Summary of the CY 2022 Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System Proposed Rule ...
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Summary of the CY 2022 Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System Proposed Rule (CMS-1753-P) On July 19, 2021, the Centers for Medicare & Medicaid Services (CMS) released the Calendar Year (CY) 2022 Medicare Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System Proposed Rule (CMS-1753-P). The rule proposes updates to the Medicare payment policies, reimbursement rates, quality reporting, hospital price transparency requirements, and Radiation Oncology Model. In addition, CMS seeks comment on advancing health equity through its quality reporting programs, transitioning to the use of digital quality measures, defining rural emergency hospitals, and permanently adopting certain flexibilities that were implemented to address the COVID-19 public health emergency (PHE). The CMS fact sheet can be found here. This rule will be published in the Federal Register on August 4, 2021. We will be working with members to develop our comments, which are due on September 17th. Below we provide highlights of the proposed rule policies impacting hospital outpatient departments and ambulatory surgery centers that we believe have some relevance to plans and on which we will consider commenting. If there are other sections you believe we should consider for comment, please let us know . Updates to OPPS and ASC payment rates CMS proposes to increase Medicare outpatient payment rates by 2.3% in CY 2022. This reflects a market basket update of 2.5% reduced by the 0.2% productivity adjustment. This update also applies to ASC payment rates for an interim period of five years (CY 2019 through CY 2023) per a policy finalized in the 2019 OPPS/ASC final rule. For hospitals and ASCs that do not publicly report quality measure data, CMS will continue to impose a 2- percentage point reduction in payment rates for a net update of 0.3%. CMS estimates that total payments to hospital outpatient departments (including beneficiary cost-sharing) would increase by approximately $1.3 billion in CY 2022 compared to CY 2021. Use of CY 2019 Claims Data for CY 2022 OPPS and ASC Payment System Rate-Setting Due to the PHE Historically, CMS endeavors to utilize the best available data for outpatient PPS and ASC rate-setting to accurately reflect cost estimates associated with furnishing outpatient services. CMS generally uses claims data from two years prior to the CY that is the subject of the rulemaking. However, due to the COVID-19 PHE, CMS believes the data from CY 2020 is not the best overall approximation of expected outpatient hospital services for CY 2022. To reflect the PHE’s impact, CMS proposes to use CY 2019 data to approximate expected costs for purposes of setting CY 2022 OPPS and ASC payment rates. Price Transparency of Hospital Standard Charges The Hospital Price Transparency final rule that became effective January 1, 2021 implements section 2718(e) of the Public Health Service Act, which requires each hospital operating within the US to establish, update, and AHIP.ORG 1
make public a yearly list of the hospital’s standard charges for items and services provided by the hospital, including for diagnosis-related groups established under section 1886(d)(4) of the Social Security Act. The final rule codified at 45 CFR 180 established the following: (1) definitions of “hospital,” “standard charges,” and “items and services;” (2) requirements for making public a machine-readable file online that includes all standard charges (specifically, gross charges, payer-specific negotiated charges, discounted cash prices, and de- identified minimum and maximum negotiated charges) for all hospital items and services; (3) requirements for making public standard charges for a limited set of ‘shoppable’ services that are displayed and packaged in a consumer-friendly manner, or use of an online price estimator tool; and (4) monitoring for hospital noncompliance and actions to address hospital noncompliance (including issuing a warning notice, requesting a corrective action plan, and imposing civil monetary penalties of $300/day), and a process for hospitals to appeal these penalties. Building off these policies, CMS proposes several modifications beginning January 1, 2022, including the following: • Proposing changes to Civil Monetary Penalties (CMP) for non-compliance. Currently, the CMP is set at a maximum amount of $300/day. CMS proposes to scale up the CMP based on a hospital’s bed count, with a minimum of $300/day for small hospitals, defined as 30 or fewer beds, an additional $10/bed/day for hospitals with 31 to 550 beds, and a daily cap of $5,500 for hospitals more than 550 beds. • Expanding the existing regulatory “deeming” exclusion policy to include state forensic hospitals. • Proposing to prohibit additional specific barriers to access to the machine-readable file, including through inhibiting automated searches and direct