Recognizing that hospitals need additional flexibilities and financial stability to combat COVID‑19, CMS published in a second Interim Final Rule enabling hospitals to temporarily relocate excepted off-campus and on-campus provider-based hospital departments without losing the ability to receive payment for hospital outpatient services paid under the outpatient prospective payment system (“OPPS”). Despite this increased flexibility, hospitals will still need to be mindful of specific state law requirements as well as certain regulatory requirements under the Medicare Conditions of Participation (to the extent such requirements are not waived) in order to properly bill and receive payment under OPPS for hospital outpatient services rendered at relocated sites.
Background
Under Section 603 of the Bipartisan Budget Act of 2015 (“Section 603”), off-campus hospital provider-based departments (“PBDs”) (as defined under 42 CFR § 413.65), established before November 2, 2015, are considered “excepted” or “grandfathered” for purposes of payment under OPPS. However, off-campus PBDs established on or after November 2, 2015, are considered “non-excepted.” Medicare pays for hospital outpatient services rendered at these non-excepted PBDs based on the “applicable payment system” which CMS has defined as the Medicare Physician Fee Schedule (“MPFS”) subject to the MPFS relativity adjuster (which is effectively a percentage of the OPPS payment amount and currently is 40% of the OPPS payment amount).
In implementing Section 603, CMS established a policy that generally any excepted off-campus PBD that relocated would lose its excepted status and ability to bill and receive payment under OPPS. Additionally, on campus PBDs that relocate off-campus would also be considered non-excepted following the relocation. However, CMS did establish an exception which permits off‑campus excepted PBDs to relocate for extraordinary circumstances beyond the hospital’s control (e.g., natural disasters, significant public health and safety issues, etc.). CMS Regional Offices (“ROs”) are tasked with approving or denying these relocation requests.
Relocation of Provider-Based Department Flexibilities
In light of the COVID-19 public health emergency (“PHE”), CMS is temporarily adopting an expanded version of the extraordinary circumstances policy during the COVID-19 PHE. Under this new extraordinary circumstances policy, hospitals may relocate excepted off-campus and on-campus PBDs may relocate off-campus locations during the COVID-19 PHE. These relocated PBDs can bill and are paid for services under the OPPS in the new location prior to submitting documentation to the RO to support the extraordinary circumstances as long as the following process is followed:
- Hospitals with on-campus and excepted off-campus PBDs that relocate due to the COVID‑19 PHE in a manner that is not inconsistent with their state’s emergency preparedness or pandemic plan should append modifier “PO” to OPPS claims for services furnished at the relocated PBDs.
- All hospitals that relocate excepted on- or off-campus PBDs to off-campus locations in response to the COVID-19 PHE should notify their CMS RO by email of their hospital’s CCN, address of the current and relocated PBD, date services they began furnishing services at the relocated PBD, justification for the relocation, and an attestation that the relocation is not inconsistent with state’s emergency preparedness plan.
Hospitals may relocate a PBD to a patient’s home provided that the patient is registered as a hospital outpatient receiving hospital outpatient services. Additionally, a hospital may divide its PBD into multiple locations during a relocation and continue to bill and be paid under OPPS at all locations, as long as all locations are consistent with the state’s emergency preparedness or pandemic plan.
Cautions and Considerations
- While CMS issued waivers under Section 1135 of the Social Security Act waiving Medicare’s provider-based rules at 42 CFR §413.65 in light of the COVID-19 PHE, the waiver does not determine whether a PBD is excepted or non-excepted for purposes of Section 603.
- Similarly, CMS has waived certain requirements under the Medicare Conditions of Participation to allow hospitals to add temporary expansion sites, but temporary expansion sites must meet non-waived Medicare Conditions of Participation that continue to apply during the COVID-19 PHE.
- The temporary extraordinary circumstances policy permitting short-term relocation is time-limited to the COVID-19 PHE.
- Relocation of on-campus or off-campus PBDs must align with the state’s emergency preparedness or pandemic plans to ensure continuity with the state’s efforts.
- Hospitals are not required to submit a unique request to the RO each time it registers a hospital outpatient when the PBD “relocates” to the patient’s home.
- Hospitals intending to bill Medicare for services provided in a relocated excepted PBD do not need to update the CMS-855A enrollment form for the off-campus relocated site during the COVID-19 PHE as long as the proper RO notification takes place via email. On the other hand, hospitals that wish to permanently relocate their excepted PBD must file an updated CMS-855A enrollment form to reflect the new address(es) of the PBD(s).
- Hospitals that permanently relocate these PBDs off-campus would be considered new off‑campus PBDs billing after November 2, 2015, and would be paid the lower MPFS‑equivalent rate following the end of the COVID-19 PHE.
- Non-excepted off-campus PBDs will continue to be considered non-excepted during the COVID-19 PHE, even if it relocates, and will continue to be paid at the lower MPFS-equivalent rate.
If you have additional questions, please contact:
- Regan Tankersley at (317) 977-1445 or rtankersley@hallrender.com;
- Lori Wink at (414) 721-0456 or lwink@hallrender.com;
- Brian Jent at (317) 977-1402 or bjent@hallrender.com;
- Lauren Hulls at (317) 977-1467 or lhulls@hallrender.com;
- Lisa Lucido at (248) 457-7812 or llucido@hallrender.com; or
- Your regular Hall Render attorney.
Hall Render’s attorneys and professionals continue to maintain the most up-to-date information and resources at our COVID-19 Resource page, through our 24/7 COVID‑19 Hotline at (317) 429-3900 or by contacting your regular Hall Render attorney.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot—outside of an attorney-client relationship—answer specific questions that would be legal advice.
