Medicare Payment and Reimbursement

OPPS final rule keeps site-neutral payments and 340B cuts, leaves out transparency requirement

December 6, 2019 5:40 pm
  • Site-neutral payment cuts to hospital outpatient departments will continue pending a possible appeal of a court ruling that prohibited the cuts.
  • 340B payment cuts will continue amid an ongoing appeal of a decision striking them down.
  • The proposal to require hospitals to post rates negotiated with health plans was stripped out as a separate, still-pending rule.

Medicare kept two major hospital payment cuts in a 2020 final payment rule, released Nov. 1, but removed a proposal to require hospitals to release privately negotiated health plan payment rates.

The controversial major hospital payment cuts in the final rule for the Outpatient Prospective Payment System (OPPS) were retained from the proposed rule even though hospitals successfully have challenged them in federal court.

However, the Centers for Medicare & Medicaid Services (CMS) split off the highest-profile provision, which would have required hospitals to make public a list of their standard charges, which CMS defined as both gross charges and payer-specific negotiated charges. That separate rule has not been finalized.

Site-neutral payments continue despite court ruling

CMS completed a two-year phase-in of payment cuts for clinic visits furnished in off-campus hospital outpatient departments, which comprise the most common service billed under the OPPS.

The cut was estimated to save Medicare and enrollees $800 million in 2020.

Although CMS said it will pay back the 2019 cuts after they were struck down by the U.S. District Court for the District of Columbia, the agency will continue them for 2020, pending its possible appeal of the ruling.

“We do not believe it is appropriate at this time to make a change to the second year of the two-year phase-in of the clinic visit policy,” a CMS fact sheet stated. “The government has appeal rights and is still evaluating the rulings and considering, at the time of this writing, whether to appeal from the final judgment.”

340B cuts also continue despite legal setback

CMS also will continue the 340B program’s reduced Medicare and health plan payments, which were cut from average sale price (ASP) plus 6% to ASP minus 22.5% for separately payable drugs or biologicals.

The cut is being maintained even though a federal court previously rejected the policy. The administration is appealing the decision to the U.S. Court of Appeals for the D.C. Circuit.

CMS plans a survey of 340B hospitals to collect drug acquisition cost data for CY18 and CY19, which “may be used to craft a remedy.”

“In the event the 340B hospital survey data are not used to devise a remedy, we intend to consider the public’s input to inform the steps we would take to propose a remedy for CY18 and CY19 in the CY21 rulemaking,” CMS stated.

OPPS rates for hospitals that meet applicable quality-reporting requirements will increase by 2.6% in 2020. Similarly, the agency increased ambulatory surgical center (ASC) rates for CY20 by 2.6%.

Other financially significant policy changes

Other provisions expected to affect hospital finances include:

  • Removing total hip arthroplasty, six spinal surgical procedures and certain anesthesia services from the Inpatient Only (IPO) list, which will allow those procedures to be performed in the hospital outpatient setting
  • Establishing a two-year exemption, beginning in CY20, from certain medical-review activities relating to patient status for procedures removed from the IPO list beginning in CY20
  • Barring Beneficiary Family Centered Care-Quality Improvement Organizations from denying claims for those procedures for two years
  • Barring for two years referral of those procedures to recovery audit contractors for noncompliance with the two-midnight rule
  • Adding total knee arthroplasty, knee mosaicplasty, six additional coronary intervention procedures and 12 procedures with new CPT codes to the ASC Covered Procedures List
  • Continuing the policy of assigning procedures involving skin substitutes to the low-cost or high-cost group
  • Changing the generally applicable minimum required level of supervision for hospital outpatient therapeutic services furnished by all hospitals and critical access hospitals from direct supervision to general supervision
  • Implementing wage index changes for hospitals in urban and rural areas as designated in the FY20 Inpatient Prospective Payment System (IPPS) final rule
  • Requiring prior authorization of blepharoplasty, botulinum toxin injections, panniculectomy, rhinoplasty and vein ablation to ensure they are medically necessary

New-device provision makes approvals easier in select cases

The final rule also provides an alternative pathway to qualify for device pass-through payment status, under which the “substantial clinical improvement” criterion would not apply to “new, innovative technologies and treatments.”

The five devices that will qualify beginning Jan. 1, 2020 are:

  • AquaBeam Robotic System
  • AUGMENT Bone Graft
  • Surefire Spark Infusion System
  • Optimizer Smart System
  • CustomFlex ArtificialIris

Other policies include changes to quality-reporting programs

One change each will apply to the Hospital Outpatient Quality Reporting (OQR) and Ambulatory Surgical Center Quality Reporting (ASCQR) programs. CMS removed beam radiotherapy for bone metastases (OP-33) from the hospital OQR program effective in CY22. Added for the ASCQR program beginning with the CY24 payment determination was ASC-19: Facility-Level 7-Day Hospital Visits after General Surgery Procedures Performed at Ambulatory Surgical Centers (NQF #3357).

CMS revised the definition of expected donation rate that is included in the second outcome measure for Organ Procurement Organizations (OPOs) to match the Scientific Registry of Transplant Recipient definition.

The agency also suspended for the 2022 certification cycle the requirement that OPOs meet two of three outcome measures, and instead will require them to meet only one measure.



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