downloads. • Clarifying the expected output of hospital online price estimator tools. CMS proposes clarifications to the expected output of price estimator tools offered by hospitals in lieu of the on-line, consumer-friendly shoppable services format. Specifically, CMS specifies that the tools must provide a cost estimate for the amount expected to be paid by the patient taking into consideration the individual’s insurance information and to note that the estimate reflects the amount the hospital anticipates will be paid by the individual for the shoppable service, absent unusual or unforeseeable circumstances. • Seeking further comment in certain areas. CMS solicits input on: Considerations for “best practice” online price estimator tools; improving expectations related to plain language descriptions of shoppable services; methods to identify and highlight exemplar hospitals; and improving standardization of the machine-readable files. Changes to the Inpatient Only List CMS has historically maintained an inpatient only (IPO) list that identifies services for which Medicare will only make payment when the services are furnished in an inpatient hospital setting. Such restrictions are deemed necessary based on the nature of the procedure, the underlying physical condition of the patient, or the need for at least 24 hours of postoperative recovery time or monitoring before the patient can be safely discharged. In the CY 2021 OPPS/ASC rule, CMS finalized a policy to eliminate the IPO list over a three-year transitional period with the list completely phased out by CY 2024. In the first phase, CMS removed 298 services from the list. However, stakeholders expressed concerns to CMS regarding patient safety and stated the IPO list serves as an important programmatic safeguard. For CY 2022, CMS proposes to halt the elimination of the IPO list in order to allow for greater consideration of the impact of removing services from the list on beneficiary safety and in light of the COVID-19 PHE’s impact on providers’ ability to prepare. Specifically, CMS proposes to rescind the reference to the elimination of the list of AHIP.ORG 2
services through a three-year transition and to add back the 298 services removed from the IPO list in CY 2021 to the IPO list starting in CY 2022. CMS proposes to return to reviewing the procedures against Medicare’s longstanding criteria to determine if a service is appropriate for Medicare to pay in the outpatient setting. CMS would evaluate such removals against five criteria, which it now proposes to codify: (1) Most outpatient departments are equipped to provide the services to the Medicare population. (2) The simplest procedure described by the code may be furnished in most outpatient departments. (3) The procedure is related to codes that we have already removed from the IPO list. (4) A determination is made that the procedure is being furnished in numerous hospitals on an outpatient basis. (5) A determination is made that the procedure can be appropriately and safely furnished in an ASC and is on the list of approved ASC services or has been proposed by us for addition to the ASC list. Lastly, CMS seeks comment on policy modifications, such as whether the agency should maintain the longer-term objective of eliminating the IPO list or maintaining the IPO list but continuing to systematically scale the list back so that inpatient only designations are more consistent with current standards of practice. Two-Midnight Rule Medical Review Activities Exemptions Inpatient hospital claims with lengths of stay greater than two midnights after admission are presumed to be appropriate for Medicare Part A payment and thus are not the focus of medical review efforts, absent evidence of systematic gaming, abuse, or delays in the provision of care. Conversely, claims with a length of stay less than two midnights are presumed to be more appropriate for other settings of care and thus do not qualify for Medicare Part A payments. However, there is an exception to the two-midnight rule for those services on the IPO list as they may be provided only in the inpatient setting regardless of the expected length of stay. In accordance with the proposal to return the 298 procedures to IPO list in CY 2022, these services again would be excluded from the two-midnight policy starting in CY 2022. There was also a two-year exemption from the two-midnights medical review activities for those services removed from the IPO list between January 1 and December 30, 2020. CMS proposes to continue this policy for services removed from the IPO list on or after January 1, 2021. CMS believes that a two-year exemption from certain medical review activities would allow sufficient time for providers to become more familiar with how to comply with the two-midnight rule and for hospitals and clinicians to become used to the availability of payment under both the hospital inpatient and outpatient setting for procedures removed from the IPO list. Should the agency finalize the