On November 1, 2022, CMS finalized Medicare payment rates for hospital outpatient and ASC services beginning January 1, calendar Year (CY) 2023.
Today’s blog highlights the key takeaways from the CY 2023 Medicare Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System Final Rule.1
This year’s rule, includes policies to address the following:
Payment rates
Health equity gap
Fighting the COVID-19 Public Health Emergency (PHE)
Encouraging transparency in the health system
Promoting safe, effective, and patient-centered care
According to CMS, these policies will affect approximately 3,500 hospitals and 6,000 ASCs nationwide.
For more information and additional details, the final rule can be downloaded at: https://public-inspection.federalregister.gov/2022-23918.pdf
For CY 2023, CMS is increasing OPPS payment rates for hospitals that meet applicable quality reporting requirements by an Outpatient Department fee schedule increase factor or 3.8%. This update is based on the projected hospital market basket percentage increase of 4.1%, reduced by 0.3 percentage point for the productivity adjustment.
Effective January 1, 2023, Medicare will recognize Rural Emergency Hospital (REH) as a new provider type. Established by the Consolidated Appropriates Act, 2021, the new REH provider type works to address “the growing concern over closures of rural hospitals by providing an opportunity for Critical Access Hospitals (CAHs) and certain rural hospitals to avert potential closure and continue to provide essential services for the community they survey. Conversion to an REH allows the facility to continue providing emergency services, observation care, and, if elected by the REH, additional medical and health outpatient services, that do not exceed an annual per patient average of 24 hours.”2
Following the Supreme Court’s decision in American Hospital Association v. Becerra, CMS is finalizing a default payment rate of ASP plus 6% for drugs and biologicals acquired through the 340B Program for CY 2023. This final rule is consistent with CMS’ policy for drugs not acquired through the 340B program. As required by statue, CMS is implementing a –3.09% reduction to the payment rates for non-drug services to achieve budget neutrality for the 340B drug payment rate change for CY 2023.
Allowing behavioral health services furnished remotely by clinical staff of hospital outpatient departments, using telecommunications technology to beneficiaries in their homes is currently available through the Hospitals Without Walls PHE policy that is set to expire when the PHE for COVID-19 ends.
As of CY 2023, CMS will require that payment for behavioral health services provided remotely to beneficiaries in their homes may only be made if the beneficiary receives an in-person service within 6-months prior to the first time hospital clinical staff provides the behavioral health services remotely, and that there must be an in-person service without the use of communications technology within 12 months of each behavioral health service furnished remotely by hospital clinical staff. CMS is finalizing its proposal to allow exceptions to the in-person visit requirement when the hospital clinical staff member and beneficiary agree that the risks and burdens of an in-person service outweigh the benefits of it, among other requirements.
In addition, in cases where there is an ongoing clinical relationship between practitioner and beneficiary at the time the PHE ends, the in-person requirement for ongoing, not newly initiated, treatment will apply. The proposal also allows for cases where audio-only interactive telecommunications systems may be used for instances where the beneficiary is unable, does not wish to, or does not have access to two-way, audio/video technology.
CMS is to provide payment adjustments that would reflect, and offset, the additional marginal resource costs that hospitals cope with in procuring domestically made NIOSH-approved surgical N95 respirators. Under this policy, payments would be provided biweekly as interim lump-sum payments to the hospital and would be reconciled at cost report settlement.
CMS is finalizing its proposal to exempt Rural Sole Community Hospitals (SCHs) from its policy in which CMS pays the physician fee schedule - equivalent rate, a payment rate of approximately 40% of the OPPS, for the clinic visit service when provided at an excepted off-campus provider-based department paid under the OPPS. Instead, CMS will pay for clinic visits furnished in excepted off-campus provider-based departments of these hospitals at the full OPPS rate.
