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CMS to Once Again Reprocess Outpatient Clinic Claims

Client Alert
November 11, 2021

Overview:

The Hospital Outpatient Prospective Payment System (OPPS) Rule was passed in November 2018, which was intended to prevent the Centers for Medicare and Medicaid Services (CMS) from paying more for services rendered in outpatient settings than what they paid for the same services rendered in physician offices that are simply owned by hospitals or health systems.[1]

The Rule set payment rates for these services at “excepted” off-campus provider-based departments (those facilities that were excepted from reimbursement reductions under the Bipartisan Budget Act of 2015) at the same rate for non-excepted provider-based departments (PBDs) pursuant to the Physician Fee Schedule (PFS). However, in 2019, the reimbursement rate for services at these excepted facilities was set at 70%, and in 2020, just 40%.[2]  

The American Hospital Association (AHA) then sued CMS in the U.S. District Court for the District of Columbia in 2019 over the reimbursement reductions, and the Court ruled in favor of the AHA. As a result of the decision, CMS reprocessed the 2019 claims at the full 100% rate.[3]

Reprocessing Claims:

In 2020, however, the U.S. Court of Appeals for the D.C. Circuit reversed the district court’s decision. Pursuant to the reversal, starting November 1, 2021, CMS will once again begin reprocessing claims at excepted PBDs for outpatient claims to ensure that the services are reimbursed at the 70% rate for services rendered between January 1, 2019, and December 31, 2019.[4]

Conclusion:

As a result, excepted PBD providers will now have to refund the difference in coinsurance either to patients or insurers who paid an increased amount in cost-sharing when reimbursement was set at 100%, to reflect the reduction.[5]

CMS notes that providers do not need to take any other action as they reprocess claims.[6]  But providers should be aware of this reprocessing.

If you have any questions about how reprocessing will work or questions regarding issuing refunds, please contact Healthcare and Hospital Law Member Amanda Waesch at alwaesch@bmdllc.com. Special thanks to Rachel Stermer for her assistance in this client alert.

[1] CMS, Outpatient Clinic Visit Services at Excepted Off-Campus Provider-Based Departments: Payment Update, (Sept. 9, 2021) https://www.cms.gov/outreach-and-educationoutreachffsprovpartprogprovider-partnership-email-archive/2021-09-09-mlnc#_Toc82072549.

[2] Id.

[3] Id.

[4] Id.

[5] Id.

[6] Id.

Healthcare and Hospital LawAmanda L. Waesch
Client Alert

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January 10, 2024On January 9, 2024, the U.S. Department of Labor (DOL) issued its long-awaited final rule — effective March 11, 2024 — revising its prior interpretation of worker classifications under the federal Fair Labor Standards Act (FLSA). The new final rule rescinds the standard previously established in 2021, in turn, shifting the analysis of whether a worker is an employee (versus an independent contractor) of a business from a more streamlined “economic reality” test to a more complex “totality of the circumstances” standard.Client Alert

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January 5, 2024As required by House Bill 33, Ohio’s 2024-2025 operating budget bill, reimbursement rates paid by the Ohio Department of Medicaid will increase for a wide range of providers starting on January 1, 2024.Client Alert

Corporate Transparency Act Update

December 27, 2023The Corporate Transparency Act (“CTA”), with an effective date of January 1, 2024, is set to impose strict reporting guidelines on business owners throughout the country. The following provides a brief update on two aspects of the CTA ahead of its effectiveness next week.Client Alert

The Second Wave of UnitedHealthcare's Prior Authorization Cuts Started in November

December 11, 2023In August 2023, UnitedHealthcare released its plan to eliminate roughly one-fifth of its then-current prior authorization requirements. The first round of prior authorization cuts took effect on September 1, 2023. In that round, UnitedHealthcare eliminated the necessity for some prior authorizations for UnitedHealthcare Medicare Advantage, UnitedHealthcare commercial, UnitedHealthcare Oxford and UnitedHealthcare Individual Exchange plan members. The second and final round of prior authorization cuts began on November 1, 2023. The November 2023 Prior Authorization Cuts apply to the same plans as well as community plans (i.e., Medicaid managed care plans).
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