proposal to halt the elimination of the IPO list, it believes its rationale applies equally to the smaller number of services that may be removed from the list at any one time in the future, and thus that the same two-year exemption period is appropriate. Changes to the ASC Covered Procedures List CMS reviews all covered surgical procedures under the ASC CPL annually to identify appropriate additions or removals from the ASC CPL. As part of this, CMS reviews HCPCS codes that are currently paid under the OPPS but not paid under the ASC CPL to determine if the procedure meets CMS’ definition of a surgery and if technology and/or medical practice affect the clinical appropriateness of these procedures being performed in the ASC setting. In the CY 2021 OPPS/ASC final rule, CMS revised longstanding patient safety criteria used to add covered surgical procedures to the ASC CPL, providing that certain criteria used in the past would instead become factors for physicians to consider when deciding whether a specific beneficiary should receive a covered surgical procedure in an ASC. The agency also adopted a notification process for surgical procedures the public believes should be added to the ASC CPL under the criteria. Using its revised policy, CMS added 267 surgical procedures to the ASC CPL beginning in CY 2021. AHIP.ORG 3
Now, CMS proposes to reinstate the patient safety ASC CPL criteria that were in effect in CY 2020 and remove 258 of the 267 procedures that were added to the ASC CPL in CY 2021. CMS requests comments on whether any of the 258 procedures would meet the CY 2020 criteria it is proposing to reinstate. The agency also proposes to change the notification process adopted in CY 2021 to a nomination process, whereby stakeholders would nominate procedures they believe meet the criteria to be added to the ASC CPL. If CMS determines that a surgical procedure meets the requirements to be added to the ASC CPL, including a surgical procedure nominated by an external party, it would propose to add the surgical procedure to the ASC CPL in the next applicable rulemaking. The formal nomination process would begin in CY 2023. OPPS Payment for Drugs Acquired Through the 340B Program Section 340B of the Public Health Service Act (340B) allows participating hospitals and other providers to purchase certain covered outpatient drugs from manufacturers at discounted prices. In the CY 2018 OPPS/ASC final rule, CMS reexamined the appropriateness of paying the Average Sale Price (ASP) plus 6% for drugs acquired through the 340B Program, given that 340B hospitals acquire these drugs at steep discounts. Beginning January 1, 2018, Medicare adopted a policy to pay an adjusted amount of ASP minus 22.5%for certain separately payable drugs or biologicals acquired through the 340B Program. This policy has been the subject of a lawsuit brought by the American Hospital Association (AHA) and others, American Hospital Association v. Becerra. The U.S. Court of Appeals for the D.C. Circuit upheld the policy and, on July 2 of this year, the U.S. Supreme Court agreed to review the D.C. Circuit’s decision. Arguments in that case will take place in the court term that begins in October. CMS proposes to continue its current payment policy for separately payable drugs and biologicals (other than drugs on pass-through payment status and vaccines) acquired under the 340B program. Specifically, CMS proposes to continue to reimburse certain 340B hospitals for drugs purchased through the 340B program at the Average Sales Price (ASP) minus 22.5%. As in previous years, CMS proposes to extend this ASP minus 22.5% payment policy to 340B-acquired drugs furnished in non-grandfathered (nonexcepted) off-campus provider-based departments and to biosimilar and other drugs without an ASP purchased through the 340B program. This payment policy would not apply to rural sole community hospitals, children’s hospitals, or PPS-exempt cancer hospitals, consistent with the previous rulemaking cycles. Equitable Adjustment for Devices, Drugs, and Biologicals with Expiring Passthrough Status As a result of the proposal to use CY 2019 claims data rather than CY 2020 data, CMS proposes to use its “equitable adjustment authority” to continue to provide separate payment for up to four additional quarters for 27 drugs and biologicals and one device category whose pass-through payment status will expire between Dec. 31, 2021 and Sept. 30, 2022. Hospital Outpatient Quality Reporting (OQR) Program The Hospital OQR Program is a pay-for-reporting program for the hospital outpatient department setting. Hospitals that do not meet the reporting requirements receive a 2.0 percentage point reduction in their annual payment update. CMS proposes to remove two measures from the program, noting the availability of a more broadly applicable measure: • Fibrinolytic Therapy Received Within 30 Minutes of Emergency Department (ED) Arrival (OP-2); and • Median Time to Transfer to Another Facility for Acute Coronary Intervention (OP-3). AHIP.ORG 4
