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Final Payment Rules – Calendar Year (CY) 2022

On November 2, 2021, the Centers for Medicare & Medicaid Services (CMS) issued the final rules for Calendar Year (CY) 2022 Outpatient Prospective Payment System (OPPS), CY 2022 Physician Fee Schedule, and CY 2022 Home Health PPS.

CY 2022 Medicare Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System Final Rule (CMS-1753-FC).
OPPS & ASC Payment Rates
Both the OPPS and ASC payment rates for hospitals that meet applicable quality reporting requirements will be increased by 2.0 percent (2.7 percent less 0.7 percentage point productivity adjustment.
Price Transparency
Proposed Increase in Civil Monetary Penalties (CMP) for noncompliance will be scaled by bed size (range $109,500 to $2,007,500 per hospital). Smaller hospitals with 30 or fewer beds are subject to a fine equal to $300 per day. Hospitals with a bed count between 31-550 beds are subject to a fine between $310 to $550 per day with a maximum penalty $2,007,500. Hospitals with a bed count of 551 or greater beds, are subject to a fine equal to $2,007,500 per hospital.
CMS is also requiring machine-readable files are accessible for automated searches and direct downloads.
Toyon’s Take
These fines emphasize CMS’s push to provide public access to pricing information.
Use of CY 2019 Claims Data for CY 2022 OPPS/ASC Ratesetting
CMS believes the best available data for projecting expected cost and OPPS/ASC payment derives from calendar year 2019, prior to the COVID-19 Public Health Emergency (PHE). Conventionally, CMS would have used the most recent data (from 2020) for ratesetting.
Toyon’s Take
Toyon recommends providers regularly evaluate CY 2022 OPPS/ASC payments to ascertain the reasonableness of CMS’s projection that CY 2022 cost and volumes will be more reflective of 2019 levels as compared to 2020. When areas of the country “normalize” from COVID-19 PHE, then it is best to use data from prior to the outbreak to project CY 2022 OPPS/ASC payments. Notably, CY 2020 data may not be used in future rates.
Changes to the Medicare Inpatient Only (IPO) List
In CY 2022 CMS will add back all codes to the IPO list, except CPT codes 22630 (Lumbar spine fusion), 23472 (Reconstruct shoulder joint), 27702 (Reconstruct ankle joint) and their corresponding anesthesia codes. Also, the planned elimination of the IPO list will be put on hold until further notice. See this link.
Toyon’s Take
Requiring certain services as inpatient only is a noteworthy change in course from the CY 2021 OPPS/ASC final rule initially eliminating 298 services from the IPO list. CY 2021 was also scheduled to be year one of a three-year process to phase out the entire IPO list. However, CMS listened to stakeholder comments and agrees patient safety is the main concern. Medicare continuously desires to provide their beneficiaries a choice, therefore is using additional time to review procedures and outcomes of IPO services.
OPPS and 340B
CMS is continuing to pay hospitals 22.5 percent less the Average Sales Price (ASP) for select 340B drugs.
Click here for the link to the display copy of the OPPS/ASC final rule; the document is scheduled to be published in the federal register on 11/16/2021.

CY 2022 Medicare Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System Final Rule (CMS-1751-F).
Telehealth Expansion for Behavioral Health
The COVID-19 PHE shows gaps in healthcare delivery and the need for technology to treat patients, especially patients located in remote communities. CMS, in this rule, is eliminating barriers and will allow patients to access telehealth services in their homes, for the diagnosis, evaluation, and treatment of mental health disorders.
Medicare will also cover mental health visits in Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) through telehealth technologies, including audio only calls.
Increasing Access to Physician Assistants’ (PA) Services
CMS will institute a change that will authorize Medicare to make direct Medicare payments to Physician Assistants (PAs) for professional services they furnish under Part B. Beginning January 1, 2022 PAs are permitted to bill Medicare directly. This change allows greater access to care for Medicare beneficiaries. 
Medicare Ground Ambulance Data Collection System
CMS finalized changes to the Medicare Ground Ambulance Data Collection System including:
  • Finalizing a new data collection period beginning between January 1, 2023, and December 31, 2023, and a new data reporting period beginning between January 1, 2024, and December 31, 2024, for selected ground ambulance organizations in year three;
  • Revising the timeline for when the payment reduction for failure to report will begin aligning the timelines for the application of penalties for not reporting data; and
  • Amending to the Medicare Ground Ambulance Data Collection Instrument. This will improve its clarity and make the instrument less burdensome to complete.

