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  • Washington Highlights

    CMS Releases CY 2021 OPPS Proposed Rule


    Mary Mullaney, Director, Hospital Payment Policies
    Phoebe Ramsey, Director, Physician Payment & Quality

    The Centers for Medicare & Medicaid Services (CMS) released the calendar year (CY) 2021 Outpatient Prospective Payment System (OPPS) proposed rule on Aug. 4. Comments on the proposal are due Oct. 5, 2020. 

    The final rule will have a 30-day effective date due to the delayed release of the proposed rule.

    Based on the Hospital Acquisition Cost Survey for 340B-Acquired Specified Covered Drugs, the CMS proposes to pay for drugs purchased under the 340B Drug Pricing Program at average sales price (ASP) minus 34.7%, plus an add-on of 6% of the product’s ASP, for a net payment rate of ASP minus 28.7%.

    The CMS will continue paying reduced reimbursement rates for hospital outpatient clinic visit services (HCPCS code G0463) when furnished in excepted off-campus provider-based departments. 

    The proposed rule includes the following key points:

    Payment Proposals

    Payment Update. Increase payment rates for CY 2021 by 2.6% for hospitals that successfully meet the hospital outpatient reporting requirements. The increase factor is based on the proposed hospitals inpatient market basket increase of 3%, minus the multifactor productivity adjustment required by the Affordable Care Act of 0.4 percentage points.  

    • 340B-Acquired Drugs. Pay average sales price (ASP) minus 28.7% (net) for drugs acquired under the 340B Drug Pricing Program. The proposal is based on the results of the Hospital Acquisition Cost Survey for 340B-Acquired Specified Covered Drugs. Rural sole community hospitals, prospective payment system-exempt cancer hospitals, and children’s hospitals would be exempted from the 340B payment policy for CY 2021 and subsequent years.
    • Site Neutral. Continue reduced reimbursement rates for hospital outpatient clinic visit services (HCPCS code G0463) when furnished in excepted off-campus provider-based departments. 
    • Wage Index. Use the fiscal year 2021 Inpatient Prospective Payment System (IPPS) post-reclassified wage index for urban and rural areas, including the application of the Office of Management and Budget wage index delineations, to determine the wage adjustments for both the OPPS payment rate and the copayment standardized amount for CY 2021.
    • Inpatient Only (IPO) List. Eliminate the IPO list over three years beginning in CY 2021 with the removal of 266 musculoskeletal-related services. The CMS is requesting comment on whether three years is an appropriate timeframe and the impact on quality of care if the IPO list is eliminated.
    • Two-Midnight Rule. Continue a two-year exemption from Beneficiary and Family-Centered Care Quality Improvement Organizations (BFCC-QIOs) referrals to Recovery Audit Contractors (RACs) and RAC reviews for site-of-service for procedures that are removed from the IPO list beginning on Jan. 1, 2021. The CMS is also seeking comments on whether the two-year exemption period continues to be appropriate or if a longer or shorter period may be warranted.
    • Comprehensive Ambulatory Payment Classifications (APCs). Create two new comprehensive APCs — C-APC 5378 (Level 8 Urology and Related Services) and C-APC 5465 (Level 5 Neurostimulator and Related Procedures) — for a total of 69 C-APCs.
    • Changes to Level of Supervision. Establish general supervision as the minimum required supervision level for all nonsurgical extended duration therapeutic services that are furnished on or after Jan. 1, 2021. The proposal would be consistent with the minimum required level of general supervision that currently applies for most outpatient hospital therapeutic services as defined at 42 CFR § 410.32(b)(3)(i) and § 410.27(a)(1)(iv)(C).
    • Ambulatory Surgical Center (ASC) Covered Surgical Procedures. Add 11 procedures to the ASC covered procedures list, including total hip arthroplasty. 
    • Hospital Outpatient Department (HOPD) Prior Authorization. Add two categories of services — cervical fusion with disc removal and implanted spinal neurostimulators — to the HOPD prior authorization process beginning for dates of service on or after July 1, 2021. 
    • Payment for Specimen Collection for COVID-19 Tests. Assign HCPCS code C9803 to APC 5731 with a status indicator of “Q1,” should the COVID-19 public health emergency (PHE) continue to exist during CY 2021, with the presumption that HCPCS code C9803 will be deleted when the COVID-19 PHE ends. The CMS is soliciting comments on whether HCPCS code C9803 should remain active or be made permanent under OPPS beyond the COVID-19 PHE.

    Quality Programs

    The Overall Hospital Quality Star Rating Methodology for Public Release in CY 2021 proposes to establish and codify the Star Ratings and its methodology at 42 CFR § 412.190. Changes to the program are intended to increase simplicity of the methodology, predictability of measure emphasis within the methodology over time, and comparability of ratings among hospitals.

    Some of these changes include:

    • Stratifying the readmission measure group by the proportion of Medicare and Medicaid dually eligible patients served.
    • Peer Grouping hospitals by the number of measure groups a hospital has been scored on (three measure groups, four measure groups, and five measure groups).
    • Consolidating measures into five measure groups (from seven): Mortality, Safety of Care, Readmission, Patient Experience, and Timely and Effective Care (which would combine process measures).
    • Applying a minimum threshold for ratings, requiring at least three measures in three measure groups, one of which must be Mortality or Safety of Care.
    • Using a simple average of measure scores to calculate measure group scores (instead of latent variable modeling).
    • Using publicly reported data from one of the four quarterly refreshes to the Hospital Compare data within the prior year — for the CY 2021 release, the CMS could use data refreshed on Hospital Compare in July or October 2020.

    The CMS proposes to retain the following aspects of the current system and methodology:

    • Adopt an annual publication cycle, using data posted to the Hospital Compare website.
    • Publicly display measure group level information as well as overall rating.
    • Use K-means clustering to assign a rating between one and five stars.
    • Apply z-standardization to measure scoring prior to being combined into an aggregate measure score.

    The CMS also proposes to include  Critical Access Hospitals that elect to submit hospital quality measure data sufficient to meet minimum thresholds to receive a rating and to include Veterans Health Administration hospitals beginning with CY 2023 ratings.

    Hospital Outpatient Quality Reporting Program

    No measure additions or removals are proposed. Limited proposals include technical changes that generally do not change hospital responsibilities or burdens, such as revising codification of the program to include statutory authority, clarifying applicability of data submission and reconsideration deadlines that fall on nonworking days, and expanding the review and corrections policy for web-based measures.