CMS believes that the new ST-Segment Elevation Myocardial Infarction (STEMI) electronic clinical quality measure (eCQM) measure it is proposing for adoption in the program would serve as a replacement for these two measures. CMS proposes to adopt three new measures for the program: • COVID-19 Vaccination Coverage Among Health Care Personnel (HCP) measure, beginning with the CY 2022 reporting period; • Breast Screening Recall Rates measure, beginning with the CY 2022 reporting period; and • STEMI eCQM, beginning as a voluntary measure with the CY 2023 reporting period, and then as a mandatory measure beginning with the CY 2024 reporting period. CMS proposes to require mandatory reporting of several measures that had been voluntary. CMS previously adopted the OP–37a–e: Outpatient and Ambulatory Surgery Consumer Assessment of Healthcare Providers and Systems (OAS CAHPS) measures to assess patient experience with care following a procedure or surgery in a hospital outpatient department. However, in the CY 2018 OPPS/ASC rule the agency delayed implementation of the measure due to lack of sufficient operational and implementation data. In this proposed rule, CMS proposes to restart the OP–37a–e measure beginning with the CY 2024 reporting period. In the CY 2014 OPPS/ASC final rule CMS finalized the adoption of the OP-31: Cataracts: Improvement in Patient’s Visual Function with 90 Days Following Cataract Surgery measure. However, CMS delayed implementation due to concerns about potential difficulties operationalizing the measure and then allowed hospitals to report it voluntarily. However, CMS now proposes to require hospitals to report on OP-31 given successful use of the measure through voluntary reporting. CMS also solicits comments on potential future measure adoptions. Specifically, the agency is seeking feedback on the potential future adoption of measures that address care quality in the hospital outpatient setting given the transition of procedures from inpatient settings to outpatient settings of care. CMS also requests comment on the potential future adoption of a respecified version of a patient-reported outcome-based performance measure (PRO-PM) for two such procedures—elective primary total hip arthroplasty (THA) and total knee arthroplasty (TKA), which were removed from the IPO list effective with CY 2020 and CY 2018, respectively. CMS seeks feedback on the mechanism for PRO data collection and submission, the usefulness of an aligned set of PRO- PMs across settings where the procedures are performed, and considerations unique to THAs/TKAs in the outpatient setting. Request for Information (RFI): Addressing Health Disparities through the OQR Program CMS also seeks feedback on potential efforts to utilizes the OQR program to address healthcare disparities. The agency is requesting comments on the idea of stratifying performance results in the hospital outpatient setting. The agency identified six priority measures included in the Hospital OQR Program as candidate measures for disparities reporting stratified by dual eligibility: • MRI Lumbar Spine for Low Back Pain (OP-8); • Abdomen CT – Use of Contract Material (OP-10); • Cardiac Imaging for Preoperative Risk Assessment for Non-Cardiac Low Risk Surgery (OP-13); • Facility 7-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy (OP-32); • Admissions and ED Visits for Patients Receiving Outpatient Chemotherapy (OP-35); and • Hospital Visits after Hospital Outpatient Surgery (OP-36). CMS is exploring the possibility of further expanding stratified reporting to include race and ethnicity following potential confidential reporting using dual eligibility as an indicator of social risk. To support such stratification, CMS is also interested in learning more about the benefits and challenges associated with measuring facility AHIP.ORG 5
equity using indirect estimation to enhance existing administrative data quality for race and ethnicity until self- reported information is sufficiently available. CMS also notes the agency’s interest in improving demographic data collection. CMS solicits comments on current data collection practices by facilities to capture demographic data elements (such as race, ethnicity, sex, sexual orientation and gender identity (SOGI), primary language, and disability status). Further, the agency is interested in potential challenges facing facility collection, on the day of service, of a minimum set of demographic data elements in alignment with national data collection standards (such as the standards finalized by the Affordable Care Act) and standards for interoperable exchange (such as the USCDI incorporated into certified health IT products as part of the 2015 Edition of health IT certification criteria). Finally, CMS seeks comment on the design of a Facility Equity Score for presenting combined results across multiple social risk factors and measures, including race/ethnicity and disability. Ambulatory Surgical Center Quality Reporting (ASCQR) Program The ASCQR