Medicare Outpatient Prospective Payment System Rule Finalized for 2021, Webinar Offered

This article was revised Dec.10 to include Jan. 5 webinar information.

The Centers for Medicare & Medicaid Services (CMS) recently released a final rule to update the Medicare fee-for-service outpatient prospective payment system (PPS) effective Jan. 1, 2021, unless otherwise noted. The final rule will:

  • Require all hospitals, including critical access hospitals, to report information about COVID-19 therapeutic inventory and usage and to report acute respiratory illness during the public health emergency (PHE) for COVID-19.
     
  • Increase the outpatient payment rate by a net 2.5%, from $80.79 to $82.80, for hospitals that comply with requirements of the outpatient quality reporting program.
     
  • Maintain the current payment policy for 340B drugs at average sales price (ASP) minus 22.5% as implemented in 2018, rather than reducing payments to ASP minus 28.7% as proposed. Rural sole-community hospitals, children’s hospitals and PPS-exempt cancer hospitals continue to be paid ASP plus 6%.
     
  • Require prior authorization for two additional service categories — cervical fusion with disc removal and implanted spinal neurostimulators — for dates of service July 1, 2021, and after.
     
  • Eliminate the inpatient-only list over three calendar years, beginning with the removal of 266 musculoskeletal-related services (including total hip arthroplasty) and 32 additional HCPCS codes in 2021.
     
  • Create two new comprehensive ambulatory payment classifications (C-APCs) for Level 8 Urology and Related Services (C-APC 5378) and Level 5 Neurostimulator and Related Procedures (C-APC 5465), increasing the number of C-APCs to 69.
     
  • Reduce the level of supervision of outpatient therapeutic services for nonsurgical extended duration therapeutic services, such as certain infusion services. The CMS stipulates general supervision for the entire service, including the initiation portion of the service, which currently requires direct supervision. The CMS also finalized its proposal to permit direct supervision for pulmonary and cardiac rehabilitation services using virtual presence of the physician through audio/video real-time communications technology, subject to clinical judgment of the supervising physician, until the latter of the end of the calendar year in which the PHE ends or Dec. 31, 2021.
     
  • Establish and update the methodology used to calculate the Overall Hospital Star Ratings, beginning with 2021, by adopting a simple average of measure scores and reducing the total number of measure groups from seven to five. The CMS is also increasing the comparability of star ratings by peer grouping hospitals by the number of measure groups. The CMS did not finalize its proposals related to stratification of the readmissions group by dual eligible patients.
     
  • Add 11 procedures to the ambulatory surgical center covered-procedures list (CPL), including total hip arthroplasty, under the standard review process. Additionally, the CMS revised the criteria used to add procedures to the CPL, which resulted in adding 267 surgical procedures to the CPL beginning in 2021.
     
  • Remove certain restrictions on the expansion of physician-owned hospitals that qualify as “high Medicaid facilities.”

The MHA anticipates distributing hospital-specific impact analyses in early January.  A national webinar to review the final rule and impact analysis will be available from 3 to 4 p.m. Jan. 5. The webinar is hosted by DataGen and is offered free of charge, but registration is required. Members with questions should contact Vickie Kunz at the MHA.