Health Information Management

Congressional concern may not matter for OPPS negative payment adjustment

APCs Insider, October 23, 2015

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By Steven Andrews

Members of Congress have thrown their support behind providers in an effort to get CMS to reconsider its proposal to decrease OPPS payments for 2016 by 0.2% due to a billion dollar projection error, but it may be too late to make an impact.

On October 5, a bipartisan group of 95 members of the House of Representatives sent a letter to CMS Administrator Andy Slavitt urging the agency to back off the negative payment adjustment, which would pay hospitals $43 million less in 2016 than 2015.

Providers and industry groups, including the American Hospital Association, have rightly contested this decrease. The OPPS hasn’t seen a negative payment adjustment in its history, and the reasoning by CMS is difficult to follow.

CMS says OPPS costs rose $1 billion more than expected in 2014 because the agency overestimated the impact of laboratory packaging changes. Due to this, the agency moved too much money from the Clinical Laboratory Fee Schedule (CLFS) into the OPPS for packaging.

CMS also allowed separate payment of labs when reported with modifier –L1 (separately payable laboratory test), essentially paying double for many labs–first by packaging their costs into APC rates and second by making separate payment in CY 2014 through the CLFS.

But many providers commented to CMS during August’s Hospital Outpatient Payment (HOP) Panel meeting that confusion over modifier –L1 usage to determine “unrelated” tests severely impacted its use in 2014. Announced in March 2014, it took until July 2014 for CMS to implement the modifier. Prior to that, the process for determining whether to apply for separate payment was such an administrative burden that many providers didn’t use it for relatively inexpensive tests. 

Providers at the HOP Panel also asked CMS to make its data public regarding the payments in order for the industry to have a chance to examine it and respond accordingly. The members of Congress who sent the letter to CMS echoed that call.

Unfortunately, a week after the letter was sent, CMS had already completed its work on the 2016 OPPS final rule, making it unlikely the letter had any impact. CMS submitted the rule to the Office of Management and Budget for review, the final step before publication, October 13.

The final rule is expected to be published by the first week of November. For a comprehensive analysis of the rule, including whether CMS reconsidered its negative payment adjustment, listen to HCPro’s annual OPPS final rule webcast from 1–2:30 p.m. (Eastern) on Tuesday, December 8, featuring Jugna Shah, MPH, and Valerie A. Rinkle, MPA.

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