Final Rule for Medicare Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System (CMS-1753FC)

Final Rule for Medicare Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System (CMS-1753FC)

The Centers for Medicare & Medicaid Services (CMS) announced the OPPS/ASC final rule in a press release on November 2, 2021. This rule will help advance the administration’s commitment to increasing price transparency. The rule also ensures consumers have the necessary information to make informed decisions about their health care. The final rule includes policies aimed at “promoting safe, effective, and patient-centered care”. In addition to the press release, CMS published a fact sheet that highlights many of the changes.

The 2022 Hospital OPPS and APC Changes course is now live on the YES HIM Education site. The course reviews the OPPS APC-specific policy changes, the plans to eliminate the Inpatient Only (IPO) list, and other topics in the Final Rule.

Price Transparency of Hospital Standard Charges

First on the agenda is the perennial issue of price transparency. Hospital price transparency helps people know what hospitals charge for items and services it provides. Despite the requirements, CMS has noted suboptimal compliance among hospital.

Therefore, CMS will implement several changes, with the most notable being an increase in civil monetary penalties (CMP). Beginning January 1, CMS will increase the penalty for some hospitals that do not comply with the Hospital Price Transparency final rule. The minimum civil monetary penalty of $300 per day will apply to smaller hospitals with 30 or fewer beds. For hospitals with a bed count greater than 30, the penalty will be $10 per bed per day, not to exceed a maximum daily dollar amount of $5,500. According to the press release, “under this approach, for a full calendar year of noncompliance, the minimum total penalty amount would be $109,500 per hospital, and the maximum total penalty amount would be $2,007,500 per hospital.”

The 2021 IPPS Proposed Rule also addressed price transparency, with a focus on publishing important information related to hospital rates. You can read more about that in our blog article here.

Updates to OPPS and ASC Payment Rates

Furthermore, CMS is updating the CY 2022 OPPS payment rates for hospitals and ASCs meeting applicable quality reporting requirements by 2%.

When setting rates, it is necessary to use the best available data. This ensures that payment rates accurately reflect estimates of the costs associated with providing outpatient services. Usually, the best data comes from the most recent dataset; the CMS considers to the most recent dataset to be two years prior to the calendar year that is the subject of rulemaking. But, due to the COVID-19 PHE, CMS believes that the CY 2020 data are not a good approximation of outpatient hospital services in CY 2022. As a result, CY 2019 claims data will be used to set the CY 2022 OPPS and ASC payment system rates.

The 2022 Hospital OPPS and APC Changes course is now live on the YES HIM Education site. The course reviews the OPPS APC-specific policy changes, the plans to eliminate the Inpatient Only (IPO) list, and other topics in the Final Rule.

Changes to the Inpatient Only (IPO) List

In the CY 2021 OPPS/ASC final rule, CMS finalized a policy to eliminate the IPO list over a three-year period. During the first phase, CMS removed 298 services from the IPO. CMS received many comments about this. Largely due to patient safety concerns, the agency is finalizing its proposal to halt the elimination of the IPO list. CMS will add back the procedures removed in 2021 . This does not include CPT codes 22630 (Lumbar spine fusion), 23472 (Reconstruct shoulder joint), 27702 (Reconstruct ankle joint) and their corresponding anesthesia codes.

In July, we discussed the possibility of CMS abolishing the IPO list. To read our analysis at the time, check out this article.

Changes to the ASC Covered Procedures List

In CY 2021, CMS revised a long-established safety criterion that has been used to add covered surgical procedures to the ASC Covered Procedures List (ASC CPL). In CY 2022, “CMS is reinstating the criteria for adding procedures to the ASC CPL that were in place in CY 2020.” See the final rule for specifics. Beginning March 2022, CMS will start a nomination process, allowing external parties to nominate surgical procedures for addition to the ASC CPL.

OPPS Payment for Drugs Acquired Through the 340B Program

Under Section 340B of the Public Health Service Act, participating hospitals and other providers can purchase certain covered outpatient drugs at discounted prices. CMS adopted a policy to adjust those drugs in 2018. In the 2022 final rule, CMS will continue the payment rate of average sale price minus 22.5 percent for drugs acquired through the 340B Program. Rural sole community hospitals, children’s hospitals, and PPS-exempt cancer hospitals will still be exempt from this policy.

