CMS Seeks Comment on Rural Emergency Hospital Proposed Rule

The Centers for Medicare and Medicaid Services (CMS) recently released a proposed rule to obtain comment on potential Conditions of Participation (CoPs) for critical access hospitals (CAHs) and certain rural hospitals seeking to convert from their current status to be designated as a Rural Emergency Hospital (REH). REHs are a new provider type authorized by the Consolidated Appropriations Act passed Dec. 27, 2020, to address concern regarding the closure of rural hospitals across the country. This new designation provides an opportunity for CAHs and rural hospitals with 50 or fewer beds to continue providing essential services in their communities effective Jan. 1, 2023. REHs would be required to:

  • Discontinue providing acute care inpatient services.
  • Provide 24-hour emergency services, observation care and can choose to offer additional outpatient services.
  • Have an annual per patient average stay of 24 hours or less.
  • Have a transfer agreement with a Level I or II trauma center but not precluded from having agreements with Level III or IV trauma centers.

The CMS recently included payment policies related to the new REH in the 2023 Medicare outpatient prospective payment system (OPPS) proposed rule. Medicare outpatient services provided by a REH will be paid 105% of the Medicare OPPS rate with the REH also receiving a monthly facility payment. The CMS proposes a monthly payment of $268,294 for each REH in 2023, with this amount increased annually based on the hospital market basket change.

The CMS proposes that REHs may provide outpatient services that are not paid under the OPPS such as laboratory services paid under the Clinical Lab Fee Schedule (CLFS), which would be paid at the CLFS rate. REHs can also provide distinct part skilled nursing facility (SNF) services which would be paid based on the SNF prospective payment system. Services paid outside of the OPPS such as lab and SNF would not receive the additional 5% payment. The CMS also seeks input on quality measures recommended by the National Advisory Committee on Rural Health and Human Services, and additional suggested measures for the REH quality reporting program. The CMS is seeking additional comments on behavioral and mental health, rural virtual care and maternal health services.

Comments on the proposed CoP rule are due Aug. 29, while comments regarding payment provisions included in the OPPS proposed rule are due Sept. 13. The CMS is expected to release a final OPPS rule around Nov. 1. Members with questions should contact Lauren LaPine at the MHA.

Medicare Outpatient Payment Final Rule Makes Changes for 2022

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

  • Increase the civil monetary penalty (CMP) for hospitals that fail to comply with the price transparency requirements that took effect Jan. 1, 2021. The CMS is setting a minimum CMP of $300/day that will apply to smaller hospitals with a bed count of 30 or fewer and a penalty of $10/bed/day for hospitals with a bed count greater than 30, up to a maximum daily penalty of $5,500.
  • Increase the standard outpatient conversion factor by 1.7%, from $82.80 to $84.18, for hospitals that comply with the outpatient quality reporting program (QRP) requirements.
  • Implement a cost outlier threshold of $6,175, a 16.5% increase from the current threshold of $5,300.
  • Halt the elimination of the inpatient only list and add back to the list the services removed in 2021 except for CPT codes 22630 (Lumbar spine fusion), 23472 (Reconstruct shoulder joint), 27702 (Reconstruct ankle joint) and their corresponding anesthesia codes.
  • Reinstate the ambulatory surgical center (ASC) covered procedures list (CPL) criteria that were in effect in 2020 and prior years and adopt a process, beginning in March 2022, to allow an external party to nominate a surgical procedure to be added to the ASC CPL.
  • 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 will continue to exempt rural sole community hospitals, prospective payment-exempt cancer hospitals and children’s hospitals from the reduced payment policy implemented for most hospitals in 2018.
  • Make non-opioid pain management drugs and biologicals that function as a surgical supply in the ASC setting eligible for separate payment when such product is approved by the Food and Drug Administration, indicated for pain management or as an analgesic, and has a per-day cost above the OPPS drug packaging threshold.
  • Modify the hospital outpatient QRP by adopting three 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: Fibrinolytic Therapy Received Within 30 Minutes of Emergency Department Arrival measure.
  • OP-03: Median Time to Transfer to Another Facility for Acute Coronary Intervention measure.
  • Require mandatory reporting of the outpatient and ASC consumer assessment of healthcare providers and systems patient experience survey beginning in 2024.
  • Make several modifications to the Radiation Oncology Model and officially launch the model Jan. 1, 2022.

The CMS received input on the new Rural Emergency Hospital designation and continues to review comments; the agency will respond to the comments in future rulemaking. The CMS also received input on making reporting of health disparities based on social risk factors and race and ethnicity more comprehensive and actionable by including additional demographic data points.

The MHA will provide hospitals with an estimated impact analysis of the final rule soon. Members with questions should contact Vickie Kunz at the MHA.

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.