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CMS 2022: Medicare Hospital OPPS and ASC Payment System Final Rule

Synopsis

This final rule addresses the health equity gap, fights the COVID-19 Public Health Emergency (PHE), encourages transparency in the health system, and  promotes safe, effective, and patient-centered care.

Price Transparency of Hospital Standard Charges

The hospital price transparency regulation (beginning Jan. 1, 2022) requires hospitals to publish a public list of about 300 hospital charge items/services and display them on their website for easy price transparency. 

Since the Centers for Medicare and Medicaid Services (CMS) expect sub-optimal compliance to the hospital price transparency regulation by Jan. 1, 2022, CMS created regulation modifications to increase compliance, including the following:

  • Increase in Civil Monetary Penalties (CMP).

CMS set the minimum penalty of $300/day for smaller hospitals (bed count 30 or fewer) and $10/bed/day for larger hospitals (bed count greater than 30). Maximum daily dollar amount is capped at $5,500. This means a full calendar year of noncompliance will result in a minimum of $109,500 and maximum of $2,007,500 per hospital. 

Increased penalty amount for larger hospitals, but does not change the amount for smaller hospitals. 

  • Deeming state forensic hospitals as having met requirements.

CMS will now deem state forensic hospitals as having met the compliance requirements if these facilities (1) provide treatment exclusively to individuals who are in the custody of penal authorities (i.e., convicts or in-patient mental health care recipients with proper chaperones) and (2) do not offer services to the general public.

  • Prohibiting additional specific barriers to access to the machine-readable file. 

To better help patients access hospital prices, CMS is requiring the mandated machine-readable pricing file be accessible to automated searches and direct downloads.

Updates to OPPS and ASC payment rates

CMS is updating the CY 2022 Outpatient Prospective Payment System (OPPS) payment rates for hospitals that meet applicable quality reporting requirements by 2.0 percent. “This update is based on the projected hospital market basket increase of 2.7 percent reduced by 0.7 percentage point for the productivity adjustment,” CMS said.

Use of CY 2019 claims data for CY 2022 OPPS and ASC Payment System Rate Setting due to the PHE.

Changes to the Inpatient Only List

The Inpatient Only (IPO) list is said to serve as a programmatic safeguard for patients and is a list of services that Medicare will only pay for when performed in the inpatient setting (due to their medical complexity). 

In the CY 2021 OPPS/ASC final rule, CMS set forth a policy to eliminate the IPO list over a three-year period, effectively removing 298 services from the list in the first elimination phase. Many opposed the elimination during the comment period due to patient safety concerns. 

CMS is now proposing to halt elimination of the IPO list and add back almost all of the services removed in 2021, except for CPT codes 22630 (Lumbar spine fusion), 23472 (Reconstruct shoulder joint), 27702 (Reconstruct ankle joint) and their corresponding anesthesia codes. 

CMS is finalizing its proposal to halt the elimination of the IPO list and add back almost all of the services eliminated in 2021 from the IPO list, except for CPT codes 22630 (Lumbar spine fusion), 23472 (Reconstruct shoulder joint), 27702 (Reconstruct ankle joint) and their corresponding anesthesia codes. Any service removed from the IPO list is reviewed to determine the appropriateness for Medicare to pay for the provision of the service in the outpatient setting. 

Two-Midnight Rule Medical Review Activities Exemptions

Due to the unprecedented number of procedures being removed from the IPO list beginning Jan. 1, 2021, CMS established a policy that the 298 services that were removed from the IPO list would be indefinitely exempted from certain medical review activities related to the two-midnight policy. 

Now, since CMS proposed to halt elimination of the IPO list and to return most of the services back to the list, they are now revising the exemption for procedures removed on or after Jan. 1, 2021 to the exemption period that was previously in effect (a two year period).

Changes to the ASC Covered Procedures List (ASC CPL)

As with other changes found in this article, CMS revised criteria that are now being altered again, and this time reverting back to CY 2020’s policy. Beginning CY 2021, changes went into effect that revised the criteria for adding covered surgical procedures to the ASC CPL, and with those changes CMS added 267 surgical procedures to the ASC CPL. 

In the upcoming CY 2022, CMS is reinstating CY 2020’s criteria for adding procedures to the ASC CPL. After CMS sought comment on whether any of the 258 procedures up for removal should be kept with the criteria change, they ultimately removed 255 of the 258 procedures. The three codes proposed for removal but are being retained are CPT codes 0499T, 54650, and 60512.

A surgical procedure nomination process will begin March 2022, allowing an external party to nominate a surgical procedure to be added to the ASC CPL. All procedures proposed 2022 that meet the requirements will be added to the ASC CPL Jan. 1, 2023.

OPPS Payment for Drugs Acquired Through the 340B Program

Under section 340B of the Public Health Service Act (340B) participating hospitals and other providers can purchase certain covered outpatient drugs from manufacturers at discounted prices. 

Back in 2017, CMS looked into the appropriateness of paying the Average Sale Price (ASP) plus six percent for drugs acquired through the 340B program since the discounts were steep. 

Starting CY 2018, Medicare adopted a policy to pay an adjusted amount of ASP minus 22.5 percent for certain separately payable drugs or biologicals acquired through the 340B Program. This will continue in CY 2022, and under this final rule rural sole community hospitals, children’s hospitals, and PPS-exempt cancer hospitals will continue to be excepted from this policy.

Payment for Non-Opioid Pain Management Drugs and Biologicals 

In an act to ensure that there are no financial incentives to use opioids instead of non-opioid alternatives, CMS modified its current policy to provide for separate payment for non-opioid pain management drugs and biologicals that function as surgical supplies in the ASC setting (if products meet certain criteria). 

