CMS releases final site neutral and other payment rules

By | November 3, 2019

The Centers for Medicare and Medicaid Services has finalized major policy changes including a controversial decision to move forward with site neutral payments and to make cuts to the 340B drug program.

CMS will complete a two-year phase-in of site neutral payments for clinic visits to off-campus hospital outpatient settings, despite a district court ruling earlier this year that went against the cuts. The agency said it is evaluating its options to appeal.

“We acknowledge that the United States District Court for the District of Columbia vacated the volume control policy for CY 2019 and we are working to ensure affected 2019 claims for clinic visits are paid consistent with the court’s order,” CMS said.  “We do not believe it is appropriate at this time to make a change to the second year of the two-year phase-in of the clinic visit policy. The government has appeal rights, and is still evaluating the rulings and considering, at the time of this writing, whether to appeal from the final judgment.”

The final rule for the outpatient prospective payment system saves Medicare an estimated $ 800 million for 2020, CMS said.

Beneficiaries could expect to see lower copayments. With the completion of the two-year phase-in, the cost sharing would be reduced to $ 9, saving beneficiaries an average of $ 14 each time they visited an off-campus department for a clinic visit.

In the 340B program, CMS finalized 2020 Medicare Part B rates that will make a 28.5% payment reduction to hospitals in the 340B drug pricing program. A federal district court ruled these payment cuts for 2018 and 2019 were unlawful.

The government has appealed these decisions, and oral arguments are scheduled for November 8. 

CMS finalized the physician fee schedule rule which includes adjustments to the use and evaluation and management codes in physician reimbursement, beginning in 2021. In the final rule, CMS is increasing payment for office and outpatient E/M visits as well as providing enhanced payments for certain types of visits in which physicians spend more time treating the growing number of patients with greater needs and multiple medical conditions.

This is projected to save 2.3 million hours in physician burden reduction per year, CMS said.

In addition, the final rule improves the Quality Payment Program by streamlining requirements for clinicians to participate in CMS’s pay-for-performance program, the merit-based incentive payment system (MIPS).

The new framework, the MIPS Value Pathways will begin in the 2021 performance period. It moves MIPS from its current state, which requires clinicians to report on many measures and activities across the multiple performance categories, to a program that allows clinicians to pick which clinically-related, specialty-specific measurement sets on which to report.

Read More:  9 diet rules this celebrity personal trainer lives by

Under this framework, patients will be able to compare clinician performance on these measures, as well as on a standard set of claims-based population measures such as readmissions, and interoperability measures.  In this way, clinicians will be held accountable for fewer but more meaningful measures, CMS said.

CMS also changed requirements of physician assistants to give PAs greater flexibility to practice without the supervision of a physician, in accordance with state law and state scope of practice.


Currently, hospital outpatient facilities are paid more for a clinic visit than physicians for the same type of service in their offices.

Hospitals that rely on 340B funds have been losing millions since 340B payment reductions first took effect on Jan. 1, 2018, opponents of the rule said.


CMS has made several recent payment changes, including for kidney drugs, and for durable medical equipment.

Yesterday’s announced rules included policies to expand access to opioid use disorder treatment services furnished by opioid treatment programs.

The opioid treatment program policy changes in the Medicare Part B benefit was mandated under the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act that President Trump signed into law on Oct. 24, 2018, CMS said.

Other finalized policies are consistent with directives in President Trump’s executive order, “Protecting and Improving Medicare for Our Nation’s Seniors.” 


Providers and others were quick to react to the final rule.

Tom Nickels, executive vice president of the American Hospital Association, said, “Today’s final rule from CMS regrettably ignores recent legal decisions while also putting even more pressure on hospitals and health systems that care for vulnerable patients and communities. The final rule’s continued payment cuts for hospital outpatient clinic visits not only threatens access to care, especially in rural and other vulnerable communities, but it goes against clear congressional intent to protect the majority of clinic services.”
There are many real and crucial differences between hospital outpatient departments and the patient populations they serve and other sites of care, Nickels said.

“Now that a federal court has sided with the AHA and found that these cuts exceed the Administration’s authority, CMS should abandon further illegal cuts. Instead, as we urged in a letter to the Department of Justice yesterday, CMS should promptly repay the affected hospitals the full OPPS rate to support the work they do for the patients they serve. And CMS should pay the full OPPS rate for all clinic visit claims going forward.”

