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  • Washington Highlights

    CMS Releases CY 2023 Outpatient Prospective Payment System Proposed Rule


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

    On July 15, the Centers for Medicare & Medicaid Services (CMS) released the calendar year (CY) 2023 Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System proposed rule. Comments are due by Sept. 13.

    Notably, for CY 2023, the CMS formally proposed a payment rate of average sales price minus 22.5% percent (ASP -22.5%) for drugs and biologics acquired through the 340B Drug Pricing Program. The agency explained that the June 15 Supreme Court decision, which concluded that CMS did not have the authority to change reimbursement for 340B drugs, did not allow sufficient time to revise the rule but acknowledged that the final rule will likely reflect a rate of an average sales price plus 6% for 340B drugs and biologics (refer to Washington Highlights, June 17). The proposed rule noted that the CMS is still evaluating how to apply the Supreme Court’s recent decision to CYs 2018-2022.

    Among the proposals are the following key points:

    Payment Proposals

    • Payment Update. Proposal to increase the payment rates under the OPPS by 2.7%. This proposed increase is based on the proposed hospital market basket percentage increase of 3.1 percent reduced by a proposed productivity adjustment of 0.4 percentage point. Hospitals that successfully meet the hospital Outpatient Quality Reporting (OQR) Program requirements would be eligible for the full update.
    • CY 2023 OPPS/ASC Ratesetting. Proposal to use the CY 2021 claims data to set CY 2023 OPPS and ASC rates. To account for the impacts of the COVID-19 public health emergency, the CMS proposed using cost report data from the June 2020 extract from Healthcare Cost Report Information System (HCRIS), which includes cost report data through CY 2019. This is the same cost report extract used to set OPPS rates for CY 2022.
    • Inpatient Only (IPO) List. Proposal to remove ten services from the IPO List after determining that these codes meet the current criteria for removal from the list.
    • ASC Covered Procedures List (CPL). Proposal to add one procedure, a lymph node biopsy or excision, to the ASC CPL.
    • Payment for Non-Opioid Products. Proposal to continue the current policy to separately pay for non-opioid pain management drugs and biologics that function as supplies in the ASC setting. These products must be approved by the Food and Drug Administration (FDA), have an FDA-approved indication for pain management or as an analgesic, and have a per-day cost above the OPPS drug packing threshold, as determined by the CMS.
    • Remotely Furnished Behavior Health Services. Proposal to consider as covered outpatient services for which payment would be made under the OPPS, behavior health services furnished remotely by clinical staff of hospital outpatient departments (HOPDs), including staff of critical access hospitals, through the use of telecommunications technology to beneficiaries in their homes.
    • Organ Acquisition. Proposal to exclude research organs from the calculation of Medicare’s share of organ acquisition costs and require a cost offset. Proposal to cover as organ acquisition costs certain hospital costs typically incurred when donors die from cardiac death in order to promote organ procurement and enhance equity. Request for information on alternative methodologies for counting Medicare organs for use in calculating Medicare’s share of organ acquisition costs for transplant hospitals and organ procurement organizations. This information would be used for future rulemaking.
    • Prior Authorization. Proposal to add facet joint interventions as a category of services that will require prior authorization when performed in an HOPD, beginning for dates of service on or after March 1, 2023.
    • Payment Adjustment for National Institute for Occupational Safety and Health (NIOSH)-Approved Surgical N95 Respirators. Proposal to create a payment adjustment under the OPPS for domestically made, NIOSH-approved surgical N95 respirators. There was a similar proposal included in the Inpatient Prospective Payment System (IPPS) proposed rule.
    • Hospital Consolidation Data. Request for information on whether the CMS should publicly release additional data on hospital and skilled nursing facility mergers, acquisitions, consolidations, and changes in ownership. This year, the CMS publicly released this information going back to 2016.
    • Payment for Software as a Service. Request for comment on a specific payment approach to pay for technologies referred to as software as a service under the OPPS. Request for comment on how to encourage software developers to prevent or mitigate the possibility of bias in new applications of this technology.
    • Rural Sole Community Hospital (SCH) Exemption to Site Neutral Policy. Proposal to exempt excepted off-campus, provider-based departments of rural sole community hospitals from the site-neutral payment policy for clinic visits. Rural SCHs would be paid the full OPPS payment rate for clinic visits furnished in these departments.

    Quality Proposals

    • OQR Program. Proposal to (1) make the reporting of the OP-31 Cataracts Function measure voluntary effective with CY 2025 reporting period, after previously finalizing a mandatory reporting policy in last year’s rulemaking beginning with CY 2025 reporting, in recognition of COVID-19 pandemic constraints and changes to patient case volumes, (2) align patient encounter quarters for reporting chart-abstracted measures with the calendar year beginning with CY 2024 reporting period, (3) add a new data validation targeting criterion for CY 2023 reporting period for hospitals with a two-tailed confidence interval less than 75% and less than four quarters of data due to receiving an extraordinary circumstances exception for one or more quarters, and (4) seek comment on the future readoption of the OP-26 Outpatient Volume on Selected Outpatient Surgical Procedures measure or another volume indicator measure for the OQR Program.
    • Overall Hospital Quality Star Ratings. Proposal to amend codified language for the program to state the use of publicly available measure results on the Care Compare website from a quarter within the prior 12 months (rather than the “prior year”). The CMS also provided updates on the previously finalized policy to include quality measure data from Veterans’ Health Administration hospitals and an intention to update the Star Ratings in 2023. The agency may apply its suppression policy should data demonstrate substantial impacts to the underlying measure data by the COVID-19 public health emergency.
    • Creation of a Rural Emergency Hospital Quality Reporting (REHQR) Program. Proposal to create a new REHQR Program as required by the Consolidated Appropriations Act of 2021 to establish quality measurement reporting requirements for REHs. The CMS included requests for information on (1) measures recommended by the National Advisory Committee on Rural Health and Human Services and additional suggested measures for the new program, and (2) comments on rural telehealth, behavioral and mental health, and maternal health services as topics of interest for future rulemaking.
    • Request for Information: Overarching Principles for Measuring Healthcare Disparities Across CMS Quality Programs. Seeks feedback on establishing goals and approaches to disparities measurement, prioritizing measures for disparity reporting, the use of social risk factors and demographic data for disparity reporting, and reporting disparity measures. This is similar to the request for information included in the FY 2023 IPPS proposed rule earlier this year.

    Access the fact sheet and press release. The proposed rule is scheduled to be published in the Federal Register on July 26.