On Tuesday, August 4, 2020, the Centers for Medicare & Medicaid Services (“CMS”) published the calendar year (“CY”) 2021 Medicare Hospital Outpatient Prospective Payment System (“OPPS”) and Ambulatory Surgical Center (“ASC”) Payment System proposed rule.
The proposed rule would increase hospital Medicare OPPS payment rates by 2.6 percent and ASC payment rates by 2.6 percent for both hospitals and ASCs that meet quality reporting program requirements. CMS projects that under the proposed rule payments to hospitals under the OPPS in CY 2021 would be $83.9 billion, an increase of $7.5 billion from CY 2020, and ASC payments in CY 2021 would be $5.45 billion, an increase of approximately $160 million from CY 2020.
CMS proposes additional 340B drug discount program payment reductions just days after the July 31, 2020 decision by the U.S. Court of Appeals for the District of Columbia Circuit upholding CMS’ authority to cut 340B drugs reimbursement rates (HL Pulse summary here). Based on the results of the Hospital Acquisition Cost Survey for 340B-Acquired Specified Covered Drugs that occurred earlier this year, CMS proposes to reduce payments for drugs that are acquired under the 340B program “at ASP minus 34.7 percent, plus an add-on of 6 percent of the product’s ASP, for a net payment rate of ASP minus 28.7 percent.” Conversely in the proposed rule, CMS also solicits comments on whether it should instead continue its existing policy of “paying ASP minus 22.5 percent for 340B-acquired drugs.”
In addition to setting payment rates for CY 2021, CMS proposes to eliminate the Inpatient Only (“IPO”) list in a phased approach over the next three years, with the list being completely eliminated by 2024. CMS explains in the proposed rule that it does not believe that this change will negatively impact care for Medicare beneficiaries because physicians should be able to use their “clinical knowledge and judgment” to assess the risk of performing the procedure or service in the inpatient or outpatient setting. CMS also proposes that beginning on January 1, 2021, 266 musculoskeletal-related services would be removed from the IPO list, which currently includes about 1,740 services.
The proposed rule would add cervical fusion with disc removal and implanted spinal neurostimulators to CMS’ prior authorization process for OPPS services and modify the level of supervision needed for non-surgical extended duration therapeutic services (“NSEDTS”) from direct supervision to general supervision. CMS also proposes to provide additional payments to cancer hospitals in order for such hospitals’ payment-to-cost ratio (“PCR”) to be equal to the weighted average PCR of other OPPS hospitals. For CY 2021, CMS would add eleven procedures to the ASC Covered Procedures List (“ASC CPL”) and either create a nomination process or revise the criteria for covered surgical procedures under the ASC payment system to change how procedures are added to the ASC CPL. CMS also proposes updating and refining its quality requirements under the Hospital Outpatient Quality Reporting (“OQR”) and Ambulatory Surgical Center Quality Reporting (“ASCQR”) Programs and how it calculates the Overall Hospital Quality Star Ratings. Finally, CMS proposes to eliminate certain restrictions on the expansion of physician-owned hospitals that qualify as “high Medicaid facilities.”
The proposed rule will be published in the Federal Register on August 12, 2020 and public comments must be submitted to CMS no later than 5 p.m. EST on October 5, 2020. Comments may be submitted electronically to www.regulations.gov, or by regular mail to: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1736-P, P.O. Box 8013, Baltimore, MD 21244-1850.
More information about the CY 2021 OPPS and ASC proposed rule is available in the CMS fact sheet.
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