Health Law Daily CMS proposes $7.5B OPPS increase, modifications to reimbursement for 340B-acquired drugs
Wednesday, August 12, 2020

CMS proposes $7.5B OPPS increase, modifications to reimbursement for 340B-acquired drugs

By Sheila Lynch-Afryl, J.D., M.A.

CMS proposed to increase reimbursement under the OPPS and ASC PPS and to eliminate the inpatient-only list.

Total payments under the proposed hospital outpatient prospective payment system (OPPS) update for calendar year (CY) 2021 would be approximately $83.9 billion, an increase of $7.5 billion compared to estimated CY 2020 OPPS payments. In the OPPS proposed rule, CMS would also update and simplify the methodology used to calculate the Overall Hospital Quality Star Rating beginning in 2021. Comments are due October 5, 2020 (Proposed rule, 85 FR 48772, August 12, 2020).

OPPS update. CMS proposed to increase payment rates under the OPPS by an increase factor of 2.6 percent, which is based on the proposed hospital inpatient market basket percentage increase of 3 percent for inpatient services paid under the hospital inpatient prospective payment system (IPPS), minus the proposed multifactor productivity adjustment of 0.4 percentage point mandated by section 3401 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148).

340B-acquired drugs. In the CY 2018 OPPS final rule CMS changed its reimbursement policy for separately payable drugs and biologics acquired through the 340B Program from average sales price (ASP) plus 6 percent to ASP minus 22.5 percent (see CMS cut to 340B spending overshadows OPPS update; associations threaten suit, November 13, 2017), which the D.C. Court of Appeals upheld on August 3 (see HHS had the authority to reduce 340B SCOD hospital rates by 28.5 percent, August 3, 2020). For CY 2021, CMS proposed to pay for drugs 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. It proposed in the alternative to continue its current payment policy of ASP minus 22.5 percent.

Inpatient-only list. CMS proposed eliminating the inpatient-only list over the course of three years, beginning in CY 2021 with the removal of approximately 300 musculoskeletal-related services. CMS requested comments on: (1) whether three years is an appropriate time frame for the transition; (2) other services that should be removed from the list in CY 2021; and (3) the sequence for removing additional clinical families or services from the list in the future. It proposed to continue the two-year exemption from certain medical review activities relating to patient status for procedures removed from the inpatient-only list.

Supervision for outpatient therapeutic services. To be consistent with the requirement that applies for most outpatient hospital therapeutic services, CMS proposed to change the minimum level of supervision for non-surgical extended duration therapeutic services to general supervision for the entire service. This would include the initiation portion of the service, for which CMS had previously required direct supervision. In addition, under 42 C.F.R. §410.27, direct supervision for pulmonary rehabilitation, cardiac rehabilitation, and intensive cardiac rehabilitation services would include virtual presence of the physician through audio/video real-time communications technology.

Physician-owned hospitals. Believing that current regulations impose unnecessary burden on high Medicaid facilities, CMS proposed to remove requirements in 42 C.F.R. §411.362 for high Medicaid facilities that are not included in the Stark law, Soc. Sec. Act §1877.

ASCs. Payment rates for ASCs would increase by 2.6 percent in 2021 for ASCs that meet quality reporting requirements. This increase is based on a hospital market basket percentage increase of 3 percent minus the 0.4 percentage point multifactor productivity adjustment mandated by ACA section 3401(k). CMS also proposed to add 11 procedures to the ASC covered procedures list and proposed two alternatives for changing the way procedures are added to the list.

Quality reporting. CMS did not propose any measure additions or removals for the hospital outpatient or ASC quality reporting programs. However, it would amend 42 C.F.R. §§416.310 and 419.46 to update to quality reporting requirements and codify current procedures.

MainStory: TopStory ProposedRules CMSNews ASCNews HealthReformNews PartBNews OPPSNews QualityNews FedTracker HealthCare

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