See section 1833(t)(22)(A) and section 1833(i)(8) of the Social Security Act, as added by section 6082 of the SUPPORT Act for background information.

OPPS Transitional Payment for Drug and Biological Pass-Through and Transitional Payment for Device Pass-Through

CMS reviews and approves applications every year to allow Medicare and Medicaid recipients access to new medical or technological advancements. 

CMS received eight applications for device pass-through payments. One application received preliminary approval for pass-through payment status in the quarterly review process. CMS asked for public comment on all eight applications, and now is approving three devices for pass-through status for the upcoming CY 2022. 

Plus, CMS will continue pass‑through payment status in CY 2022 for 46 drugs and biologicals. For 27 drugs and biologicals of the 46 mentioned, CMS uses the equitable adjustment authority under section 1833(t)(2)(E). See more information at CMS.gov.

Partial Hospitalization Program

Partial Hospitalization Program (PHP) Rate Setting

Medicare payment rates (paid on a per diem basis) have been updated for PHP services rendered in hospital outpatient departments and Community Mental Health Centers (CMHCs). 

Update to PHP Per Diem Rates

CY 2019 claims and cost information will be used instead of 2020, as the COVID-19 PHE is considered an outlier year and an unfit measure to determine ratesetting.  

CMS will maintain the existing unified rate structure, with a single PHP Ambulatory Payment Classification (APC) for each provider type for days with three or more services per day. 

Radiation Oncology (RO) Model

Designed to test quality of care furnished to Medicare beneficiaries while reducing Medicare spending, the RO Model allows radiotherapy services to come from virtually anywhere, so long as services do not vary based on care setting or how much or what type of care is delivered over time.

As this final rule was originally set to go into effect January 2021, but will now begin Jan. 1, 2022, modifications have been made to the RO Model’s timing and design which include the following (as taken directly from CMS.gov):

  • The RO Model will begin on January 1, 2022, with a five-year model performance period (ending December 31, 2026);
         
  • The baseline period is 2017-2019 rather than 2016-2018;

  • The discounts are 3.5 percent (Professional Component) and 4.5 percent (Technical Component);

  • Brachytherapy is not included on the list of included modalities under the RO Model; it will still be paid fee-for-service;

  • In cases where a beneficiary switches from traditional Medicare to Medicare Advantage during an episode before treatment is complete, CMS will consider this an incomplete episode and RT services will be paid the traditional Medicare rate instead of being paid under the RO Model;
  • The RO Model will include an extreme and uncontrollable circumstances policy. This policy will provide CMS with flexibility to delay the model performance period, reduce the administrative burden of Model participation, including reporting requirements, and adjust the pricing methodology. If and when CMS invokes any of the EUC provisions, we will communicate this decision via the RO Model website and written correspondence to RO participants;
  • The RO Model excludes hospital outpatient departments that are participating in the Community Transformation  track of the Community Health Access and Rural Transformation (CHART) Model. For the CHART ACO Transformation track, we follow the same policy for overlap between the RO Model and the Medicare Shared Savings Program ACOs;
  • Only the hospital outpatient departments that are participating in the Pennsylvania Rural Health Model (PARHM) will be excluded from the RO Model rather than all HOPDs eligible to participate in PARHM;

  • Liver cancer will no longer be included in the RO Model as it does not satisfy the model’s cancer inclusion criteria;
  • There are three tracks related to status under the Quality Payment Program, based on RO participant type and compliance with RO Model requirements. We are finalizing with modification to define a Track Three for the RO Model, where Track One would be the same: it would include those Professional participants and Dual participants who follow all RO requirements, including CEHRT, and that we expect will qualify as an Advanced Alternative Payment Model (APM) and a Merit-Based Incentive Program (MIPS) APM. Track Two would be for those Professional participants and Dual participants who follow all RO requirements except for CEHRT, and that we expect would qualify as a MIPS APM only. Track Three would be for all other RO participants and would not be a MIPS APM or Advanced APM. 

Hospital Outpatient/ASC Quality Reporting Programs (OQR and ASCQR)

CMS is finalizing proposals to further meaningful measurement and reporting for quality of care in the outpatient setting.

Hospital Outpatient Quality Reporting (OQR) Program

The Hospital OQR Program is a pay-for-reporting quality program for the hospital outpatient department setting. 

According to CMS.gov, CMS will do the following in CY 2022:

  • adopt three new measures, including the COVID-19 Vaccination of Health Care Personnel (NQF #0431) 
  • make the reporting of two voluntary or suspended measures mandatory 
  • remove two measures
  • and update the validation policies of the Hospital OQR Program to reduce provider burden and improve processes.

Ambulatory Surgical Center Quality Reporting (ASCQR) Program

The ASCQR Program is a pay-for-reporting quality program for the ASC setting. 

According to CMS.gov, CMS will do the following in CY 2022:

  • adopt one new measure, the COVID-19 Vaccination of Health Care Personnel (NQF #0431) 
  • and make the reporting of six voluntary or suspended measures mandatory.

Hospital Inpatient Quality Reporting (IQR) Program

A pay-for-reporting quality program where hospitals that fail to meet all program requirements are subject to a 1/4 reduction in their Annual Payment Update. 

Medicare Promoting Interoperability Program

Intended to incentivize meaningful use of EHR technology by all eligible hospitals and critical access hospitals, this program may cause Medicare payment reduction for those who do not successfully demonstrate meaningful use.

According to CMS, hospitals are currently required to report (1) three self-selected electronic clinical quality measures (eCQMs), and (2) the Safe Use of Opioids eCQM for the CY 2022 reporting period and subsequent years for the Hospital IQR Program and the Medicare Promoting Interoperability Program.

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