CMS Final Rule Updates Outpatient Payment Rates, Revises Off-Campus Payments

November 2, 2016

The Centers for Medicare and Medicaid Services (CMS) recently finalized its updated payment rates and policy changes in the Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System for 2017. The rule also revised how off-campus provider based hospitals will be paid for services.

“We spoke to stakeholders across the outpatient community who care about the quality and value of care that Medicare patients receive,” Sean Cavanaugh, MPH, deputy administrator and director of the Center for Medicare at CMS, said in a press release. “The policies finalized in today’s rule will not only improve the value of care provided to Medicare beneficiaries, but are also responsive to health care providers who are crucial to outpatient care.”

According to the press release, CMS estimates that the updated final rule will increase OPPS payments by 1.7%, and ASC rates by 1.9%.


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CMS also intends to finalize policies to ensure that certain items and services furnished by certain off-campus hospital outpatient departments will no longer be paid under the OPPS beginning in 2017. Under the current payment system, hospitals have an incentive to acquire physician offices in order to receive higher rates. This payment difference increases costs for the Medicare program, and raises the cost-sharing liability for beneficiaries.

Under the new rule, hospitals providing off-campus services will be paid under the physician fee schedule at new rates established by CMS.

Based on comments from stakeholders, CMS finalized proposed limitations on relocation of “excepted” off-campus hospital outpatient departments, but makes a modification to allow flexibility to accommodate instances of special circumstances that are outside a hospital’s control, such as natural disasters. CMS is not finalizing its proposed limitation on expansion of services.

CMS also announced they will issue an interim final rule with comment period to establish new payment rates under the Medicare Physician Fee Schedule for the items and services provided by certain off-campus provider-based departments for 2017. This rule will allow hospitals to be paid for services that may no longer be paid under the OPPS, which CMS believes will reduce incentives for hospitals to acquire physician independent practices.

According to the press release, “these finalized policy changes will improve the quality of care Medicare patients receive by better supporting their physicians and other health care providers and reflect a broader Administration-wide strategy to create a health care system that results in better care, smarter spending, and healthier people.”

Julie Gould



Centers for Medicare and Medicaid Services. CMS Finalizes Hospital Outpatient Prospective Payment System Changes to Better Support Hospitals and Physicians and Improve Patient Care [press release]. Published November 1, 2016. Accessed November 2, 2016.