CMS: Most PBDs fail to qualify for exception

Wednesday, February 10, 2021

Most off-campus provider-based departments (PBD) that claimed the mid-build exception under the 21st Century Cures Act failed to meet the requirements, according to audit results released January 19 by CMS.

Reimbursement for off-campus PBDs changed dramatically under the Bipartisan Budget Act of 2015. The law permitted existing off-campus PBDs to continue to be paid under the Outpatient Prospective Payment System (OPPS). New off-campus PBDs were to be paid under an “applicable payment system,” which CMS determined was the Medicare Physician Fee Schedule (MPFS). For off-campus PBD services, the MPFS pays approximately 40% of the OPPS rate.

The 21st Century Cures Act created an additional exception that allowed off-campus PBDs that met certain requirements to continue to be paid under the OPPS if the department was mid-build at the time the Bipartisan Budget Act of 2015 was enacted.

CMS subsequently conducted audits to determine whether the 334 organizations that applied for the exception met the requirements, Revenue Cycle Advisor reported. The agency reviewed the applications and supporting documentation. The audit determinations were subject to secondary quality assurance reviews to ensure accuracy, CMS said.

Of the 344 organizations subject to the audit, 202 failed to quality for the exception and only 32 met the requirements. Under the 21st Century Cures Act, mid-build exception audit determinations are final and cannot be appealed.

Organizations that failed to meet the exception’s requirements and have been billing under the OPPS have likely received overpayments, according to CMS. Organizations have 240 days to address overpayments identified as a result of the audit. Organizations may be eligible for an Extended Repayment Schedule for any overpayments.

Revenue integrity professionals should take a closer look at any PBDs that are part of their organization. Complex rules determine whether a PBD is designated on- or off-campus and whether an off-campus PBD is excepted (i.e., may continue to be reimbursed under the OPPS) or non-excepted (i.e., is reimbursed at the MPFS rate). Recently, CMS reduced reimbursement for certain services at excepted off-campus PBDs to match non-excepted off-campus PBDs. CMS’ Hospitals Without Walls waivers offer greater flexibilities to PBDs, but added another layer of complexity and confusion.

Revenue integrity professionals may wish to work with compliance, HIM, and PBD administrative staff to conduct internal audits. They may also choose to conduct or participate in financial analyses of current or planned PBDs.

Read more NAHRI coverage of PBD billing and reimbursement here.

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