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    Medicare Trustees Report and 2018 Medicare Physician Fee Schedule and Hospital Outpatient Prospective Payment System Proposed Rules Released

    July 14, 2017

    Yesterday, the Centers for Medicare & Medicaid Services (CMS) released the 2017 Medicare Trustees Report, and the 2018 Medicare Physician Fee Schedule (MPFS) and Hospital Outpatient Prospective Payment Systems (HOPPS) proposed rules.

    The Medicare Trustees Report contained good news with an estimated depletion date of 2029 for the trust fund, one year later than last year’s report; believed to be a result of lower inpatient hospital utilization assumptions and lower-than-expected spending in 2016. Also, last year's report prediction that spending levels in 2017 would likely trigger the creation of a cost-cutting, Independent Payment Advisory Board (IPAB) to rein in costs has not come to fruition.

    The 2018 MPFS proposed rule revealed an overall update to payments under the MPFS of less than one percent with a proposed $0.10 cent increase to the Medicare conversion factor, raising the conversion factor from $35.89 to $35.99. However, the proposed rule presents an estimated decrease in payments to cardiology of two percent for 2018. The estimated two percent reduction in cardiology reimbursement is a result of an estimated one percent reduction in malpractice values coupled with an estimated one percent reduction in practice expense values.

    The 2018 HOPPS proposed rule reflects an anticipated overall impact of two percent payment increase to hospitals in 2018 for services paid under HOPPS. The HOPPS proposed rules also reveals CMS' desire to address increasing drug costs by paying separately payable, non pass-through drugs (other than vaccines) purchased at a discount through the 340B drug pricing program at the average sales price (ASP) minus 22.5 percent rather than current ASP plus six percent rate.

    In addition to the 2018 MPFS and HOPPS proposed rules, CMS issued a Request for Information (RFI) for both, seeking feedback on positive solutions to better achieve transparency, flexibility, program simplification, and innovation. This will inform the discussion on future regulatory action related to outpatient services performed at hospitals and services performed at ambulatory surgical centers related to the MPFS and the HOPPS RFI

    SCAI advocacy staff and leaders will be reviewing the Medicare Trustees report, the proposed payment rules, and the RFI requests in greater detail and will share pertinent findings and any concerns with members over the coming weeks. If you have any comments, questions or concerns, please feel free to contact dgray@scai.org.