Click here for the link to the display copy of the Physician Fee Schedule; the document is scheduled to be published in the federal register on 11/19/2021.

CY 2022 Home Health Prospective Payment System Rate Update Final Rule (CMS-1747-F & CMS-5531-F)
CY 2022 Updates to the Home Health (HH) PPS rates
The final rule updates CY 2022 Medicare Home Health (HH) payment rates by 2.6 percent and uses the latest Core-Based Statistical Area (CBSA) delineations as well as the latest available pre-reclassified hospital wage data under the Medicare IPPS.

CY 2022 Updates to Home Health Quality Reporting Program
The Home Health QRP is a program that reports quality data to CMS. All HHAs that do not meet reporting requirements receive a 2-percentage point reduction to their annual market basket percentage update for the respective calendar year. In this final rule the OASIS-based measure is removed as it did not demonstrate any meaningful difference in performance. Two claim-based measures will be replaced with a new measure that surrounding attribution and associated with desired patient outcomes.
CMS is finalizing its proposal that effective January 1, 2023, HHAs begin collecting data on the Transfer of Health Information to Provider-Post Acute Care measure, the Transfer of Health Information to Patient-PAC measure, as well as six categories of standardized patient assessment data elements, to support the coordination of care.
Click here for the link to the display copy of the Home Health PPS update; the document is scheduled to be published in the federal register on 11/9/2021

For questions regarding these rules, please contact
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Final Rule – Hospital OP PPS Changes – CY 2017

From: Federal Register CMS-1656-FC & IFC – Filed 11/1/16; Published 11/14/16

Excerpts from CMS Fact Sheet:

Today, the Centers for Medicare & Medicaid Services (CMS) released the Calendar Year (CY) 2017 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System policy changes, quality provisions, and payment rates final rule with comment period (CMS-1656-FC). CMS is finalizing a number of OPPS and ASC policies that will improve the quality of care Medicare patients receive.

Additionally, CMS issued an Interim Final Rule with comment period (IFC) to establish Medicare Physician Fee Schedule (MPFS) rates for certain items and services furnished by certain off-campus outpatient departments of a provider (hereinafter referenced as off-campus provider-based departments (PBDs)) to address changes required by Section 603 of the Bipartisan Budget Act of 2015.

CMS also addressed comments made by health care providers on the patient experience survey questions about pain management and is finalizing the removal of the Pain Management dimension of the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey for purposes of the Hospital Value Based Purchasing Program.

This final rule with comment period is one of several rules for CY 2017 that reflect a broader Administration-wide strategy to create a health care system that results in better care, smarter spending, and healthier people.


Site Neutral Payments Provision (“Section 603”)

CMS is implementing Section 603 of the Bipartisan Budget Act of 2015 (Pub. L. 114-74) in the final rule with comment period and is establishing interim final payment rates under the Medicare Physician Fee Schedule (MPFS) in an IFC described in more detail below. As required by the statute, the final rule with comment period provides that certain items and services furnished by certain off-campus PBDs shall not be considered covered outpatient department services for purposes of OPPS payment and shall instead be paid “under the applicable payment system” beginning January 1, 2017. CMS is finalizing several policies relating to which off-campus PBDs and which items and services are “excepted” from application of the payment changes under this provision and thus will continue to be paid under the OPPS.

