" >
Skip to Main Content
CMS Finalizes 4 Rules Affecting CY18 Payment & Quality Programs

MLN Connects logo


Thursday, November 2, 2017



View this edition as a PDF [PDF, 215KB]


Physician Fee Schedule Final Policy, Payment, and Quality Provisions for CY 2018

On November 2, CMS issued a final rule that includes updates to payment policies, payment rates, and quality provisions for services furnished under the Medicare Physician Fee Schedule (PFS) on or after January 1, 2018. 

The overall update to payments under the PFS based on the finalized CY 2018 rates will be +0.41 percent. This update reflects the +0.50 percent update established under the Medicare Access and CHIP Reauthorization Act of 2015, reduced by 0.09 percent, due to the misvalued code target recapture amount, required under the Achieving a Better Life Experience Act of 2014. After applying these adjustments, and the budget neutrality adjustment to account for changes in Relative Value Units, all required by law, the final 2018 PFS conversion factor is $35.99, an increase to the 2017 PFS conversion factor of $35.89. 

The Final Rule Includes:

  • Patients over Paperwork Initiative
  • Changes in valuation for specific services
  • Payment rates for nonexcepted off-campus provider-based hospital departments
  • Medicare telehealth services
  • Malpractice relative value units
  • Care management services
  • Improvement of payment rates for office-based behavioral health services
  • Evaluation and management comment solicitation
  • Emergency department visits comment solicitation
  • Solicitation of public comments on initial data collection and reporting periods for Clinical Laboratory Fee Schedule
  • Part B drugs: Payment for biosimilar biological products
  • Part B drug payment: Infusion drugs furnished through an item of durable medical equipment
  • New care coordination services and payment for rural health clinics and federally-qualified health centers
  • Appropriate use criteria for advanced diagnostic imaging
  • Medicare Diabetes Prevention Program expanded model
  • Physician Quality Reporting System
  • Patient relationship codes
  • Medicare Shared Savings Program
  • 2018 Value Modifier

For More Information:

See the full text of this excerpted CMS Fact Sheet (issued November 2).


Hospital OPPS and ASC Payment System and Quality Reporting Programs Changes for 2018

On November 1, CMS issued the CY 2018 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System final rule with comment period, which includes updates to the 2018 rates and quality provisions and other policy changes. CMS adopted a number of policies that will support care delivery; reduce burdens for health care providers, especially in rural areas; lower beneficiary out of pocket drug costs for certain drugs; enhance the patient-doctor relationship; and promote flexibility in healthcare.

CMS is increasing the OPPS payment rates by 1.35 percent for 2018. The change is based on the hospital market basket increase of 2.7 percent minus both a 0.6 percentage point adjustment for multi-factor productivity and a 0.75 percentage point adjustment required by law. After considering all other policy changes under the final rule, including estimated spending for pass-through payments, CMS estimates an overall impact of 1.4 percent payment increase for providers paid under the OPPS in CY 2018.

CMS updates ASC payments annually by the percentage increase in the Consumer Price Index for all urban consumers (CPI-U). The Medicare statute specifies a Multi-Factor Productivity (MFP) adjustment to the ASC annual update. For CY 2018, the CPI-U update is 1.7 percent. The MFP adjustment is 0.5 percent, resulting in a CY 2018 MFP-adjusted CPI-U update factor of 1.2 percent. Including enrollment, case-mix, and utilization changes, total ASC payments are projected to increase approximately 3 percent in 2018.

The Final Rule Includes:

  • Patients over Paperwork Initiative
  • Payment for drugs and biologicals purchased through the 340B drug pricing program
  • Supervision of hospital outpatient therapeutic services
  • Packaging of low-cost drug administration services
  • Inpatient only list
  • High cost/low cost threshold for packaged skin substitutes
  • Revisions to the laboratory date of service policy
  • Partial Hospitalization Program rate setting
  • Comment solicitation on ASC payment reform
  • ASC covered procedures list
  • Hospital Outpatient Quality Reporting Program
  • Ambulatory Surgical Center Quality Reporting Program

For More Information:

  • Final Rule
  • Press Release: CMS Finalizes Policies that Lower Out-of-Pocket Drug Costs and Increase Access to High-Quality Care

See the full text of this excerpted CMS Fact Sheet (issued November 1).


