CMS releases final OPPS rule for 2018: 8 things to know

CMS has released its final 2018 Medicare Outpatient Prospective Payment System rule, which cuts payments to hospitals under the 340B Drug Pricing Program and authorizes Medicare to reimburse for knee replacement surgeries performed in outpatient facilities.

Here are eight things to know about the 1,133-page final rule. 

Payment update

1. CMS will increase OPPS rates by 1.35 percent in 2018. The agency arrived at the rate increase through the following updates: a positive 2.7 percent market basket update, a negative 0.6 percent update for a productivity adjustment, and a negative 0.75 percent update for cuts under the ACA.

2. After considering all other policy changes in the final rule, CMS estimates OPPS payments to providers will total $70 billion next year, an increase of about $5.8 billion from 2017.

340B program changes

3. CMS finalized a proposal to pay hospitals 22.5 percent less than the average sales price for drugs purchased through the 340B program. That's compared to the current payment rate of average sales price plus 6 percent. The current payment rate will continue for vaccines, and sole community hospitals in rural areas, children's hospitals and prospective payment system-exempt cancer hospitals will be excluded from this payment adjustment for 2018.

4. CMS is implementing this policy in a budget-neutral manner by offsetting the projected $1.6 billion decrease in drug payments by redistributing an equal amount for non-drug items and services within the OPPS.

5. Regarding the payment cuts, American Hospital Association Executive Vice President Tom Nickels said, "CMS' decision in today's rule to cut Medicare payments to hospitals for drugs covered under the 340B program will dramatically threaten access to healthcare for many patients, including uninsured and other vulnerable populations. We strongly urge CMS to abandon its misguided 340B rule, and instead take direct action to halt the unchecked, unsustainable increases in the cost of drugs."

6. The AHA is joining two other hospital lobbying groups — America's Essential Hospitals and the Association of American Medical Colleges — in a lawsuit against CMS over the payment cuts for 340B drugs. 

Update to inpatient-only list

7. The Medicare inpatient-only list includes procedures that are only paid for under the Hospital Inpatient Prospective Payment System. Each year, CMS reviews the list to determine whether any procedures should be removed from or added to the list. For 2018, CMS is removing total knee arthroplasty from the IPO list. CMS also removed five other procedures from the IPO list and added one.  

Hospital Outpatient Quality Reporting Program changes

8. Under the final rule, CMS is removing six measures from the Hospital Quality Reporting Program for the 2020 payment determination and subsequent years. The measures CMS is removing are:

  • OP-1: Median time to fibrinolysis
  • OP-4: Aspirin at arrival
  • OP-20: Door to diagnostic evaluation by a qualified medical professional
  • OP-21: Median time to pain management for long bone fracture
  • OP-25: Safe surgery checklist use
  • OP-26: Hospital outpatient volume data on selected outpatient surgical procedures


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