Becker's Hospital Review

12 CFO / FINANCE 6 Things to Know About the 2018 Physician Fee Schedule By Ayla Ellison C MS issued its 2018 Medicare Physician Fee Schedule Nov. 2, which cuts Medi- care payments for services provided by certain provider-owned off-campus hospital departments. Here are six things to know about 1,250-page final rule. 1. Physician payment rates will increase 0.41 percent in 2018 compared to 2017. CMS ar- rived at this increase aer accounting for a 0.5 percent increase required by the Medicare Access and CHIP Reauthorization Act and a negative 0.09 percent adjustment required under the Achieving a Better Life Experience Act of 2014. 2. CMS will reduce current physician fee schedule payment rates for services pro- vided at certain off-campus provider-based departments. In 2016, CMS implemented Section 603 of the Bipartisan Budget Act of 2015. Under this section, certain off-cam- pus provider-based departments that began billing under the Outpatient Prospective Payment System on or aer Nov. 2, 2015 are no longer paid for most services under the OPPS. Instead, these facilities began being paid under the physician fee schedule Jan. 1. For 2018, CMS will pay hospitals 40 percent of the OPPS payment rate for these services. Hospitals are currently paid 50 percent of the OPPS rate. Dedicated emergency department services and off-campus provider-based de- partments that meet the 21st Century Cures "mid-build" exception are excluded from the payment rate changes. 3. Hospital groups are concerned. America's Essential Hospitals President and CEO Bruce Siegel, MD, said, "We're particularly troubled that these cuts for off-campus, provider-based departments — an additional 20 percent re- duction to rates already cut in half by regula- tion 2016 — come without an analysis of how they might harm patient care. e cuts run counter to CMS' goal of integrated, coordi- nated healthcare." Tom Nickels, executive vice president of the AHA, said, the AHA is concerned CMS' "con- tinued short-sighted policies on the reloca- tion of existing off-campus provider-based clinics will prevent patients and communities from having access to the most up-to-date, high-quality services." 4. CMS will pay for new telehealth ser- vices. CMS added the following codes to the list of covered telehealth services for 2018: • HCPCS code G0296: Visit to determine low- dose computed tomography eligibility • CPT code 90785: Interactive complexity • CPT codes 96160 and 96161: Health risk as- sessment • HCPCS code G0506: Care planning for chronic care management • CPT codes 90839 and 90840: Psychotherapy for crisis 5. CMS is delaying implementation of the Medicare Appropriate Use Criteria Pro- gram for advanced diagnostic imaging until Jan. 1, 2020. e AUC Program will begin with an education and operations testing year in 2020, meaning physicians will start using AUCs and reporting this information on their claims. 6. e final rule establishes payment to rural health clinics and federally quali- fied health clinics for regular and complex chronic care management services, general behavioral health integration services and psychiatric collaborative care models. To re- ceive payment for these services, rural health clinics and federally qualified health clinics would use two new billing codes. n Cleveland Clinic's Operating Income Tumbles 32% in Q3 By Ayla Ellison C leveland Clinic ended the third quarter of 2017 with operating income of $39.7 million, down 32 percent from the same period of the year prior, according to recently released bondholder documents. The system recorded revenues of $2.05 billion in the third quarter of 2017, up from revenues of $2.01 billion in the same period of the year prior. The revenue growth was par- tially attributable to higher patient volumes. Compared to the third quarter of 2016, acute admissions were up 4 per- cent in the third quarter of 2017. Cleveland Clinic's operating expenses climbed 3.3 percent year over year, with notable increases in salaries, wages and benefits, pharmaceutical costs, and supplies. After factoring in a year-over-year drop in nonoperating gains, Cleveland Clinic ended the third quarter of 2017 with net income of $227.6 million, compared to $287.6 million in the same period of the year prior. n Mayo Clinic's Operating Income More Than Doubles By Ayla Ellison R ochester, Minn.-based Mayo Clinic recorded an operating income of $182 million in the third quarter of 2017, more than double its operating income of $86 million in the same period in 2016, ac- cording to recently released bondholder documents. Mayo saw revenues climb 9.3 percent year over year to $2.97 billion in the third quarter of 2017. The financial boost included an increase in patient service revenue and premium revenue. The system kept its expenses in check in the most recent quarter. Mayo said expenses rose to $2.79 billion in the third quarter of 2017, up 5.9 percent from the same pe- riod of the year prior. Mayo's operating margin in the most recent quarter was 6.1 percent, compared to the third quarter of 2016, when the organization recorded a 3.2 percent margin. n

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