Excepted Items and Services – CMS is finalizing its proposals that certain off-campus PBDs would be permitted to continue to bill for excepted items and services under the OPPS. Excepted items and services are items and services furnished after January 1, 2017:

  • By a dedicated emergency department;
  • By an off-campus PBD that was billing for covered OPD services furnished prior to November 2, 2015, (i.e., the date of enactment of Section 603 of the Bipartisan Budget Act of 2015) that has not impermissibly relocated or changed ownership; or
  • In a PBD that is “on the campus,” or within 250 yards, of the hospital or a remote location of the hospital.

Service Expansions, Relocations, and Changes of Ownership

  • Service Expansion in an Excepted Off-Campus PBD –CMS proposed to limit the items and services that an excepted off-campus PBD could continue to bill under the OPPS beginning January 1, 2017, to those items and services within a clinical family that were furnished and billed as of November 2, 2015. Under the proposal, additional items and services beyond those within the clinical families of services furnished and billed prior to that date would not be excepted items and services paid under the OPPS. However, in response to public comments on administrative burden and complexity and potential beneficiary access issues, CMS is not finalizing this proposal. CMS will monitor expansion of clinical service lines by off-campus PBDs and continue to consider whether a potential limitation on service line expansion should be adopted in the future.
  • Relocation of Excepted Off-Campus PBDs – CMS is finalizing its proposal that items and services must continue to be furnished and billed at the same physical address of the off-campus PBD as was used as of November 2, 2015, in order for the off-campus PBD to be considered excepted from Section 603 requirements. The final relocation policy includes a notable change from the proposal to allow excepted off-campus PBDs to relocate temporarily or permanently without loss of excepted status due to extraordinary circumstances outside of the hospital’s control, such as natural disasters. Exceptions for extraordinary circumstances will be evaluated and determined by the applicable CMS Regional Office and are expected to be rare and unusual.
  • Changes of Ownership of Excepted Off-Campus PBDs – CMS is finalizing its proposal to allow an off-campus PBD to maintain its excepted status under the other rules outlined in this regulation if the hospital has a change of ownership and the new owners accept the existing Medicare provider agreement from the prior owner.

Applicable Payment System – For CY 2017, CMS is finalizing the MPFS to be the “applicable payment system” for non-excepted items and services furnished in a nonexcepted off-campus PBD. In light of public comment on the proposals regarding hospital billing and payment, CMS is issuing an IFC to establish new interim final MPFS rates so that hospitals may be paid for these nonexcepted items and services in CY 2017.

CMS-1656-IFC— Establishment of Payment Rates under the MPFS for Nonexcepted Items and Services Furnished by an Off-Campus Provider-Based Department of a Hospital

In conjunction with issuing the CY 2017 OPPS and ASC final rule with comment period, CMS also issued an IFC. The changes implemented through this IFC are intended to provide a billing mechanism for hospitals to report and receive payment under the MPFS for nonexcepted items and services furnished by off-campus PBDs to Medicare beneficiaries in CY 2017. Physicians furnishing such services will continue to be paid on the professional claim and will be paid at the facility rate under the MPFS consistent with current payment policies for physicians practicing in an institutional setting.

Under this IFC, CMS is establishing interim final site-specific rates under the MPFS for the technical component of all nonexcepted items and services. Hospitals will be paid under the MPFS at these newly established MPFS rates for nonexcepted items and services, which will be billed on the institutional claim and must be billed with a new claim line modifier “PN” to indicate that an item or service is a nonexcepted item or service. For CY 2017, the payment rate for these services will generally be 50 percent of the OPPS rate (there are some exceptions that are spelled out in the IFC, including that payment for separately payable drugs will not be reduced). Packaging, and certain other OPPS policies, will continue to apply to such services. We are seeking public comments on the new payment mechanisms and rates detailed in the IFC and, based on these comments, will make adjustments as necessary to the payment mechanisms and rates through rulemaking that could be effective in CY 2017.