Read More:  Becoming a Digital Grandparent

Also, the 340B cuts should be restored, he said.

“After previous cuts to the 340B program were ruled illegal and overturned in court because they exceeded the Administration’s authority, continuation of that policy is wholly unwarranted,” he said.

Dr. Beth Feldpush, senior vice president of Policy and Advocacy for America’s Essential Hospitals said, “By plowing ahead with damaging cuts to hospitals in the 340B Drug Pricing Program and ignoring clear congressional intent by expanding cuts to grandfathered provider-based outpatient clinics, CMS undermines the foundation of care for the nation’s most vulnerable people. The agency also prolongs confusion and uncertainty for hospitals by maintaining unlawful policies it has been told to abandon in clear judicial directives.”

The nation’s essential hospitals operate with barely positive margins, Feldpush said, and essential hospitals will continue to challenge policymaking that puts access to care at risk.
American Medical Association President Dr. Patrice A. Harris said physicians spend a huge amount of time meeting burdensome documentation requirements which takes time away from patients and contributes to physician burnout and professional dissatisfaction.

“Now it’s time for vendors and payors to take the necessary next steps to align their systems with E/M (evaluation/management) office visit code changes by the time the revisions are deployed on January 1, 2021,” she said. In the coming months, the AMA will undertake an aggressive effort to ensure that EHR providers, coders, payors and other vendors implement simplified coding so physicians no longer labor under undue documentation complexity.”

American Association of Medical Colleges Chief Healthcare Officer Dr. Janis Orlowski said the AAMC is pleased that CMS has finalized changes to how Medicare reimburses physicians for office or outpatient visits.

“We applaud CMS for listening to our concerns over past proposals and retaining separate payment rates for outpatient or office visits based on the complexity of a patient’s condition, rather than implementing a blended payment rate in CY 2021,” Orlowski said. “We also commend CMS for finalizing the proposal to allow physicians to select a visit level and document the care they provide to patients based on either medical decision-making or time. This brings documentation policy in line with current methods of care delivery, including the use of electronic health records and team-based care.”

Read More:  Computer Vision Syndrome: Coping with Eye Strain

The changes require offsetting payment reductions to specialists who do not frequently perform office visits, potentially impacting patient access to specialty care, AAMC said.

“Annual payment updates under the PFS (physician fee schedule) would ease the impact of such cuts, however payments are frozen from 2020 through 2025,” Orlowski said. “We urge Congress to pass legislation to replace these payment freezes with positive annual updates, since CMS cannot do so unilaterally.”

Consultant and group purchasing organization Premier said it opposes CMS’ decision to continue Medicare payment policies that the courts have found unlawful.

“While CMS states in the rule that it will follow the court’s directive to repay the 2019 site-neutral payment cuts for clinic visits in grandfathered outpatient departments, CMS then proceeds in continuing the 60 percent site-neutral payment cut in 2020 for those same sites,” said Blair Childs, senior vice president of public affairs for Premier.

Scott Whitaker, president and CEO of the Advanced Medical Technology Association, said the organization supported the rules that he said would give greater patient access to medical technology innovation.

“The final rules make it easier for new breakthrough technologies to qualify for outpatient transitional passthrough payments in the outpatient hospital setting and for dialysis facilities to receive new add-on payments when using new innovative equipment and supplies that offer substantial improvements in care,” Whitaker said.

340B Health President and CEO Maureen Testoni said, made the following statement: “A federal court has ruled repeatedly that these cuts are inconsistent with the Medicare statute and must be reversed. A bipartisan majority in both houses of Congress has agreed.”


Health and Human Services Secretary Alex Azar said, “Historic simplifications to billing requirements mean that clinicians will be able to focus on recording the information that’s most important to keeping a patient healthy. As we move toward a system that pays more and more providers for outcomes rather than procedures, we look forward to freeing clinicians from even more of these burdens.”

“Clinician burnout is high because outdated government regulations are diverting their attention from what matters: patient care,” said CMS Administrator Seema Verma. “The Trump Administration’s final rule brings antiquated requirements, which are over 20 years old, up to date with the current practice of medicine and will impact the current and future generation of clinicians.”

Twitter: @SusanJMorse
Email the writer:

News Feed