On June 16, 2016, the Department of Health and Human Services Office of Inspector General (OIG) released its study titled “CMS Is Taking Steps to Improve Oversight of Provider-Based Facilities, But Vulnerabilities Remain” (OEI-04-12-00380). This study was not the OIG’s first attempt at addressing the issues that it believes impacts both the Medicare program and its beneficiaries.
Per the study, the OIG mentioned that as of May 2013, half of hospitals owned at least one on- or off-campus provider-based facility (see Appendix C of the study). The OIG also mentions that the average number of provider-based facilities that each hospital owned was six.
Because the attestation process is voluntary CMS does not determine whether all facilities meet the requirements for receiving the higher provider-based rate. This report further mentioned that 61% of all hospitals that owned provider-based facilities had not submitted attestations for at least one of those facilities. However, the remaining 39 percent of hospitals that owned provider-based facilities had attested for all of them.
As far back as 1999, the OIG identified weaknesses associated with the provider-based status designation and often recommended the elimination of this designation, and they are not alone. The Medicare Payment Advisory Commission (MEDPac) has suggested an equalization of payments of specific services performed in a hospital’s outpatient department and physician offices. The OIG also mentioned that the Bipartisan Budget Act of 2015 came close to equalizing payments — by the elimination of higher payments for off-campus provider-based facilities — but this was only applicable to new off-campus sites. Existing off-campus and new on-site campuses will still receive a higher payment.
If CMS chooses to not eliminate the designation or equalize the payments, the OIG made four key recommendations. A synopsis of CMS’ responses follows each recommendation:
(1) Implement systems and methods to monitor billing by all provider-based facilities. CMS concurred partially, although the agency does “not believe that it is prudent to focus our resources on distinguishing among services provided on the main campus of the hospital.”
(2) Require hospitals to submit attestations for all their provider-based facilities. CMS did not concur with this recommendation, but noted that it will consider whether additional requirements are necessary after the implementation of the amendments made by Section 603 of the Bipartisan Budget Act of 2015.
(3) Ensure that regional offices and MACs apply provider-based requirements appropriately when conducting attestation reviews. CMS concurred with this recommendation.
(4) Take appropriate action against hospitals and their off-campus provider-based facilities that the OIG identified as not meeting requirements. CMS concurred with this recommendation, and noted that it will work with the MACs to recover overpayments and revise prospective payment rates where appropriate.
In closing, hospitals should be prepared and review all of their on- and off- campus facilities to determine if any vulnerabilities exist and be prepared for the impact an equalization would have on their reimbursement.
For more information on this topic, contact Bob Mahoney at firstname.lastname@example.org