Program is a pay-for-reporting program that requires ASCs to meet quality reporting requirements or receive a reduction of 2.0 percentage points in their annual fee schedule. CMS proposes one new measure for the program, the COVID-19 Vaccination of Health Care Personnel measure. CMS also proposes to reinstate six measures that were either paused or suspended from the program: • ASC-1: Patient Burn; • ASC-2: Patient Fall; • ASC-3: Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure, Wrong Implant; ASC-4: All-Cause Hospital Transfer/Admission; • ASC–11: Cataracts—Improvement in Patient’s Visual Function with 90 Days Following Cataract Surgery; and • ASC–15a–e: Outpatient and Ambulatory Surgery Consumer Assessment of Healthcare Providers and Systems. CMS notes that it believes feasibility concerns with the measures have been ameliorated and that the measures are of value to stakeholders. CMS requests comments on potential future measures for the program. First, CMS notes its interest in measures that address care quality in the ASC setting given the transition of procedures from inpatient settings to outpatient settings of care. CMS also seeks feedback on the future inclusion of a PRO-PM measure for elective primary THA and TKA. CMS did not propose to remove these procedures from the ASC CPL. Specifically, CMS notes its interest in the potential future inclusion of a re-specified version of NQF #3559. RFI: Addressing Health Disparities through the ASCQR Program CMS also requests comments on ways the ASCQR program could be leveraged to address healthcare disparities. CMS notes several unique challenges to measuring disparities for dually eligible individuals in the ASC setting, principally, relatively low volumes of dual eligible patients in many facilities, and large diversity in the types and patient mix between ASCs as these facilities tend to specialize. In the agency’s initial analysis, few facilities met the minimum sample size required to yield technically feasible, adequately representative, and statistically reliable disparity results. CMS is interested in learning more about measuring disparities in the ASC setting including the utility of neighborhood-level socioeconomic factors toward measuring disparities in quality-of- care outcomes for ASCs and ways social risk factors influence the access to care, quality of care and outcomes for ASC patients in general or for specific ASC services. AHIP.ORG 6
CMS is seeking feedback on n quality measures for pain management procedures performed in ASCs. CMS analyses found that pain management surgical procedures are a significant portion of procedures performed in the ASC setting and the agency believes that an applicable measure would provide important quality of care information for a specialty not included in the current ASCQR Program measure set. RFI: Rural Emergency Hospitals The Consolidated Appropriations Act of 2021 (CAA) established a new provider type called “REH” starting January 1, 2023. REH enrollment is available to providers currently enrolled in Medicare as either a critical access hospital (CAH) or rural hospital with 50 or fewer beds. In order for a CAH or rural hospital to transition enrollment to the new REH designation, the provider must submit a detailed transition plan to CMS listing which services the hospital will retain, modify, add, or discontinue. REHs will be required to furnish emergency department services and observation care and may provide other outpatient medical and health services as specified by HHS. Through an RFI in the CY 2022 proposed rule, CMS solicits public input on a broad range of issues that should be taken into account in establishing this new provider type. For example, CMS is interested in feedback on the health and safety standards, payment policies, and quality measures for REHs. Public comment on these areas will help inform proposed rulemaking for CY 2023. CMS also intends to host other opportunities for public engagement as it considers policies related to establishing the REH provider type, including open door forums and listening sessions. RFI: Safe Use of Opioids - Concurrent Prescribing eCQM (NQF # 3316e) and eCQM Reporting Requirements in the Hospital Inpatient Quality Reporting (IQR) Program The Hospital IQR Program is a pay-for-reporting quality program that requires hospitals to submit quality data or receive a one-fourth reduction in their Annual Payment Update under the Inpatient Prospective Payment System (IPPS). The Medicare Promoting Interoperability Program for eligible hospitals (EHs) and CAHs began in 2011 and includes meaningful use of certified EHR technology as a component of the program. Currently hospitals are required to report three self-selected eCQMs as well as 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. CMS seeks input regarding the Safe Use of Opioids—Concurrent Prescribing electronic clinical quality measure (eCQM) (NQF # 3316e) (hereinafter referred to as the “Safe Use of Opioids eCQM”) as well as the