Breaking: CMS Hospital Outpatient, Physician Payment Rules Released

1. In OPPS rule, CMS seeks to increase transparency, maintain site-neutral cuts

The Centers for Medicare & Medicaid Services late today issued a proposed rule that would increase Medicare hospital outpatient prospective payment system rates by a net 2.7% in calendar year 2020 compared to 2019. In addition, the rule would: require hospitals to disclose payer-specific negotiated rates; finish phasing in use of the site-neutral rate (40% of the OPPS rate) for clinic visits provided in grandfathered off-campus departments; and continue cuts to drugs purchased under the 340B drug savings program.  Specifically, CMS proposes to build on previous price transparency guidance by defining “standard charge” to include payer-specific negotiated rates, in addition to gross charges. These rates would be included in the list of standard charges for all items and services that hospitals are currently required to post online. In addition, hospitals would be required to publish the negotiated rates for 300 “shoppable” services, including 70 defined by CMS, in a consumer-friendly and searchable manner. CMS also proposes a process for monitoring enforcement, as well as monetary penalties for noncompliance. “America’s hospitals and health systems are dedicated to ensuring patients have the information they need to make informed health care decisions, particularly knowing what their expected out-of-pocket costs will be,” said AHA President and CEO Rick Pollack in a statement. “However, mandating the disclosure of negotiated rates between insurers and hospitals is the wrong approach. Instead, it could seriously limit the choices available to patients in the private market and fuel anticompetitive behavior among commercial health insurers in an already highly concentrated insurance industry. While we support transparency, today’s proposal misses the mark, exceeds the Administration’s legal authority and should be abandoned.” CMS also would finish phasing-in the site-neutral cuts it made to payments for clinic visits provided in grandfathered off-campus departments. Specifically, they would be paid at the site neutral rate of 40% of the OPPS rate in CY 2020.   “By continuing payment cuts for hospital outpatient clinic visits, CMS has not only undermined clear congressional intent, but has threatened to impede access to care, especially in rural and other vulnerable communities,” Pollack said. “These cuts clearly exceed the Administration’s legal authority, which is why the AHA has been working to overturn this rule through legal action and by working with the Congress.” CMS also proposes to continue its current policy of cutting the payment rate for certain drugs purchased under the 340B program to average sales price minus 22.5%. The AHA, along with other hospital associations and member hospitals, successfully challenged the previous cuts to the 340B program in court. “Now that the court has ruled that those cuts are illegal and exceeded the administration’s authority, we urge CMS to refrain from doing more damage to impacted hospitals with another year of illegal cuts,” Pollack said. “Instead, as a remedy, CMS should be offering a plan to promptly restore funds to those affected by the illegal cuts.” CMS solicits comments on the implications of a remedy that would pay for 340B acquired drugs at ASP plus 3%.   In addition, CMS proposes to change 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. The AHA has repeatedly advocated for such a change, which would reduce burden on rural hospitals. CMS proposes changes to the area wage index. Among other proposals, the rule would increase the wage index for hospitals with a wage index value below the 25th percentile. It also would decrease the wage index for hospitals with values above the 75th percentile to make this policy budget neutral. CMS also proposes a prior authorization process for five categories of hospital outpatient department services, including: blepharoplasty, botulinum toxin injections, panniculectomy, rhinoplasty and vein ablation. Finally, the agency would remove total knee arthroscopy from the inpatient only list, making it eligible to be paid by Medicare in the hospital outpatient setting and in ambulatory surgical centers.  CMS will accept comments on the proposed rule through Sept. 27.

2. CMS proposes changes to Medicare Physician Fee Schedule for CY 2020

3. Medicare to begin accepting appropriate use claims modifier in January

Medicare Administrative Contractors should begin accepting modifier codes for appropriate use criteria on Medicare claims for advanced diagnostic imaging on Jan. 1, the start of the one-year educational and operations testing period, the Centers for Medicare & Medicaid Services announced Friday. The Protecting Access to Medicare Act of 2014 established a program to increase the rate of appropriate advanced diagnostic imaging services furnished to Medicare beneficiaries. When fully implemented in 2021, the program will require clinicians ordering an advanced imaging service for a Medicare beneficiary to consult an interactive electronic tool to determine whether the order adheres to the criteria and append information related to the consultation to claims. During the 2020 test year, Medicare will continue to pay claims that do not include the consultation information. AHA is working with other stakeholders to develop a mechanism for furnishing facilities to report the appropriate use criteria consultation information.

4. CMS clarifies partial Medicaid expansion policy

The Centers for Medicare & Medicaid Services today said it will continue to only approve enhanced federal matching funds for Medicaid demonstrations that expand coverage up to 138% of the federal poverty level. “CMS has long supported state flexibility to design innovative Medicaid demonstrations that improve outcomes and promote fiscal sustainability,” a CMS spokesperson said. “However, a number of states have asked CMS for permission to cover only a portion of the adult expansion group and still access the enhanced federal funding available through Obamacare. Unfortunately, this would invite continued reliance on a broken and unsustainable Obamacare system. While we have carefully considered these requests, CMS will continue to only approve demonstrations that comply with the current policy.”

5. CMS issues guidance on new Medicaid SUD provisions

The Centers for Medicare & Medicaid Services Friday released guidance for states implementing two Medicaid provisions in the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act of 2018. One bulletin clarifies the residential pediatric recovery center option for certain infants with neonatal abstinence syndrome, and the other the limited exception to the Institution for Mental Diseases exclusion for certain pregnant and post-partum women receiving SUD treatment.

6. Report recommends policies to promote health equity for children

A new report from the National Academies of Sciences, Engineering, and Medicine recommends policies to advance health equity for children. Suggestions include implementing paid family leave at the federal, state or local levels; supporting the well-being of parents and primary caregivers; and improving financial stability, food security, and housing quality and safety to help families meet basic needs from the prenatal through early childhood periods.