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CMS Releases CY 2016 HOPPS & MPFS Final Rules - Effective January 1, 2016

November 11, 2015

On Friday, October 30, the Centers for Medicare and Medicaid Services (CMS) released an advanced copy to the Calendar Year (CY) 2016 Final Rules for the Hospital Outpatient Prospective Payment System (OPPS) and the Medicare Physician Fee Schedule (MPFS). The public comment period will close for both rules on December 29, 2015.

The OPPS rule updates Medicare payment policies and rates for hospital outpatient department and ambulatory surgical center services. In the CY 2016 final rule there is a net decrease in OPPS payments of 0.4%. This net decrease largely results from a 2.0 percentage point cut to the OPPS conversion factor intended to account for CMS’s overestimation of the amount of packaged laboratory payments under the OPPS for laboratory tests that were previously paid under the Clinical Laboratory Fee Schedule. CMS deferred discussion of the 0.2% cut related to the two-midnight policy until later this year.

Beneficiary co-insurance for OPPS services is projected to decrease from 19.9 percent in CY 2015 to 19.3 percent in CY 2016.

View the 2016 FINAL compared to 2015 FINAL Hospital Rate APC Chart

Several important OPPS policy updates include:

  • Finalizes consolidation of APCs compressing 23 Nuclear Medicine APCs to 5 APCs
  • Creates a new Level 4 to accommodate stakeholder requests to separate PET studies from other NM studies
  • Creates two new pass-through radiopharmaceutical codes for Amyloid agents
  • Creation of Quality Improvement Organizations medical reviews for patient status claims 

The MPFS rule pays for covered physicians’ services furnished to a person with Medicare Part B. This rule is the first fee schedule since Congress acted to improve patient access by protecting physician payments from annual cuts. The rules advance value-based purchasing and promote program integrity.

View the 2016 FINAL compared to 2015 FINAL Medicare Physician Fee Schedule Chart 

Several important MPFS policy updates include:

  • Appropriate use criteria (AUC) for advanced diagnostic imaging services - delayed by CMS

CMS will delay the AUC provision and instead anticipates adopting policies regarding claims-based reporting requirements in the CY 2017 and CY 2018 rulemaking cycles. CMS does not intend to require that ordering professionals meet this requirement by January 1, 2017. Additionally, CMS is modifying the proposed definition of provider-led entity (PLE) to finalize a definition that focuses on the practitioners and providers that comprise an organization. The definition includes national professional medical specialty societies whose members are actively engaged in delivering care in the community and eliminates the need to establish a separate definition for national professional medical specialty societies as they are now an example of a PLE. This will also include alliances and collaboratives of hospitals and hospital system. CMS does not believe the modified definition of PLE will limit the AUC market or the participation of third parties (e.g. RBMs) in the AUC development process.

  • Use CT modifier for Equipment not meeting NEMA standards effective January 1, 2016 (does not affect nuclear medicine services)
  • Misvalued code target affect conversion factor CY 2016 $35.8279 compared to CY 2015 CF $35.9335
  • Misvalued codes identified for AMA RUC Survey include 78306 Bone Scan Imaging Family
  • Finalizing updates to the "Two-Midnight" rule
  • Finalizing provision to empower patients and their families regarding advance care planning
  • Finalizing the Home Health Value-Based Purchasing model
  • Implementation of the statutory phase-in of significant RVU reductions
  • Physician self-referral updates


The CY 2016 Hospital Outpatient Prospective Payment System Final Rule can be found here.

The CY 2016 Medicare Physician Fee Schedule Final Rule can be found here.