Health Reform WK-EDGE CMS implements $6.3B OPPS increase, continues site-neutral payment cuts
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Monday, November 18, 2019

CMS implements $6.3B OPPS increase, continues site-neutral payment cuts

By Sheila Lynch-Afryl, J.D., M.A.

CMS persisted in implementing policies despite court orders finding that the agency exceeded its authority.

Reimbursement to providers under the hospital outpatient prospective payment (OPPS) for 2020 will be $79 billion, an increase of approximately $6.3 billion compared to 2019, the OPPS and ambulatory surgical center (ASC) PPS final rule for calendar year (CY) 2020. Payments to ASCs are anticipated to increase about $230 million compared to 2019 payments (Final rule, 84 FR 61142, November 12, 2019).

Annual update. For CY 2020, CMS will increase the payment rates under the OPPS and the ASC PPS by an increase factor of 2.6 percent, which is based on the hospital inpatient market basket percentage increase of 3.0, minus the multifactor productivity adjustment of 0.4 percentage point, as required by section 3401 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). CMS estimated that total payments to ASCs will be approximately $4.96 billion.

Off-campus provider-based departments. In the 2019 OPPS final rule (83 FR 58818, November 21, 2018), CMS announced that it would apply an amount equal to the site-specific physician fee schedule payment rate for nonexcepted items and services furnished by a nonexcepted off-campus provider-based department (PBD) for the clinic visit service, when provided at an off-campus provider-based department excepted from Soc. Sec. Act §1833(t)(21) (see CMS extends site-neutral payment policy but increases payment under OPPS, November 26, 2018). In 2020 CMS will complete the two-year phase-in of this payment reduction. According to CMS, implementation of this policy will cause cost-sharing to be reduced to $9, which will save beneficiaries an approximately $14 for each visit to an off-campus department for a clinic visit in 2020.

In September 2019 a district court found that CMS exceeded its statutory authority by implementing these payment cuts (see Hospitals win, lowering off-campus payment rate exceeded CMS’ authority, September 18, 2019). CMS stated in the final rule that it acknowledges that the "court vacated the volume control policy for CY 2019 and we are working to ensure affected 2019 claims for clinic visits are paid consistent with the court’s order." CMS, however, did 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." In response to the CY 2020 final rule, the AHA asserted, "Now that a federal court has sided with the AHA and found that these cuts exceed the Administration’s authority, CMS should abandon further illegal cuts" and "pay the full OPPS rate for all clinic visit claims going forward."

340B-purchased drugs. CMS will continue to pay average sales price (ASP) minus 22.5 percent for 340B-acquired drugs, including when furnished in nonexcepted off-campus PBDs paid under the physician fee schedule. CMS acknowledged that a court has concluded that the agency exceeded its statutory authority by adjusting the Medicare payment rates for drugs acquired under the 340B program to ASP minus 22.5 percent for 2018 and 2019. CMS summarized comments received on a potential remedy for 2018 and 2019 and announced its intent to conduct a 340B hospital survey to collect drug acquisition cost data.

Price transparency. CMS proposed to add new regulations on price transparency pursuant to section 2718(e) of the Public Health Service Act, as added by ACA section 1001, and President Donald Trump’s executive order on price and quality transparency. However, CMS did not finalize this policy in the CY 2020 OPPS final rule and will instead respond to public comments in a future final rule.

Quality reporting programs. CMS removed OP-33: External Beam Radiotherapy for Bone Metastases from the OQR program beginning with the CY 2022 payment determination and adopted one new measure for the ASCQR Program, ASC-19: Facility-Level 7-Day Hospital Visits after General Surgery Procedures Performed at Ambulatory Surgical Centers, beginning with the CY 2024 payment determination.

Other updates. CMS also made the following updates in the CY 2020 final rule:

  • implementation of a prior authorization requirement for five categories of services—blepharoplasty, botulinum toxin injections, panniculectomy, rhinoplasty, and vein ablation—which are often cosmetic and are covered by Medicare only in limited circumstances;
  • changing the minimum required level of supervision from direct supervision to general supervision for all hospital outpatient therapeutic services provided by all hospitals and critical access hospitals (see 42 C.F.R. §410.27(a));
  • creation of two new comprehensive ambulatory payment classification (C-APC) codes (C-APCs): C-APC 5182 (Level 2 Vascular Procedures) and C-APC 5461 (Level 1 Neurostimulator and Related Procedures), which increases the total number of C-APCs to 67; and
  • removing Total Hip Arthroplasty, six spinal procedure codes, and five anesthesia codes from the inpatient-only list for CY 2020.

FederalRegisterIssuances: FinalRules AgencyNews MedicarePartBNews OutpatientFacilityNews ProviderPaymentNews

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