2B — January 15 - 28, 2016 — New Jersey — M id A tlantic
Real Estate Journal
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N ew J ersey By Deborah A. Nappi, CPA, MST, SaxBST Off-campus hospital outpatient site neutral reform
he Affordable Care Act has mandated that healthcare delivery sys- tems provide quality care to T
The Medicare Payment Advisory Commission, Med- PAC, advocated that Medi- care should base payments to provide high quality care regardless of the setting in which the services are provided. As a result, any new off-campus outpatient departments that had not billed Medicare prior to the enactment of the new Act would not be eligible for reimbursements under the OPPS payment system. The facility would now be eligible for reimbursements from either the Medicare Physi- cian Fee Schedule or the
Ambulatory Surgical Center prospective payment system. Therefore, new facilities which were established after November 2, 2015 can only bill under the OPPS pay- ment system until the new payment rules take effect on January 1, 2017. However, a grandfather provision has been included in the law whereby facilities that were billing Medicare under the OPPS prior to November 2, 2015 would be allowed to continue to bill Medicare as hospital departments after December 31, 2016. The codification of Section 603 of the CMS definition of a provider based off-campus hospital outpatient depart- ment is a location that is not on a hospital campus and is located more than 250 yards from the main campus. An on-campus facility is the physical area immediately adjacent to the providers main buildings and other areas and structures that are not strictly contiguous to the main buildings but are lo- cated within 250 yards of the main building. Although the language is very clear with regard to newly acquired off-campus facilities, it is silent on the future reloca- tion of existing off-campus hospital facilities. There are a number of exceptions to the new law including facilities that meet the requirements of a "dedicated emergency department" under existing regulations or a remote loca- tion of a hospital. It has been estimated that this site neutral payment reform would reduce Medi- care spending by $9.3 bil- lion over the next ten years. The incentive to acquire and convert free standing ancil- lary facilities to outpatient departments; off-campus ambulatory surgery centers; imaging centers; radiation therapy centers; or physician practices may now begin to diminish since off-campus outpatient departments will no longer be eligible to re- ceive provider-based reim- bursement. This Act will directly affect hospitals and health systems development strategies going forward. Deborah Nappi, CPA is a senior health care manager with SaxBST and has more than 20 years of accounting and tax experience. n
to end payment differences paid by Medicare based on the site of service. This will significantly change how the Centers for Medicare and Medicaid Services (CMS) reimburse hospitals for most outpatient services furnished in off-campus hospital de- partments. Prior to the enactment of this Act, Medicare had different payment systems for services provided on an outpatient basis. If a service was provided in a physician's office, Medicare would pay for the service under the Medicare Physician Fee
Schedule. That same service performed in a hospital facil- ity resulted in an additional fee, the facility fee, under the Hospital Outpatient Pro- spective Payment System (OPPS). Therefore, the same service resulted in a greater reimbursement when it was performed in a hospital fa- cility. This has resulted in hospitals aggressively pur- chasing physician practices for the ability to charge the higher rate. The differential rate was to compensate for the additional costs associ- ated with operating as a hospital facility.
an increased popu l at i on at reduced re imburse - ments. Fur- ther strides hav e b e en m a d e t o - wards thi s effort by the
MAREJ 8.26.14_Copy of Layout 1 12/18/2015 4:11 PM Page 1
Deborah Nappi
signing of the Bipartisan Budget Act on November 2, 2015. Section 603 of the Act introduced a site neutral payment reform in an effort
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