Changes to Medicare billing and payment rules for services furnished at certain off-campus provider-based departments (PBDs) went into effect on January 1, 2017. Pursuant to the statutory “site-neutral” payment policy enacted in section 603 of the Bipartisan Budget Act of 2015 (Pub. L. 114–74), as interpreted by the Centers for Medicare & Medicaid Services (CMS) in the recently finalized CY 2017 hospital outpatient prospective payment system (OPPS) final rule, most items and services furnished at off-campus PBDs established on or after November 2, 2015 are no longer reimbursed by Medicare at higher OPPS payment rates, but are now (effective January 1, 2017) being paid at newly adopted Medicare physician fee schedule (MPFS) rates.

Preexisting off-campus PBDs—i.e., ones that have been billing as provider-based with respect to covered outpatient services furnished at the PBD prior to November 2, 2015—are “excepted” from this site-neutral payment policy. (A provision enacted in the 21st Century Cures Act also exempts certain “mid-build” PBDs that were not yet in operation, but for which construction was already underway on November 2, 2015, provided certain conditions are met.) Such PBDs are effectively “grandfathered” at OPPS payment rates, unless and until they have a change of status that triggers site-neutral payments.

Changes that, with limited exceptions, serve to undo an off-campus PBD’s “excepted” status and trigger site-neutral payments include:

  1. Change of location (unless due to extraordinary circumstances outside the hospital’s control, e.g., earthquake)
  2. Expansion of office footprint at the same location (e.g., adding an additional “unit” in a multi-unit office building)
  3. Sale or transfer to a new owner (unless the PBD is sold as part of the entire hospital, and the buyer accepts assignment of the acquired hospital’s Medicare provider agreement)

New modifier required for claims submissions—Effective January 1, 2017, providers with non-excepted off-campus PBDs—i.e., off-campus PBDs that were established on or after November 2, 2015, and/or that have recently relocated, expanded, or been purchased from another entity—must append new modifier "PN" to each claim line on the institutional claim form (the UB-04) for all items and services furnished at, and billed by, the PBD. The "PN" modifier will trigger payments to the facility under the newly adopted MPFS rates applicable to items and services furnished at non-excepted PBDs.

Requirement to update enrollment information—Remember, too, that if a PBD changes location, the hospital is required to update its CMS-855A enrollment form to provide the PBD’s new address.