WHA Submits Comment Letters to CMS

Urges agency to withdraw 340B, HOPD changes

September 15, 2017

The Wisconsin Hospital Association submitted two comment letters September 11 to the Centers for Medicare & Medicaid Services (CMS) on the proposed CY 2018 Outpatient Prospective Payment System (OPPS) rule and proposed CY 2018 Physician Fee Schedule (PFS) rule.

In the OPPS rule, CMS proposes to drastically cut the 340B drug discount program by reimbursing separately payable non-pass-through drugs acquired through the 340B program at the Average Sales Price (ASP) minus 22.5 percent. Currently these drugs are paid at ASP plus 6 percent. CMS goes further and proposes that those dollars, instead of going to 340B providers, would then be redistributed to other services/providers within Medicare Part B or potentially elsewhere.

“WHA strongly opposes all aspects of the change in 340B policy and payments for our safety-net hospitals…and urges CMS to pull this proposed policy back completely,” WHA’s comment letter read.

WHA’s opposition is based on a variety of reasons, the least of which is it does not believe CMS has the statutory authority to impose this payment change for the 340B program. WHA also believes the change is inconsistent with Congress’s stated purpose for creating the 340B program originally. Further, WHA believes the reimbursement cuts would greatly undermine the program and 340B covered entities’ ability to continue providing more access to care and pharmaceuticals.

In its OPPS letter, WHA also commented on electronic health record (EHR) provisions and recommended CMS delay or cancel altogether Stage 3 of the EHR Incentive Program and establish a 90-day reporting period for every year of the EHR Incentive Program. In addition, WHA expressed support for CMS’s proposal to reinstate a moratorium on enforcement of its burdensome direct supervision requirement for outpatient therapeutic services provided in critical access hospitals and small and rural hospitals. WHA urged the agency, however, to make the enforcement moratorium permanent and continuous (i.e., without CMS’s proposed gap year in 2017). 

With respect to the proposed CY 2018 Physician Fee Schedule (PFS), WHA strongly expressed its opposition to the payment cuts for nonexcepted services in certain off-campus provider-based hospital outpatient departments (HOPDs). Under Section 603 of the Bipartisan Budget Act of 2015, with some exceptions, services furnished in off-campus provider-based departments (PBDs) that began billing under the OPPS on or after November 2, 2015 were no longer to be paid for under the OPPS, but, instead, would be reimbursed under the PFS at a much lower rate. That rate was set at approximately 50 percent of the prior OPPS rate. In the CY 2018 PFS proposed rule, CMS proposes an even further reduction to these payments, setting the rate at 25 percent, rather than the previous 50 percent, of the OPPS rate.

WHA strongly objects for multiple reasons, including CMS’s own admission it was basing the payment reduction solely on a comparison of one payment code (hospital outpatient clinic visit) to the payment for a similar outpatient visit under the PFS. “WHA objects to this approach. We do not believe basing an entire group of nonexcepted service payments on one code is sound policy. In fact, CMS admits the proposed methodology fails to take into consideration the many other services provided in off-campus PBDs which are not akin to the one payment code it reviewed,” WHA’s letter read.

WHA further reminded the agency that it “expressed strong concerns in our 2017 OPPS comment letter on the approach CMS was taking at that time to operationalize the Section 603 change….[and] we strongly object to further payment reductions as are proposed in the FY 2018 PFS. Hospitals must be paid adequately in order to continue serving as essential access points to care.”

Finally, WHA’s PFS letter also provided comments in support of proposed changes reducing the number of reported measures under the Physician Quality Reporting System as well as reducing the penalties on providers under the valued based modifier payment adjustment.

Read WHA’s CY 2018 OPPS comment letter.

Read WHA’s CY 2018 PFS comment letter.

This story originally appeared in the September 15, 2017 edition of WHA Newsletter