The 21st Century Cures Act (H.R. 34) was recently overwhelmingly approved by both houses of Congress and reportedly will be signed into law by President Obama on December 13, 2016. Section 16001 of the Act modifies a “site-neutral” payment policy that was enacted late last year in section 603 of the Bipartisan Budget Act of 2015 (Pub. L. 114–74) (Section 603) and is scheduled to take effect on January 1, 2017.

According to Section 603, most items and services furnished at prospectively established off-campus provider-based departments (PBDs) will no longer be reimbursed by Medicare at the higher rates paid to hospitals under the outpatient prospective payment system (OPPS). Section 603 is intended to eliminate the site-of-service payment differential (i.e., higher facility rates paid under the OPPS for services at off-campus hospital locations than for the same services furnished at non-hospital locations) and thus encourage “site-neutrality.” Regulations regarding the site‑neutral PBD payment policy were included in the recent calendar year (CY) 2017 OPPS Final Rule (81 Fed. Reg. 79562, 79699 et seq. (Nov. 14, 2016)). (Additional guidance has also been released, including, most recently, a reminder to ensure correct addresses on CMS-855A Medicare enrollment forms.)

As enacted, Section 603 applies only to off-campus PBDs not billing as provider-based with respect to covered outpatient services furnished at the PBD prior to November 2, 2015, and that are not dedicated emergency departments. In the CY 2017 OPPS Final Rule, CMS has called such PBDs, which are excepted from the site-neutral payment rule, “excepted off-campus PBDs.”

Section 16001 of the 21st Century Cures Act will create two additional categories of excepted off‑campus PBDs for certain periods of time. In particular:

1. Off-campus provider-based facilities that were under construction (i.e., "mid-build") on November 2, 2015, and that meet certain other requirements, will be permitted to receive OPPS payments effective January 1, 2018; and
2. Off-campus PBDs that were not billing as provider-based for services furnished prior to November 2, 2015, but for which a provider-based attestation was submitted to the provider’s CMS Regional Office prior to December 2, 2015, will be permitted to continue to receive OPPS payments for services furnished through the end of CY 2017 only.

Notably, to qualify under the first exception for “mid-build” facilities, a provider must have had, before November 2, 2015, a binding written agreement with an outside contractor for the actual construction of the PBD. It is important to note that in order to take advantage of the mid-build exception, the legislation requires that, within 60 days following enactment of Section 16001, the provider must submit (1) a written certification that a written construction agreement existed, and (2) a completed provider-based attestation for the facility.

If you have questions regarding provider-based department reimbursement, including the new language in the 21st Century Cures legislation, the Dentons team listed here can help.