Non-Opioid Pain Management Drugs and Biologicals Under Section 6082 of the SUPPORT Act

As CMS explains, “Section 1833(t)(22)(A) and Section 1833(i)(8) of the Social Security Act, as added by Section 6082 of the SUPPORT Act, require that the Secretary review payments under the OPPS and ASC for opioids and evidence-based non-opioid alternatives for pain management.” This ensures there are no incentives to use opioids instead of non-opioid alternatives. For CY 2022, CMS is changing its existing policy. The revised policy provides for separate payment for non-opioid pain management drugs and biologicals that function as surgical supplies in the ASC setting. This is predicated on those products meeting certain criteria finalized in the rule. See the final rule for specifics.

OPPS Transitional Payment for Drug and Biological Pass-Through and Transitional Payment for Device Pass-Through

CMS is approving three new devices for pass-through status. CMS will continue pass-through payment status for 46 drugs and biologicals in CY 2022. See the final rule for specifics.

Partial Hospitalization Program

CMS updated the Medicare payment rates for Partial Hospitalization Program (PHP) services. This applies to services furnished in hospital outpatient departments and Community Mental Health Centers (CMHCs). According to CMS, “the PHP is a structured intensive outpatient program that comprises a group of mental health services paid on a per diem basis under the OPPS, based on PHP per diem costs.” The finalized proposal maintains the existing unified rate structure, with a single PHP Ambulatory Payment Classification (APC) for each provider type for days with three or more services per day. For consistency with other OPPS regulation, CMS will use CY 2019 claims and cost information.

Radiation Oncology Model

The federal government designed the Radiation Oncology (RO) Model in 2020. It serves as a test for hospital outpatient departments and physician group practices (including freestanding radiation therapy centers) for radiotherapy (RT) services.

This model looks at services that: do not vary based on care setting; do not vary based on how much or what type of care is delivered over time; and that preserve or enhance the quality of care furnished to Medicare beneficiaries while also reducing spending.

According to the CMS factsheet, “the RO Model seeks to align incentives to give radiation oncologists the flexibility to provide high-quality, patient-centered care aligned with the latest evidence-based guidelines, without worrying that providing less care, if applicable, will reduce their payments.” There had been prior several delays due to the COVID-19 PHE.

For more information on the RO Model, visit: https://innovation.cms.gov/initiatives/radiation- oncology-model/

Hospital Outpatient/ASC Quality Reporting Programs

CMS is currently finalizing proposals to the Hospital Outpatient Quality Reporting (OQR) and Ambulatory Surgical Center Quality Reporting (ASCQR) Programs.

Hospital Outpatient Quality Reporting (OQR) Program

This is a pay-for-reporting quality program for hospital outpatient department settings. Hospitals that don’t meet the requirements will receive a 2 percentage point reduction in their annual fee schedule update.

Other changes for 2022 include:

(1) adopt three new measures, including the COVID-19 Vaccination of Health Care Personnel (NQF #0431);
(2) make the reporting of two voluntary or suspended measures mandatory;
(3) remove two measures; and
(4) “update validation policies of Hospital OQR Program to reduce provider burden and improve processes.”

Ambulatory Surgical Center Quality Reporting (ASCQR) Program

Similar to the OQP program, the ASCQR Program is a pay-for-reporting quality program for the ASC setting. Failure to meet reporting requirements will result in ASCs receiving a 2 percentage point in their annual fee schedule update.

Changes for 2022 include:

(1) adopt one new measure, the COVID-19 Vaccination of Health Care Personnel (NQF #0431); and
(2) make the reporting of six voluntary or suspended measures mandatory.

Hospital Inpatient Quality Reporting (IQR) Program and Medicare Promoting Interoperability Program

Lastly, the Hospital IQR Program is another pay-for-reporting quality program. Those that do not meet all Hospital IQR requirements will see a 1/4th reduction in Annual Payment Update under the Inpatient Prospective Payment System (IPPS). The Medicare Promoting Interoperability Program provides incentives for meaningful use of certified electronic health record technology (CEHRT) by eligible hospitals and critical access hospitals (CAHs). Those that fail to demonstrate meaningful use of CEHRT and do not satisfy all Medicare Promoting Interoperability Program requirements are subject to a Medicare payment reduction.

Current regulations stipulate that hospitals are required to report (1) “three self-selected electronic clinical quality measures (eCQMs),” and (2) “the Safe Use of Opioids eCQM” for the duration of the CY 2022 reporting period and subsequent years.

The full final rule (CMS-1753-FC) can be downloaded at: https://www.federalregister.gov/public-inspection/2021-24011/medicare-program-hospital-outpatient-prospective-payment-and-ambulatory-surgical-center-payment. This was filed on 11/02/2021, with a scheduled publication date of 11/16/2021.