HHAs: Payment Changes for 2018

On November 1, CMS issued a final rule that updates the CY 2018 Medicare payment rates and the wage index for Home Health Agencies (HHAs) serving Medicare beneficiaries. The rule also finalizes proposals for the Home Health Value-Based Purchasing Model and the Home Health Quality Reporting Program.

CMS projects that Medicare payments to HHAs in CY 2018 will be reduced by 0.4 percent, or $80 million, based on the finalized policies. This decrease reflects the effects of a one percent home health payment update percentage ($190 million increase); a -0.97 percent adjustment to the national, standardized 60-day episode payment rate to account for nominal case-mix growth for an impact of -0.9 percent ($170 million decrease); and the sunset of the rural add-on provision ($100 million decrease).

The Final Rule Includes:

  • Patients over Paperwork Initiative
  • Annual home health payment update percentage
  • Adjustment to reflect nominal case-mix growth
  • Sunset of the rural add-on provision

For More Information:

  • Final Rule
  • Press Release: CMS Finalizes Policies that Lower Out-of-Pocket Drug Costs and Increase Access to High-Quality Care

See the full text of this excerpted CMS Fact Sheet (issued November 1).


Quality Payment Program Rule for Year 2

On November 2, CMS issued the final rule with comment for the second year of the Quality Payment Program (CY 2018), as required by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), as well as an interim final rule with comment. We finalized policies for Year 2 of the Quality Payment Program to further reduce your burden and give you more ways to participate successfully. We are keeping many of our transition year policies and making some minor changes.

The Final Rule Includes:

  • Weighting the Merit-based Incentive Payment System (MIPS) Cost performance category to 10% of your total MIPS final score, and the Quality performance category to 50%
  • Raising the MIPS performance threshold to 15 points in Year 2
  • Allowing the use of 2014 Edition and/or 2015 Certified Electronic Health Record Technology (CEHRT) in Year 2 for the Advancing Care Information performance category, and giving a bonus for using only 2015 CEHRT
  • Awarding up to 5 bonus points on your MIPS final score for treatment of complex patients
  • Automatically weighting the Quality, Advancing Care Information, and Improvement Activities performance categories at 0% of the MIPS final score for clinicians impacted by Hurricanes Irma, Harvey and Maria and other natural disasters
  • Adding 5 bonus points to the MIPS final scores of small practices
  • Adding Virtual Groups as a participation option for MIPS
  • Issuing an interim final rule with comment for extreme and uncontrollable circumstances where clinicians can be automatically exempt from these categories in the transition year without submitting a hardship exception application
  • Decreasing the number of doctors and clinicians required to participate as a way to provide further flexibility by excluding individual MIPS eligible clinicians or groups with ≤$90,000 in Part B allowed charges or ≤200 Medicare Part B beneficiaries
  • Providing more detail on how eligible clinicians participating in selected Advanced Alternative Payment Models (APMs) will be assessed under the APM scoring standard
  • Creating additional flexibilities and pathways to allow clinicians to be successful under the All Payer Combination Option

For More Information:


 Like the newsletter? Have suggestions? Please let us know!

Subscribe to MLN Connects. Previous issues are available in the archive.

This newsletter is current as of the issue date. View the complete disclaimer.

Follow the MLN on Twitter #CMSMLN, and visit us on YouTube.

The Medicare Learning Network®, MLN Connects®, and MLN Matters® are registered trademarks of the U.S. Department of Health and Human Services (HHS).

Medicare Learning Network logo