Site-Neutral Reimbursement Impacts Wound Centers
What is it?
The site-neutral rule, in a nutshell, is the push by the Center for Medicare and Medicaid Services (CMS) to eliminate the “Technical” or “Facility” fee component paid to hospital-owned outpatient centers, including many wound care and hyperbaric medicine programs.
In 2015, the CMS eliminated the Technical fee to all new off-campus (i.e., more than 250 yards from the main hospital campus) outpatient centers, grandfathering in off-campus centers that had dropped bills before the November 2, 2015 deadline (exempted centers). This was step one. In the final rule released in 2018 for 2019, CMS decided to reduce the Evaluation and Management (E&M) Level reimbursement for all off-campus departments of the hospital, including exempted centers. This reduction only affects CPT code G0463. If you have an off-campus provider-based department of the hospital, you will now be reimbursed 70% of the OPPS rate for 2019 with further reduction down to 40% in 2020. See more details here.
Why Outpatient Departments?
Initially, CMS was concerned with the trend of hospitals purchasing physician practices and then turning the practices into outpatient departments charging technical fees with no change in services. The purpose of changing the reimbursement then became a way to save money for the Medicare program and also for the Medicare beneficiaries. This change - for just one code - will result in $380 million in savings for the Medicare program for 2019 and 30% savings per visit for the Medicare beneficiary.
Why Does It Matter?
This change may mean an average of $10,000 to $20,000 in reduced payments for the affected centers annually, however, CMS outlines exactly why we should be concerned. In a fact sheet released by CMS, they state: “CMS is exercising its authority to utilize a method to control unnecessary increases in the volume of covered hospital outpatient services by applying a Physician Fee Schedule (PFS)-equivalent payment rate for the clinic visit service when provided at an off-campus provider-based department (PBD) that is paid under the OPPS. The clinic visit is the most common service billed under the OPPS. Currently, Medicare and beneficiaries often pay more for the same type of clinic visit in the hospital outpatient setting than in the physician office setting.”
In the Federal Register, they also make it very clear that this is the first step. They are looking for creative methods to control the increasing cost for outpatient provider-based departments.
What Happens Now?
The American Hospital Association (AHA) has filed a lawsuit to block this section of the final rule. The AHA has a valid argument. Because of the Bipartisan Budget Act of 2015, which established the exempted off-campus, provider-based departments and the method of payment for them, it should take a Congressional Act to change that method of payment. This seems to be a classic executive branch overreach in power. It will need to make its way through the court system for resolution.
What To Do Now?
Right now, we wait. And if you are an off-campus wound care and/or hyperbaric medicine center, you will start receiving a reduction on your EM level visits. Your billing department needs to make sure that they are billing your G0463 code with a “PO” modifier. This modifier identifies your clinic as off-campus. This is also a good time to focus on all of your billing, coding, and documentation.
Personal Opinion: The Upside
If your wound center is considered “exempted,” or is on campus, it provides a competitive advantage in your market as well as a strong asset, both for your patients and your bottom line. It will be increasingly difficult to open newer centers if space is not available on campus for competing hospitals. Again, this is a good time to revisit your program’s operations and verify that it is operating optimally. Feel free to call us for a 20 Point Onsite Assessment if you need help.