Medicare Hospital OPPS and ASC Payment System Final Rule for CY 2020

November 2019 ~

On November 1, CMS finalized policies that intend to increase choices, encourage medical innovation, empower patients, and eliminate waste, fraud, and abuse to protect seniors and taxpayers.

According to the CMS fact sheet, these changes build on the agency’s existing efforts to increase patient choice by making Medicare payment available for more services in different sites of services and adopting policy changes under the Medicare Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System. A summary of the major provisions included in the final rule can be seen below.

Increasing Choices and Encouraging Site Neutrality

The final rule includes a policy that continues to eliminate payment differences between certain outpatient sites of service so that patients can benefit from high-quality care at lower costs, and are better able to receive care that is provided safely and is clinically appropriate.

Method to Control for Unnecessary Increases in Utilization of Outpatient Services

CMS is completing the two-year phase-in of the method to reduce unnecessary utilization in outpatient services by addressing payments for clinic visits furnished in the off-campus hospital outpatient setting. With the completion of the two-year phase-in, the cost sharing will be reduced to $9, saving beneficiaries an average of $14 each time they visit an off-campus department for a clinic visit in CY 2020.

Changes to the Inpatient Only List

This rule finalizes changes to the Inpatient Only (IPO) list including removal of total hip arthroplasty, six spinal surgical procedures and certain anesthesia services from the list, making these procedures eligible to be paid by Medicare in the hospital outpatient setting in addition to the hospital inpatient setting.

Additionally, CMS is establishing a two-year exemption (instead of one year, previously proposed) from certain medical review activities relating to patient status for procedures removed from the inpatient-only list beginning in CY 2020 and subsequent years.

Under this policy, Beneficiary Family Centered Care-Quality Improvement Organization (BFCC-QIO) reviews of short-stay inpatient claims for procedures that have been removed from the IPO list within the first two years will be for medical necessity of the underlying services and to educate providers and practitioners regarding compliance with the 2-midnight rule, but claims will not be denied based on patient status (that is, site of service) alone. These procedures will also not be eligible for referral to the Recovery Audit Contractor (RAC) for noncompliance with the 2-midnight rule for a two-year period after their removal from the IPO list.

ASC Covered Procedures List

For CY 2020, CMS is adding Total Knee Arthroplasty (TKA), Knee Mosaicplasty, six additional coronary intervention procedures, and twelve procedures with new CPT codes to the ASC CPL.

Payment for Procedures Involving Skin Substitutes

For CY 2020, CMS is finalizing its proposal to continue the policy to assign skin substitutes to the low-cost or high-cost group, while continuing to consider comments received on episode-based payment or a single category of payment for services involving such products for future policy refinement.

Rethinking Rural Health

Changes in the Level of Supervision of Outpatient Therapeutic Services in Hospitals and Critical Access Hospitals (CAHs)

CMS is finalizing a change to the generally applicable minimum required level of supervision for hospital outpatient therapeutic services furnished by all hospitals and CAHs from direct supervision to general supervision. This change does not preclude a hospital from requiring a higher level of supervision for certain services, as it determines appropriate.

Addressing Wage Index Disparities

For CY 2020, CMS will use the post-reclassified wage index for urban and rural areas as the wage index for the OPPS to determine the wage adjustments for both the OPPS payment rate and the copayment standardized amount. The adjustments for the FY 2020 IPPS post-reclassified wage index, including, but not limited to, the policies finalized under the IPPS to address wage index disparities between low and high wage index value hospitals would be reflected in the final CY 2020 OPPS wage index beginning on January 1, 2020.

CMS is also finalizing for the OPPS the other wage index policies adopted in the FY 2020 IPPS final rule.

Unleashing Innovation

Under the CY 2020 OPPS/ASC final rule, CMS is “taking steps to unleash innovation in medical technology and remove obstacles for beneficiaries in accessing new, innovative technologies and treatments”.

