CMS CY 2023 Outpatient & ASC Payment System Proposed Rule
The Centers for Medicare & Medicaid Services (CMS) released the calendar year (CY) 2023 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System Proposed Rule this past summer. The Proposed Rule includes updates to payment rates, policies and regulations that affect Medicare services furnished in hospital outpatient and ambulatory surgical center (ASC) settings beginning January 1, 2023. The proposal addresses issues such as transparency, competition, 340B drug pricing, rural health and behavioral health.
Comment period closed on the proposed rule on Sept. 13th. Watch for the final rule in early to mid-November.
Proposal Highlights
OPPS and the ASC payment rate increase of 2.7 percent for CY 2023. The agency estimates this will result in a total of approximately $86.2 billion in payments to OPPS providers ($1.79 billion more than CY 2022), and $5.4 billion in payments to ASC providers ($130 million more than CY 2022).
Continued reimbursement of telehealth mental health services following the conclusion of the COVID-19 public health emergency (PHE)
Currently, patients can receive remote behavioral health services from hospital outpatient department clinical staff because of emergency waivers resulting from the COVID-19 PHE. CMS proposes considering these remote behavioral health services as covered outpatient services, even after the PHE expires. These services would be performed by the clinical staff of a hospital using telecommunication technology originating from the hospital to beneficiaries in their homes. To accommodate this, CMS proposes OPPS-specific coding to describe such services. To qualify, patients would need to receive an in-person service six months or less before the first remote visit and every 12 months after the remote visit.
Elimination of 10 services from the Inpatient Only (IPO) List
CPT codes 16036, 22632, 21141, 21142, 21143, 21194, 21196, 21347, 21366, and 21422 have been proposed to be removed from the IPO list. The procedures range from escharotomy and posterior interbody arthrodesis to facial reconstruction procedures and facial open fracture treatment. For the complete Table, including the CPT Long Descriptors, see Table 46 in the Proposed Rule.
CMS also proposes adding eight services to the IPO list recently created by the American Medical Association (AMA) CPT® Editorial Panel for CY 2023. If finalized, these services would be effective Jan. 1, 2023.
Maintain the 340B payment rate of the average sales price (ASP) minus 22.5 percent for separately payable drugs.
In the CYs 2018 and 2019 OPPS/ASC Final Rules, CMS finalized a policy that Medicare would reimburse hospital outpatient drugs purchased with a 340B discount at average sales price (ASP) minus 22.5 percent for physician-administered drugs, a departure from previous payment policy of ASP plus 6 percent. That policy prompted litigation, which was the subject of a recent U.S. Supreme Court decision.
On June 15, 2022, the Supreme Court held that absent a survey of hospitals' drug acquisition costs, the DHHS may not vary the reimbursement rates only for 340B hospitals. Therefore, the Court determined that CMS' 2018 and 2019 reimbursement rates for 340B hospitals were unlawful because CMS did not conduct a survey for more than a decade after statutory provisions went into effect in 2006.
While the focus of this decision was on the 2018 and 2019 payment rates, the decision impacts CY 2023 rates. CMS was unable to adjust the proposed payment rates in response to the Supreme Court's decision prior to issuing the proposed rule. Therefore, although CMS formally proposes a payment rate of ASP minus 22.5 percent for drugs and biologics acquired through the 340B program for CY 2023, as in CYs 2019-2022, the agency intends to apply a rate of ASP plus 6 percent to 340B drugs and biologics in the CY 2023 Final OPPS rule in consideration of the Supreme Court's ruling.
Promote Competition and Transparency Regarding the Effects of Provider Mergers, Acquisitions, Consolidations, and Changes in Ownership
President Biden’s Executive Order on Promoting Competition in the American Economy identified that hospital consolidation has left many areas, especially rural communities, without good options for convenient and affordable health care services, and that hospitals in consolidated markets charge far higher prices. In response, this year CMS released data — for the first time — on hospital and skilled nursing facility mergers, acquisitions, consolidations, and changes in ownership going back to 2016, and will update the data quarterly going forward. The intent of this data release was to add transparency for the public and researchers to better understand the effects of these actions on health care affordability in their communities.
Maintain the agency's site neutrality process but exempt Rural Sole Community (RSC) Hospitals from the existing policy.
CMS currently pays the Physician Fee Schedule (PFS)-equivalent payment rate for a clinic visit service when provided at an excepted off-campus provider-based department (PBD) paid under the OPPS, as a method to control the unnecessary increases in volume CMS had observed for that covered outpatient department service. The PFS-equivalent payment rate is approximately 40% of the OPPS payment rate, and the clinic visit is the most frequently billed service under the OPPS. To maintain access to care in rural areas, CMS proposes to exempt Rural Sole Community Hospitals (SCHs) from this policy and pay for clinic visits furnished in excepted off-campus PBDs of these hospitals at the full OPPS rate. The goal of this exemption is to maintain access to care in rural areas by ensuring rural providers are paid for clinic visits provided at off-campus PBDs at rates comparable to those paid by on-campus departments.
Consider eight applications for new pass-through device payment
For CY 2023, CMS received eight applications for device pass-through payments. One of these applications (an intervertebral fusion device) received preliminary approval for pass-through payment status through the agency's quarterly review process. CMS further proposes to
publicly post completed device pass-through application forms and related materials beginning with applications received on or after Jan. 1, 2023.
Expand the categories of services subject to the prior authorization process
For CY 2023, CMS proposes the addition of facet joint interventions to the prior authorization process for dates of service on or after March 1, 2023. The proposed service category would consist of facet joint injections, medial branch blocks and facet joint nerve destruction.
Continue non-opioid pain management drug and biological policy with modifications
In the CY 2022 CMS finalized its proposal that beginning Jan. 1, 2022, CMS would provide separate payment for non-opioid pain management drugs and biologicals that function as supplies in the ASC setting when those products are FDA approved, have an FDA-approved indication for pain management or as an analgesic, and have a per-day cost above the OPPS drug packaging threshold, as determined by CMS.
For CY 2023, CMS proposes maintaining the current separate payment policy in the ASC for these products meeting the criteria. However, the agency also proposes clarifying to add two additional criteria for separate payment:
The drug or biological does not have transitional pass-through payment status.
The drug or biological must not already be separately payable in the OPPS or ASC payment system under a policy other than the one specified in this non-opioid pain management drug policy.
Advance payment policies for rural emergency hospitals, the new hospital type authorized by legislation enacted in 2020
REHs are facilities that convert from either a CAH or a rural hospital with less than 50 beds, and that do not provide acute care inpatient services with the exception of skilled nursing facility services furnished in a distinct part unit. On June 30, 2022 CMS published a rule proposing the Conditions of Participation (CoPs) for Rural Emergency Hospitals. In this rule, CMS is proposing the provider enrollment procedures and payment rates that would apply to REHs. Together, the policies in these proposed rules will allow rural hospitals to seek this new designation and provide continued access to emergency services, observation care, and additional medical and outpatient services. Covered outpatient department services provided by REHs will receive an additional 5% payment for each service. REHs will also receive a monthly facility payment. After the initial payment is established in CY 2023, the payment amount will increase in subsequent years by the hospital market basket percentage increase.
To learn more about the OPPS and ASC Final Rule, check out these resources:
https://public-inspection.federalregister.gov/2022-15372.pdf