On Monday, the Centers for Medicare & Medicaid Services (CMS) released the Calendar Year (CY) 2022 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgery Center (ASC) Payment System Proposed Rule. In this post, we will outline the pertinent proposals for healthcare stakeholders.
CMS is proposing to update OPPS payment rates for hospitals that meet applicable quality reporting requirements by 2.3 percent. This update is based on the projected hospital market basket increase of 2.5 percent reduced by 0.2 percent. CMS is also updating the ASC rates for CY 2022 by 2.3 percent.
Section 340B of the Public Health Service Act (340B) allows participating hospitals and other providers to purchase certain covered outpatient drugs from manufacturers at discounted prices. In the CY 2018 OPPS/ASC final rule, CMS reexamined the appropriateness of paying the Average Sale Price (ASP) plus 6 percent for drugs acquired through the 340B Program, given that 340B hospitals acquire these drugs at steep discounts. Beginning January 1, 2018, Medicare adopted a policy to pay an adjusted amount of ASP minus 22.5 percent for certain separately payable drugs or biologicals acquired through the 340B Program. For CY 2022 CMS is proposing to maintain the payment rate of ASP minus 22.5 percent for certain separately payable drugs or biologicals acquired through the 340B Program. Rural sole community hospitals, children’s hospitals, and PPS-exempt cancer hospitals would continue to be exempted from this rate.
Since the beginning of the OPPS, the Inpatient Only (IPO) list has defined a list of services that, due to their medical complexity, Medicare will only pay for when performed in the inpatient setting. In the CY 2021 OPPS/ASC final rule, CMS finalized a policy to eliminate the IPO list over a three-year period, removing 298 services from the IPO list in the first phase of the elimination. Following stakeholder feedback during CY 2021, which opposed the elimination of the IPO list due to patient safety concerns, CMS is proposing to halt the elimination of the IPO list. During the halted period CMS would perform a clinical review of the services removed from the IPO list in CY 2021, and add said services back to the IPO list beginning in CY 2022. CMS is proposing to codify the longstanding criteria for removal of procedures from the IPO list to make clear in regulatory text how we will evaluate future procedures for removal.
In the CY 2021 OPPS/ASC final rule, CMS established a policy in which procedures removed from the IPO list beginning January 1, 2021 would be indefinitely exempted from certain medical review activities related to the two-midnight policy. For CY 2022, CMS is proposing to revise the exemption for procedures removed on or after January 1, 2021 from the IPO list to the exemption period that was previously in effect (i.e., two years), so that all services paid for under the OPPS are eventually subject to medical review.
On January 1, 2021, the Hospital Price Transparency final rule became effective, which required each hospital operating within the United States to establish, update and make public a yearly list of the hospital’s standard charges for the items and services they provide. The Hospital Price Transparency final rule includes the following:
Definitions of “hospital,” “standard charges,” and “items and services;”
Requirements for making public a machine-readable file online that includes all standard charges (specifically, gross charges, payer-specific negotiated charges, discounted cash prices, and de-identified minimum and maximum negotiated charges) for all hospital items and services;
Requirements for making public standard charges for a limited set of ‘shoppable’ services that are displayed and packaged in a consumer-friendly manner, or use of an online price estimator tool
Monitoring for hospital noncompliance and actions to address hospital noncompliance, including: issuing a warning notice, requesting a corrective action plan, and imposing civil monetary penalties of $300/day. There is also a process for hospitals to appeal these penalties.
In this proposed rule, CMS is proposing modifications to increase compliance. Beginning January 1, 2022, CMS would increase the civil monetary penalties (CMP) to a minimum of $300/day for smaller hospitals with a bed count of 30 or fewer and $10/bed/day for hospitals with a bed count greater than 30, not to exceed a maximum daily dollar amount of $5,500. Under this proposed 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. CMS proposes to update the list of activities that present barriers to access to the machine-readable file, specifically to require that the machine-readable file is accessible to automated searches and direct downloads.
Section 125 of the Consolidated Appropriations Act of 2021 established a new provider type called Rural Emergency Hospitals (REHs), effective January 1, 2023. REHs were created to address the concern that closures of rural hospitals and critical access hospitals (CAHs) are leading to a lack of services for people living in rural areas (i.e. access to emergency care). REHs are facilities that convert from either a CAH or a rural hospital with less than 50 beds, that do not provide acute care inpatient services with the exception of skilled nursing facility services furnished in a distinct part unit. REHs will be required to furnish emergency department services and observation care, and may provide other outpatient medical and health services as specified by the Secretary. CMS is requesting public input on a broad range of issues that should be taken into account in establishing this new provider type.