agency’s previously finalized policy of requiring hospitals to report on the Safe Use of Opioids eCQM beginning with the CY 2022 reporting period. CMS notes that stakeholders have raised concerns that requiring reporting on the Safe Use of Opioids eCQM could disincentivize clinicians from appropriately concurrently prescribing medications for the treatment of opioid use disorder (OUD), such as methadone and buprenorphine. Stakeholders believe that hospitals are required to report on this measure, clinicians might alter their prescribing practices, making it more difficult for patients to access appropriate treatment for OUD. In this RFI, CMS seeks public input on potential future measure updates of the Safe Use of Opioids eCQM and on the appropriateness of maintaining this previously finalized policy to require hospitals to report the measure or modifying the policy to allow hospitals to self-select the Safe Use of Opioids eCQM. AHIP.ORG 7
RFI: Advancing to Digital Quality Measurement and the Use of Fast Healthcare Interoperability Resources (FHIR) in Outpatient Quality Programs CMS reiterates its plan to fully transition its quality reporting and value-based purchasing programs to digital quality measurement by 2025. CMS seeks comments on the agency’s future plans to modernize its quality measurement enterprise: • The potential definition of digital quality measures; • Standardizing data required for quality measures for collection via Fast Healthcare Interoperability Resources (FHIR®)-based Application Programming Interfaces (APIs); • Leveraging technological opportunities to facilitate digital quality measurement; • Better supporting data aggregation; and • Developing a common portfolio of measures for potential alignment across CMS regulated programs, federal programs and agencies, and the private sector. Radiation Oncology (RO) Model On September 29, 2020, CMS published a final rule entitled “Specialty Care Models to Improve Quality of Care and Reduce Expenditures” that codified the creation of the RO alternative payment model (APM) in order to test whether site-neutral, modality agnostic, prospective bundled payments for radiotherapy would reduce Medicare expenditures while maintaining or enhancing quality of care. The model would be mandatory for physician group practices, hospital outpatient departments, and freestanding radiation therapy centers that deliver radiotherapy services and are located in a randomly selected geographic region, unless specifically exempted under predetermined rules. Participant-specific payment amounts would be determined by CMS based on national base rates, trend factors, and adjustments for each participant’s case-mix, historical experience, and geographic location. CMS would further adjust payment amounts by applying a discount factor. The discount factor, or the set percentage by which CMS would reduce an episode payment amount, would reserve savings for Medicare and reduces beneficiary cost-sharing. The RO model was slated to begin on Jan. 1, 2021 but was delayed by CMS for six months. Subsequently, through the CAA, Congress further delayed implementation such that the RO model could begin no earlier than January 1, 2022. CMS now proposes to begin implementation of the RO model on January 1, 2022, the earliest date permitted under statute, for a five-year period that ends December 31, 2026. CMS also proposes additional updates to model methodologies and details, including: • Shifting the baseline pricing period to 2017-2019, from 2016-2018; • Removing liver cancer from inclusion in the model; • Removing Brachytherapy from included radiotherapy services; • Lowering the professional component discount to 3.5%, from 3.75%, and the technical component discount to 4.5%, from 4.75%; • Proposing that in cases where a beneficiary switches from traditional fee-for-service (FFS) to Medicare Advantage plan during an episode before treatment is complete, to consider the episode incomplete and radiotherapy services would be paid under FFS as opposed to the RO bundled payment. AHIP.ORG 8
• Adding an extreme and uncontrollable circumstances policy to reduce administrative burden for model participation, including reporting requirements, and/or adjust the payment methodology as necessary. Comment Solicitation: Temporary Policies for the PHE for COVID-19 CMS seeks comment on certain flexibilities implemented in response to the COVID-19 PHE: mental health and other services furnished by hospital staff to beneficiaries in their homes through use of communication technology; providers furnishing services in which the direct supervision for cardiac rehabilitation, intensive cardiac rehabilitation, and pulmonary rehabilitation services requirement was met by the supervising practitioner being available through audio/video real-time communications technology; and the need for specific coding and payment to remain available under the OPPS for specimen collection for COVID-19. AHIP.ORG 9
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