On November 2, 2015, President Barack Obama signed the Bipartisan Budget Act of 2015 (Act) into law.1 While the legislation itself—principally an effort to raise the federal debt ceiling and set federal spending—came as no surprise, its inclusion of a significant limitation in the way Medicare will reimburse hospitals for outpatient services furnished in newly created or acquired off-campus departments caught many off guard.

Beginning January 1, 2017, off-campus hospital outpatient departments that did not bill for services under the Medicare Outpatient Prospective Payment System (OPPS) prior to the date of enactment of the Act will no longer be eligible for reimbursement under OPPS. Instead, these departments will be paid under an applicable Medicare Part B payment system, such as the Physician Fee Schedule (PFS) or Ambulatory Surgical Center (ASC) payment system. These systems typically provide for lower payment rates for the same services.

This article first appeared in AHLA RAP Sheet on March 16, 2016.