CMS Issues CY 2024 OPPS and ASC Payment System Proposed Rule

Additional Details

Payment Updates

• OPPS Rate: CMS is proposing to update OPPS payment rates for hospitals that meet applicable quality reporting requirements by 2.8%, which is based on a projected hospital market basket update of 3.0% and a 0.2 percentage point reduction for the productivity adjustment. CMS is also proposing to maintain the statutory 2.0 percentage point reduction in payment for hospitals that fail to meet the hospital outpatient quality reporting requirements.
• ASC Rate: In CY 2019, CMS finalized its proposal to apply the productivity-adjusted hospital market basket update to the ASC payment system in addition to the OPPS system for an interim period of five years (CY 2019 to CY 2023). In this rule, CMS is proposing to continue applying this market basket to ASC payment rates for an additional two years. As such, CMS is proposing a CY 2024 payment update for ASC rates of 2.8%.
• Rural Emergency Hospitals (REHs), Indian Health Service (IHS) Facilities, and Tribal Facilities: For tribal and IHS hospitals that convert to an REH, CMS is proposing to pay providers under the same all-included-rate (AIR) methodology that would apply to IHS and tribal facilities that are not an REH. CMS also is proposing that IHS and tribal facilities that convert to REHs would receive the REH monthly facility payment. CMS intends that these proposed changes, if finalized, would help stabilize IHS facilities that convert to REHs and promote access to tribal and IHS hospitals.
• 340B Drugs: CMS is proposing to continue to pay 340B-eligible hospitals at the statutory default rate, generally ASP plus 6%, for 340B-acquired drugs and biologicals.
  • Of note, CMS issued a related proposed rule on July 7, 2023, discussing the proposed remedy for underpayment to 340B-eligible hospitals for 340B-acquired drugs from CY 2018 to CY 2022. This remedy would include an estimated $9 billion lump sum payment for roughly 1,600 hospitals, which would be funded by future reductions to OPPS payments to all hospitals spread over a 15-year period. See ECG’s summary of that release here.

Behavioral Health Programmatic Changes and Proposals

• Changes to PHP: The PHP is an intensive outpatient program designed to serve as an alternative to psychiatric hospitalization and is paid on a per diem basis under the OPPS. CMS is proposing to expand the PHP’s existing rate structure by adding two Ambulatory Payment Classifications (APCs) for each provider type. This would include one rate for days with three services per day and one rate for days with four or more services per day. CMS is also proposing to calculate these rates using OPPS data, including PHP and non-PHP days. The current methodology only uses PHP data. This payment structure would also apply to the newly proposed IOP outlined below.
• Proposed IOP: CMS is proposing to establish the IOP under Medicare. This proposal is intended to address gaps in behavioral health coverage within Medicare and promote access. An IOP is a distinct outpatient program of psychiatric services provided for individuals who have an acute mental illness or substance use disorder.
  • CMS is proposing that IOP services may be furnished in hospital outpatient departments, Community Mental Health Centers (CMHCs), Federally Qualified Health Centers (FQHCs), and Rural Health Clinics (RHCs).
  • CMS is proposing to base the per diem payment for these behavioral health services either as part of the PHP benefit or under the OPPS more generally. As reflected in the proposed PHP changes above, CMS is proposing to establish two APCs (one rate for days with three services, and one for days with four or more services) and to base payment rates on cost per day using a broader set of OPPS data that includes both PHP days and non-PHP days.
  • For CY 2024, CMS is also proposing to extend IOP coverage to include opioid treatment programs (OTPs). To support this, CMS proposes the establishment of a weekly payment adjustment via an add-on code for IOP services furnished by OTPs.
• Changes to CMHC Condition of Participation (CoP): To implement provisions established by the Consolidated Appropriations Act (CAA) of 2023, CMS is proposing to modify requirements for CMHCs to include IOP services throughout the CoP. Finally, CMS is proposing to modify personnel qualifications to include a revised definition of a mental health counselor and add marriage and family therapists.

Quality Programs

• CMS is proposing to modify, add, and remove several measures within the Hospital Outpatient Quality Reporting (OQR) and the Ambulatory Surgical Center Quality Reporting (ASCQR) Programs, as follows:
  • Proposed Measures for Adoption:
    • Risk-Standardized Patient-Reported Outcomes Following Elective Primary Total Hip and/or Total Knee Arthroplasty measure to provide specific insight into the quality of care of a common procedure
    • Hospital Outpatient/ASC Facility Volume Data on Selected Outpatient Surgical Procedures measures with modifications from the previously adopted version of the measures that were removed from the programs to increase measure granularity
    • [Proposed for adoption in Hospital OQR Only] Excessive Radiation Dose or Inadequate Image Quality for Diagnostic Computed Tomography (CT) in Adults electronic clinical quality measure (eCQM) to promote patient safety
  • Proposed Measure to Be Removed:
    • Left without Being Seen measure, as it does not provide actionable information in sufficient detail to improve quality or patient outcomes
  • Proposed Measures for Modification:
    • COVID-19 Vaccination Coverage Among Healthcare Personnel (HCP) measure to align with the updated Centers for Disease Control and Prevention (CDC) National Healthcare Safety Network measure specifications
    • Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery to further standardize the survey instrument, improve data collection, and reduce facility burden
    • Appropriate Follow-Up Interval for Normal Colonoscopy in Average Risk Patients measure to align with updated clinical guidelines
• Within the Rural Emergency Hospital Quality Reporting (REHQR) Program, CMS is proposing the adoption of four initial measures, including three claims-based measures and one chart-abstracted measure as follows:
  • Abdomen CT: Use of Contrast Material
  • Median Time from Emergency Department (ED) Arrival to ED Departure for Discharged ED Patients
  • Facility 7‑Day Risk‑Standardized Hospital Visit Rate after Outpatient Colonoscopy
  • Risk-Standardized Hospital Visits within Seven Days after Hospital Outpatient Surgery

Other Updates

• To strengthen compliance around use of hospital price transparency data, CMS is proposing to modify the standard charge display requirements at 45 CFR 180.50. Additionally, CMS is proposing to update the enforcement provisions at 45 CFR 180.70 to streamline and improve the transparency of the enforcement process.

_{Edited by: Matt Maslin}

Published July 17, 2023