On July 6, 2016, the Centers for Medicare & Medicaid Services (CMS) issued its CY 2017 Outpatient Prospective Payment System (OPPS) Proposed Rule. The Proposed Rule includes several provisions regarding how CMS will implement Section 603 of the Bipartisan Budget Act of 2015 (BBA15), which limited OPPS payments beginning January 1, 2017 to only those off-campus provider-based departments billing as hospital departments on or before November 1, 2015.

The Proposed Rule, if adopted, could significantly limit how hospitals operate off-campus provider-based departments (PBDs). For those offcampus PBDs that were being paid for services under the OPPS on or before November 1, 2015 (so-called “excepted” PBDs), CMS proposes to continue making OPPS payments only if the PBD remains in the same physical address and furnishes the same service lines as of November 1, 2015. A PBD that relocates to a new (presumably off-campus) address would lose its excepted status, and any new services lines offered at an excepted PBD – even at the same location – would be paid Medicare Physician Fee Schedule (MPFS) rates.