Proposal Released to Update Medicare Outpatient Prospective Payment System

The Centers for Medicare & Medicaid Services (CMS) recently released a proposed rule to update the Medicare fee-for-service outpatient prospective payment system (OPPS) effective Jan. 1, 2022. Provisions of the proposed rule would:

  • Increase the standard outpatient conversion factor by 2%, from $82.80 to $84.46 for hospitals that comply with the outpatient quality reporting program (QRP) requirements.
  • Implement a cost outlier threshold of $6,100, a 15% increase from the current threshold of $5,300.
  • Codify hospital pricing transparency requirements.
  • Request information on rural emergency hospitals (REHs), which were established as a new provider type by the Consolidated Appropriations Act of 2021. REHs must have a staffed emergency department to provide services 24 hours a day 7 days per week and can provide observation care and other outpatient services. REHs must not provide acute care inpatient services, except for skilled nursing services in a distinct-part unit.
  • Maintain the inpatient only list (IPO) and add the 298 services removed from the IPO list in 2021 back to the list beginning in 2022.
  • Codify in regulation the five longstanding criteria used to determine whether a procedure or service should be removed from the IPO list.
  • Reinstate the ambulatory surgical center (ASC) covered procedures list criteria that were in effect in 2020 and prior years.
  • Continue the current policy of paying a reduced amount of average sales price minus 22.5% for drugs and biologicals purchased under the 340B drug discount program. The CMS proposes to continue to exempt rural sole-community hospitals, PPS-exempt cancer hospitals and children’s hospitals from the adjusted payment policy.
  • Modify the hospital outpatient QRP by adopting several new measures, including the COVID-19 Vaccination Coverage Among Health Care Personnel measure in the OPPS and ASC settings and removing two measures:
    • OP-02: Fibronlytic Therapy Received Within 30 Minutes of Emergency Department Arrival.
    • OP-03: Median Time to Transfer to Another Facility for Acute Coronary Intervention measure.
  • Request information from stakeholders on potential measure updates on reporting and submission requirements for the Safe Use of Opioids – Concurrent Prescribing electronic clinical quality measure in the hospital inpatient QRP.  
  • Require mandatory reporting of the outpatient and ASC consumer assessment of healthcare providers and systems patient experience survey beginning in 2024.
  • Seek input on ways to make reporting of health disparities based on social risk factors and race and ethnicity more comprehensive and actionable.

The MHA encourages members to contact Vickie Kunz at the MHA to discuss questions they have before submitting comments to the CMS by Sept. 17, and to convey to the MHA by Sept. 3 any concerns identified for consideration in the association’s comments. The association will provide hospitals with an estimated impact analysis of the proposed rule within the next few weeks.