Final 2019 Rule Changes for Provider-Based Departments

on Friday, 16 November 2018. All News Items | Outpatient Services

Some Good, Some Bad, Some In Between

We at MMP want to wish everyone a Happy Thanksgiving. We are indeed thankful for our clients and our readers. And even though I often complain about the complexities and frustrations of dealing with Medicare, I am thankful for this government health care program that provides coverage of services for elderly and disabled Americans. I see firsthand the tremendous benefit of this program for my parents and in a few years for myself also. Our country is far from perfect, but as Americans we have a lot for which to be thankful.

Since tomorrow is Thanksgiving, many of us are distracted today with thoughts of cooking, spending time with family, Christmas shopping, and of course, eating! With that in mind, this week’s newsletter is intentionally short and to the point. Last week, I addressed some of the changes from the 2019 OPPS Final Rule and promised updates this week on changes in that rule related to off-campus provider-based departments (PBDs). For more background on the PBD issues and what was proposed, please refer to our prior Wednesday@One article. Pulling from that article, here are the proposals and what CMS decided to finalize in the end – some good, some bad, and some in between.

As a reminder, non-excepted off-campus PBDs are those off-campus provider-based departments of a hospital that were not furnishing and billing for services before November 2, 2015. Non-excepted off-campus PBDs are paid under the physician fee schedule (PFS) instead of under OPPS at a rate equal to 40% of the OPPS. Non-excepted services are reported with a PN modifier to trigger the reduced payment. Excepted off-campus PBDs report modifier PO to allow CMS to gather data and monitor billing patterns but continue to be paid under OPPS at regular OPPS payment rates.

The Good

CMS proposed to limit the expansion of services in excepted off-campus PBDs. If an excepted off-campus PBD furnishes services from a clinical family of services that it did not furnish in a baseline period, those new services would be non-excepted and paid at the non-excepted reduced PFS payment rate effective January 1, 2019.

CMS is not finalizing this proposal at this time. CMS did add the following statement – “However, we intend to monitor expansion of services in off-campus PBDs and, if appropriate, may propose to adopt a limitation on the expansion of excepted services in future rulemaking.”

The Bad

CMS proposed to expand the reduced payments for drugs purchased through the 340B Program to non-excepted off-campus PBDs. Separately payable drugs with an OPPS status indicator of “K” furnished and billed by non-excepted off-campus PBDs and purchased through the 340B program would be paid at ASP-22.5% for 2019 instead of the current payment of ASP+6%.

CMS finalized this proposal and beginning January 1, 2019, nonexcepted off-campus PBDs of a hospital paid under the PFS, are required to report modifier “JG” on the same claim line as the drug or biological HCPCS code to identify a 340B-acquired drug or biological.

The In-Between

CMS proposed capping the OPPS payment for clinic evaluation and management (E&M) visits for excepted off-campus PBDs at the PFS-equivalent rate. This means clinic visits (HCPCS code G0463) provided in excepted off-campus PBDs and currently billed with the PO modifier would be paid at the same reduced OPPS rate as those currently billed with the PN modifier by non-excepted PBDs.

CMS will be phasing in the application of the reduction in payment for HCPCS code G0463 in excepted off-campus PBDs over 2 years. These departments will be paid approximately 70% of the OPPS rate for the clinic visit service in CY 2019. In CY 2020, these departments will be paid the site-specific PFS rate for the clinic visit service (currently 40% of OPPS rates). This policy is not budget-neutral and results in an estimated CY 2019 savings of approximately $380 million, with approximately $300 million of the savings accruing to Medicare, and approximately $80 million saved by Medicare beneficiaries in the form of reduced copayments.

There was an announcement in the OPPS Proposed Rule (and restated in the Final Rule) about the creation of a HCPCS modifier (modifier “ER”) to be reported for outpatient hospital services furnished in an off-campus provider-based emergency department. Critical access hospitals (CAHs) would not be required to report this modifier. This modifier is to allow CMS to develop data to assess the extent to which OPPS services are shifting to off-campus provider-based emergency departments.

Again, Happy Thanksgiving and enjoy lots of turkey tomorrow!

Article by Debbie Rubio

Debbie Rubio, BS, MT (ASCP), is the Manager of Regulatory Affairs and Compliance at Medical Management Plus, Inc.  Debbie has over twenty-seven years of experience in healthcare including nine years as the Clinical Compliance Coordinator at a large multi-facility health system.  In her current position, Debbie monitors, interprets and communicates current and upcoming regulatory and compliance issues as they relate to specific entities concerning Medicare and other payers.  You may contact Debbie at This email address is being protected from spambots. You need JavaScript enabled to view it. .


This material was compiled to share information.  MMP, Inc. is not offering legal advice.  Every reasonable effort has been taken to ensure the information is accurate and useful.

green-iconWe are an environmentally conscious company, dedicated to living “green” both at work and as individuals.


1900 Twentieth Avenue South
Suite 220
Birmingham, AL 35209


This email address is being protected from spambots. You need JavaScript enabled to view it.