enrollees residing in residential treatment facilities. Ordinarily, such residential treatment services are not eligible for federal Medicaid reimbursement due to the exclusion in the Medicaid statute that bans states from using federal Medicaid dollars to fund patients' stays in institutions for mental diseases (IMDs) with more than 16 beds.

CMS also announced the approval of demonstrations in New Jersey and Utah under this new policy. For more information, please see the press release.

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.