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4 takeaways for cancer programs from the 2019 HOPPS final rule and HHS announcements

November 19, 2018

    October and November have been action-packed when it comes to oncology reimbursement news. In the span of two weeks, CMS released its final regulations for payments to hospital outpatient departments (HOPDs), and HHS announced its intent to create mandatory payment reform pilots for Part B drug pricing and radiation oncology. This year's HOPPS rule is relatively uneventful compared with last year, but there are still significant changes every program needs to be aware of, in addition to the implications of the new payment reform pilots.

    Dec. 11 webconference: Cancer care reimbursement in 2019, explained

    1. 340B reimbursement holds steady at -22.5% for most providers, expands to non-excepted HOPDs

    In January 2018, CMS reduced reimbursement for most separately payable drugs and biologicals acquired through the 340B program. This change is estimated to reduce drug-related revenues for hospitals by $1.6 billion in 2018. In 2019, CMS will continue to reimburse 340B-acquired drugs at ASP -22.5%.

    While non-excepted 340B-eligible HOPDs (a small group of newer off-campus facilities) were exempt from the 340B cuts last year due to a technicality, they will receive this lower rate for 340B drugs in 2019.

    Other organizations with unique and different cost structures will remain exempt this year, including critical access hospitals and PPS-exempt cancer hospitals.

    For cancer programs: It's more important than ever to revisit and reinvigorate your infusion center business strategy. Use our full suite of infusion center resources to help you determine the best billing model, optimize staffing, and find new opportunities to shore up revenue.

    2. CMS finalizes graded payment reduction for off-campus HOPD clinic visits

    CMS is seeking opportunities to reduce HOPD reimbursement for services that can be performed in lower-cost settings. This year, the area of focus is routine clinic visits (G0463), which accounted for more than half of all codes billed at off-campus HOPDs in 2017. In 2019, payment for this service will be reduced by 30% at all off-campus HOPDs, with an additional 30% reduction in 2020.

    This decision signals CMS' commitment to moving towards site neutrality. In 2017, CMS reduced payment for non-excepted off-campus HOPDs (to be paid at 40% of the HOPPS rate in 2019). However, it's important to note that the payment reduction for G0463 will apply to all off-campus HOPDs, no matter when they were built.

    Note that CMS decided not to cut rates for expanded services at excepted off-campus HOPDs, as originally proposed this summer.

    For cancer programs: Understand how this trend will impact your organization's growth strategy. In 2017, right after the initial decrease in payment to non-excepted HOPDs began, 30% of cancer programs told us that site neutrality rules had already impacted their strategy. CMS' rules have made organizations rethink their decision to acquire a private practice, build a new off-campus cancer center, or convert new space to hospital-based—all sure-fire ways of growing volumes and revenues in the past.

    3. Minimal changes to reimbursement for drug administration and radiation

    As shown in the tables below, reimbursement for oncology services will remain fairly consistent. For drug administration, levels 1 and 2 will see a slight bump, but levels 3 and 4 will be minimally decreased.

    For radiation, level 1 services will see a dip of 6%, while all others will remain steady or increase slightly.

    For cancer programs: While steady payment rates aren't bad news, your program will continue to feel financial strain. To improve margins, it is critical to focus on controlling costs and securing revenue.

    4. Mandatory oncology-related reimbursement reform pilots on the way from CMMI

    The HOPPS final rule wasn't the only big announcement in the past few weeks. HHS also announced plans for CMMI to test two mandatory payment reform programs independent of the HOPPS rules.

    First, HHS unveiled a potential new mandatory Medicare Part B drug pricing model that would include:

    • Allowing private-sector vendors to negotiate prices for Medicare Part B drugs;
    • More closely aligning Medicare payments with international prices; and
    • Changing Medicare's payment formula so that incentives would no longer support the prescribing of higher-priced drugs.

    Read more here.

    Second, HHS secretary Alex Azar announced that CMS is planning to test a mandatory radiation oncology bundle. While we wait for the final details of the program, read our four-step guide to make sure your organization is ready.

    For cancer programs: Make sure you know your top opportunities to reduce costs and improve quality, and have plans to act on those opportunities when risk-based reimbursement becomes a reality. Download our cancer care transformation infographic to get started.

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