A recent United States District Court for the District of Columbia ruling allows the Department of Health and Human Services (HHS) to propose a remedy for hospital 340B drug underpayments for calendar years 2018 to 2021. This is the latest 340B decision following the late September ruling where the District Court ruled to vacate the 340B payment cuts for the remainder of 2022 and ordered the Centers for Medicare and Medicaid Services (CMS) to halt the cuts immediately. Hospitals are required to submit adjustments for each 2022 claim paid at the lower rate. However, that prior ruling failed to address claims from 2018 through 2021, with the CMS indicating these years would be addressed in future rulemaking prior to release of the 2024 outpatient prospective payment system (OPPS) final rule. The 2023 OPPS final rule restored 340B payments to the average sales price (ASP) plus 6%, up from ASP minus 22.5%.
The HHS has indicated a proposed remedy is expected to be released by April. The MHA, along with the American Hospital Association and others, continues to advocate for a remedy that quickly restores payments to hospitals for 2018 through 2021, with interest, and which does not penalize any hospitals.
Members with questions should contact Katie Jaskolski at the MHA.
The Centers for Medicare and Medicaid Services (CMS) recently released a final rule to update the Medicare fee-for-service (FFS) outpatient prospective payment system (OPPS) effective Jan. 1, 2023.
The rule restores 340B drug payments to the default rate, generally average sales price (ASP) plus 6%, up from the previous ASP minus 22.5%, in response to the recent federal Supreme Court (SC) ruling. The CMS notes that the agency is still evaluating how to apply the SC’s decision in the American Hospital Association (AHA) v Becerra case which ordered the CMS to restore payments. The CMS will address this in future rulemaking prior to the 2024 OPPS proposed rule.
The MHA, along with the AHA and others, continue to urge the Court to order the CMS to promptly repay hospitals harmed by the unlawful cuts implemented in 2018 and ensure that no hospitals are not penalized. Other provisions of the final rule include:
- Increasing the conversion factor by a net 1.7% after budget neutrality adjustments from $84.18 to $85.59 for hospitals that comply with the CMS outpatient quality reporting (OQR) program requirements.
- Establishing the new rural emergency hospital provider type to allow critical access hospitals and rural hospitals with less than 50 beds to continue providing essential outpatient services while eliminating inpatient services.
- Exempting rural sole community hospitals from the site neutral clinic visit cuts and instead paying the full OPPS rate for visits provided at grandfathered off-campus hospital outpatient departments.
- Increasing the cost outlier threshold by 40% from $6,175 to $8,625, to maintain outlier payments at the targeted 1% of total OPPS payments, resulting in fewer cases qualifying for an outlier payment.
- Removing 11 services from the inpatient only list and adding 8 services that were newly created by the American Medical Association Common Procedural Terminology Editorial Panel.
- Implementing a permanent 5% cap on wage index decreases.
- Adding four procedures to the Ambulatory Surgical Center covered procedures list.
- Requiring prior authorization for an additional service category, facet joint interventions, beginning dates of service on or after July 1, 2023.
- Continuing payment for virtual behavioral health services with an in-person service required within six months prior to the initiation of the virtual service and then annually thereafter, with exceptions made based on beneficiary circumstances. The CMS clarified that the requirement for an in-person visit within six months prior to the initial services is not required for patients who began receiving services during the public health emergency (PHE) or during the 151-day period following the end of the PHE.
- Maintaining the current policy of providing separate payment for non-opioid pain management drugs and biologicals that function as supplies in the ASC setting.
- Implementing a payment adjustment for costs incurred for domestically manufactured National Institute for Occupational Safety and Health (NIOSH)-approved surgical N95 respirators with payments provided biweekly as interim lump-sum payments and reconciled at cost report settlement for cost reporting periods beginning on or after Jan. 1, 2023.
- Creating a new G-code for dental rehabilitation services that require monitored anesthesia and the use of an operating room and assigning it to APC 5871 (Dental Procedures), effectively increasing the payment from roughly $200 to approximately $2,000.
- Changes to the hospital OQR program including:
- Making the Cataracts: Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery (OP-31) measure voluntary rather than mandatory beginning with the 2025 reporting period and 2027 payment determination.
- Aligning the patient encounter quarters for chart-abstracted measures to the calendar year for annual payment update determinations.
- Adding a targeting criterion for measure data validation.
The MHA will provide hospitals with an updated impact analysis and additional details of the rule in the coming weeks.
Members with questions should contact Vickie Kunz at the MHA.
The MHA has drafted comments in response to the Centers for Medicare and Medicaid Services (CMS) proposed rule to update the Medicare fee-for-service (FFS) outpatient prospective payment system (OPPS) for calendar year 2023. The MHA submitted comments regarding the 340B provisions in mid-August urging the CMS to:
- Restore payment rates for 340B drugs to average sales price (ASP) plus 6%.
- Hold all hospitals harmless for 2018-2022 claims.
- Find new funds to restore 340B payments to ASP plus 6% with no reduction to the outpatient conversion factor.
The MHA also prepared comments in response to the proposed payment policies for rural emergency hospitals (REHs), a new hospital designation established by the Consolidated Appropriations Act, for critical access hospitals and rural prospective payment system hospitals with fewer than 50 beds.
The MHA recently posted hospital-specific estimated impact reports of the OPPS proposed rule on the hospital association reporting portal (HARP) for members to access and encourages hospitals to review the impact of the proposed rule on their operations and submit comments to the CMS by 5 p.m. Sept. 13. The CMS is expected to release a final rule to update the OPPS, including finalization of REH payment policies around Nov. 1 for the Jan. 1, 2023 effective date.
The MHA will provide an updated impact analysis following release of the final rule. Members with questions should contact Vickie Kunz at the MHA.
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.
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.