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.

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.