Device Pass-through Applications

Effective January 1, 2020, CMS is approving five device pass-through applications that meet the criteria to be granted transitional pass-through status for a period of three years, including AquaBeam® Robotic System, AUGMENT® Bone Graft, Surefire® Spark Infusion System, Optimizer® Smart System, and CustomFlex® ArtificialIris.

Protecting Taxpayer Dollars

In an effort to reduce unnecessary increases in the volume of covered outpatient department services, CMS is implementing a prior authorization requirement for Blepharoplasty, Botulinum Toxin Injections, Panniculectomy, Rhinoplasty, and Vein Ablation to help ensure these services, which are often cosmetic, and only covered by Medicare in limited circumstances, are billed only when medically necessary.

Meaningful Measures/Patients Over Paperwork

CMS is finalizing changes to the Hospital Outpatient Quality Reporting (OQR) and Ambulatory Surgical Center Quality Reporting (ASCQR) Programs to further meaningful measurement and reporting for quality of care in the outpatient surgical setting while limiting burden.

Hospital Outpatient Quality Reporting (OQR) Program

CMS is finalizing to remove one web-based measure for the CY 2022 Program Year from the Hospital OQR Program, External Beam Radiotherapy (EBRT) for Bone Metastases (OP-33). This removal is on the basis that the costs associated with the measure outweigh the benefit of its continued use in the program; the complexity of reporting this measure places substantial administrative burden on hospitals.

Ambulatory Surgical Center Quality Reporting (ASCQR) Program

CMS is adopting one claims-based measure beginning with the CY 2024 payment determination, ASC-19: Facility-Level 7-Day Hospital Visits after General Surgery Procedures Performed at Ambulatory Surgical Centers (NQF #3357).

CY 2020 OPPS Payment Methodology for 340B Purchased Drugs

For CY 2020, CMS is finalizing its proposal to continue to pay an adjusted amount of ASP minus 22.5 percent for separately payable drugs or biologicals that are acquired through the 340B Program.

Updates to OPPS Payment Rates

In accordance with Medicare law, CMS is updating OPPS payment rates for hospitals that meet applicable quality reporting requirements by 2.6 percent. This update is based on the projected hospital market basket increase of 3.0 percent minus a 0.4 percentage point adjustment for multi-factor productivity (MFP).

Partial Hospitalization Program (PHP) Rate Setting

The CY 2020 OPPS/ASC final rule updates Medicare payment rates for Partial Hospitalization Program (PHP) services furnished in hospital outpatient departments and Community Mental Health Centers (CMHCs).

Update to PHP Per Diem Rates

CMS is finalizing this policy as proposed and will maintain the unified rate structure established in CY 2017, with a single PHP APC for each provider type for days with three or more services per day.

Updates to ASC Payment Rates

CMS has finalized the proposal to apply the hospital market basket update to ASC payment system rates for an interim period of 5 years (CY 2019 through CY 2023). The agency did not propose any changes to its policy to use the hospital market basket update for ASC payment rates for CY 2020-2023.

Using the hospital market basket, CMS is finalizing an update to the ASC rates for CY 2020 equal to 2.6 percent. The update applies to ASCs meeting relevant quality reporting requirements. This change is based on the projected hospital market basket increase of 3.0 percent minus a 0.4 percentage point adjustment for MFP.

Revision to the Organ Procurement Organization Conditions for Certification

MS is temporarily suspending the requirement that OPOs meet two of three outcome measures for the 2022 recertification cycle only. Therefore, all OPOs are not required to meet the standards of the second outcome measure for the 2022 recertification cycle only. OPOs must instead meet one of two outcome measures (the donation rate of eligible donors measure or the aggregate donor yield measure).

For more information, view the CMS Fact Sheet or see the Final Rule in its full text on the Federal Register.



Source(s): CMS MLN Connects, Special Edition, Friday, November 1, 2019; American Hospital Association; Becker’s Hospital CFO Report; ASCRS;