Comment deadline nears on ‘site-neutral’ payment proposal

The comment deadline on a controversial proposal to stop paying offcampus facilities the same as hospitalbased outpatient units ends this week.

The American Hospital Association wants the CMS to delay implementation of the change for at least one year. It says the proposal in its current form could make providers vulnerable to violating anti-kickback laws.

The new policy is supposed to take effect on Jan. 1, 2017. The proposed rule would classify off-campus provider-based departments that opened or changed service lines or locations in the past 10 months as physician-owned clinics. However, hospitals would remain responsible for all operational costs, such as staff, equipment and facility maintenance, even though Medicare reimbursements would go to treating the independent provider.

The arrangement puts hospitals at legal risk under the Stark law, according to a legal analysis conducted for the AHA by the law firm Hogan Lovells.

Federal law maintains that providing items or services to a physician of any value greater than $396 in a calendar year, or leasing or providing office space, equipment or services to a physician for less than fair market value, can trigger the referral and billing prohibitions of that statute, regardless of intent.

“If adopted, these ‘site-neutral’ payment rules would force some hospitals into new financial arrangements with referring physicians that present substantial compliance risk—and the very real potential for investigation or prosecution-under the federal fraud and abuse laws,” the law firm wrote.

The CMS’ actuary has estimated that site-neutral payments for ambulatory care, which Congress called for in a 2015 spending bill, would save Medicare about $500 million in 2017.