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.

Proposed Policy on Medicaid Payments for Rural Hospitals Released

The Medical Services Administration (MSA) recently released a proposed policy to implement the supplemental budget appropriation for fiscal year (FY) 2020, which included additional general funds to increase critical access hospital reimbursement.  Pending approval by the Centers for Medicare & Medicaid Services (CMS), the proposal would:

  • Restore the rural access pool for small rural hospitals and sole community hospitals.
  • Remove critical access hospitals (CAHs) from the rural access pool.
  • Increase Medicaid outpatient rates for CAHs effective Jan. 1, 2020

Medicaid outpatient services provided by CAHs on and after Jan. 1, 2020, would be paid 71.7% of the Medicare outpatient prospective payment system (OPPS) rate, excluding an area wage adjuster, upon approval by the CMS. All other hospitals are paid 50.3% of the Medicare OPPS rate. The MSA will adjust the reduction factors annually to reflect changes to Medicare rates and maintain budget neutrality, consistent with current policy. The MHA encourages hospitals to review the proposed policy and submit comments to the MSA by April 8.  Members with questions should contact Jason Jorkasky at the MHA.

MHA Monday Report Feb. 3, 2020

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Recordings, Materials Available from Occupational Mix Survey, OPPS Webinars

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MHA and AHA Partner on a Leadership Resiliency Retreat

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Medicare Advantage Enrollment Continues to Rise

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The Keckley Report

Paul KeckleyEpic Pushback from HHS’ Proposed Interoperability Rule Is an Industry Flashpoint

"Last week, (Epic CEO Judy Faulkner) threw a grenade at the government’s push to connect the health delivery system. She sent a letter to several hospital leaders asking that they join Epic in pushing back from the proposed interoperability rule by HHS."

Paul Keckley, Jan. 27, 2020

News to Know

Upcoming events and important healthcare news for the week of Feb. 3:

  • The MHA will host a webinar titled Transforming the Healthcare Financial Experience featuring MHA Endorsed Business Partner CommerceHealthcare at 11 a.m. ET Wednesday. 
  • The MHA Keystone Center Board of Directors will meet from 8:30 to 10:30 a.m. Thursday at MHA Headquarters, Okemos.
  • The MHA is coordinating an educational webinar from 1:30-3 p.m. Feb. 24 with Myers and Stauffer, Michigan’s audit contractors for the federally mandated Medicaid disproportionate share hospital audits. 

MHA in the News

Read recent coverage about the MHA, including a Bridge Magazine article on Democrats’ Medicare for All plans that featured an interview with Laura Appel, MHA senior vice president and chief innovation officer.

Recordings, Materials Available from Occupational Mix Survey, OPPS Webinars

Two webinars were held Jan. 22 covering topics related to Medicare, and materials and recordings are available for MHA members.

The MHA hosted a webinar with consulting firm Comprehensive Reimbursement, Inc. to assist hospitals in completing the 2019 occupational mix survey, which must be completed and submitted to the Medicare Administrative Contractor (MAC) by July 1, 2020.

Results of this survey will be used by the Centers for Medicare & Medicaid Services (CMS) to adjust the Medicare area wage index for fiscal years 2022, 2023 and 2024. The webinar provided an overview of the latest interpretations by the CMS and MACs for ensuring that data are accurately reported.

It is vital that hospitals complete a thorough review process to ensure that employees are properly categorized on the occupational mix survey, which is completed every three years by hospitals that are paid based on the Medicare prospective payment system.  A small change in the occupational mix data can have a significant impact on Medicare payments, since the wage index is used to adjust payments for inpatient, outpatient and all post-acute care services. 

A recording and materials are available from the occupational mix survey webinar to assist members with their review process.

A recording and materials are also available from a webinar offered by DataGen that reviewed the 2020 Medicare fee-for-service outpatient prospective payment system (OPPS) final rule and hospital-specific impact analysis distributed by the MHA Jan. 16. The analyses incorporated information from a correction notice that the CMS issued Dec. 31.

Members who need assistance accessing webinar resources should contact Crystal Mitchell at the MHA, while members with questions regarding the occupational mix survey or OPPS final rule should contact Vickie Kunz at the MHA.