OPPS Payment Update

For CY 2017, CMS is updating OPPS rates by 1.65 percent. The change is based on the projected hospital market basket increase of 2.7 percent minus both a 0.3 percentage point adjustment for multi-factor productivity (MFP) and a 0.75 percentage point adjustment required by law. After considering all other policy changes finalized under the OPPS, including estimated spending for pass-through payments, CMS estimates a 1.7 percent payment increase (before taking into account changes in volume and case mix) for hospitals paid under the OPPS in CY 2017.

Read more…

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AHA Faults CMS’s ‘short-sighted’ Policies on New Off-Campus PBDs

From: AHA News – 7/7/16
The AHA Wednesday expressed “extreme dismay” with the provisions for new off-campus hospital outpatient departments contained in the Centers for Medicare & Medicaid Services’ (CMS) outpatient prospective payment system (PPS) proposed rule for 2017.
“It appears that CMS is aiming to freeze the progress of hospital-based health care in its tracks,” AHA Executive Vice President Tom Nickels said of the regulations for new off-campus provider-based departments, or PBDs, contained in the agency’s July 6 proposed rule.
The rule proposes to implement the site-neutral provisions of Section 603 of the 2015 Bipartisan Budget Act. With the exception of dedicated emergency department services, the section requires services furnished in off-campus PBDs that began billing under outpatient PPS on or after Nov. 2, 2015 to no longer be paid under that outpatient payment system.
Instead these services would be paid under other applicable Part B payment systems beginning Jan. 1, 2017. CMS proposes that, in 2017, the physician fee schedule would be the applicable payment system for the site-neutral rates for the majority of services furnished in a new off-campus PBDs.
CMS would pay physicians furnishing services in these departments at the higher “nonfacility” PFS rate. There would be no payment made directly to the hospital by Medicare. Existing off-campus PBDs that expand their services to include those in new clinical families would receive the site-neutral rate for those services.
In addition, any existing off-campus PBD that relocates after Nov. 2 would lose its excepted status and be subject to site-neutral payments. An existing off-campus PBD that undergoes a change of ownership would only maintain its excepted status if the new owner accepts the existing Medicare provider agreement from the prior owner.
“We are extremely dismayed by the short-sighted policies” in the proposed rule, Nickels said. He said the AHA will submit detailed comments to the agency urging it to revise “these misguided policies so that hospitals can continue to provide the highest quality health care to their communities.”
PPS update. In the rule, CMS proposed to update outpatient PPS rates by 1.55% in 2017 compared to 2016.
Meaningful use. As urged by the AHA, CMS proposes to offer greater flexibility in the meaningful use of electronic health records under the Medicare program by shortening the reporting period for 2016 from a full year to 90 days for all hospitals and physicians. CMS also proposes, beginning in 2017, to remove two measures for eligible hospitals and critical access hospitals – computerized provider order entry and clinical decision support – and reduce the requirements for patients to view, download and transmit their information from 5% to at least one patient.
Stage 3 of meaningful use would still be required by all hospitals in 2018. However, the thresholds for most measures would be reduced to the level required in Modified Stage 2.
Quality reporting. For the CY 2020 outpatient quality reporting program, CMS proposes seven new measures – hospital admissions and ED visits for outpatient chemotherapy patients, hospital visits following outpatient surgery, and five measures derived from a new Outpatient and Ambulatory Surgical Center Consumer Assessment of Healthcare Providers and Systems (OAS CAHPS) survey.
The OAS CAHPS is a 37-item survey intended to assess the experience of care for patients that have received surgeries and other procedures in HOPDs and ASCs. CMS would require OAS CAHPS data to be collected and submitted quarterly starting with visits on Jan. 1, 2018. CMS proposes the same measures from the OAS CAHPS for the CY 2020 ASC Quality Reporting Program.
Comments on the proposed rule are due Sept. 6.
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