To improve payment accuracy and maintain organ availability for the research community, CMS is finalizing its proposal for a method of accounting for research organs. CMS is also finalizing its proposal to address potential financial barriers to organ donation after cardiac death to increase organ procurement and promote equity within the transplant ecosystem.
CMS, received of eight pass-through applications for device pass-through payment.
One application (aprevo™ Intervertebral Fusion Device) received preliminary approval for pass- through payment status through our quarterly review process
Four devices qualified, or continued to qualify, for transitional device pass-through status effective January 1, 2023
The remaining devices did not meet at least one of the eligibility criteria and did not qualify for device pass-through payments
Additionally, CMS is finalizing its proposal to resume its usual process of using claims data from two years prior to the year to set rates for the calendar year. Therefore, CMS will not provide any additional quarters of separate payment for any device category whose pass-through payment status will expire between December 31, 2022, and September 30, 2023.
CMS is also finalizing its proposal to publicly post the completed OPPS device pass-through application forms and related materials that we receive from applicants online (excluding certain copyright and other materials that cannot otherwise be released to the public). CMS will post all OPPS device pass-through applications for the CY 2025 OPPS proposed rule beginning with applications received on or after March 1, 2023.
Software as a service (SaaS) is an algorithm-driven service that assists practitioners in making clinical assessment. These services may include clinical decision support software, clinical risk modeling, and computer aided detection (CAD).
For CY 2023, CMS is finalizing a payment approach with an exception to its general packaging policy for SaaS add-on codes. In this final rule, add-on codes will be assigned to identical APCs and have the same status indicator assignments as their standalone codes, thus allowing for separate payment for these services.
For CY 2023, CMS is implementing the following changes for billing of covered dental services:
Creating a new G-code to describe dental rehabilitation services that require monitored anesthesia and the use of an operating room (OR)
Assigning the new G-code to APC 5871 (Dental Procedures), to increase the payment for these dental rehabilitation services from about $200 to about $2000
The new G-code can be used to bill for covered services furnished to patients with special health needs that require general anesthesia in an OR to receive dental care
Clarifying that the existing unlisted CPT code 41899 should be used to bill for covered, non-surgical dental services, or surgical dental services not performed under monitored anesthesia in an OR, not otherwise described by existing dental codes already assigned to an APC.
As well as clarifying that for Medicare payment to be made for dental services, including services that may be described by G0330, Medicare coverage requirements for dental services as finalized in the CY 2023 PFS final rule, must be met
CMS did not finalize its proposal to change the terminology of skin substitutes and believes that additional dialogue is needed before these changes can be made.
CMS is however finalizing its policy to eliminate HCPCS code C1849, the code that providers have been using in the OPPS to report the usage of synthetic skin substitute products. Instead, providers should now use product-specific HCPCS codes for synthetic skin substitute products that are currently described by HCPCS code C1849. Furthermore, CMS also finalized a policy to assign any synthetic skin substitute product that is currently described by HCPCS code C1849, would have been described by HCPCS code C1849, or is assigned a code in the HCPCS A2XXX series, to the high-cost skin substitute group, even if cost and pricing data are not available for any individual product.
Partial Hospitalization Program (PHP) Rate Setting
CMS updated Medicare payment rates for partial hospitalization program (PHP) services furnished in hospital outpatient departments and community mental health centers (CMHCs). The PHP is an outpatient program provided as an alternative to psychiatric hospitalization, consisting of a group of mental health services paid on a per diem basis under the OPPS based on PHP per diem costs.
Update to PHP Per Diem Rates
CMS is finalizing its proposal to maintain the existing rate structure. This structure consists of a single PHP Ambulatory Payment Classification (APC) for each provider type, for days with three or more services per day.
Based on public comments and in order to protect access to PHP services in CMHCs, CMS is finalizing for only CY 2023, and not for subsequent years, to utilize the authority set forth in section 1833(t)(2)(E) of the Act to make an equitable adjustment to the CY 2023 CMHC APC payment rate. Meaning, for only CY 2023, CMS will maintain the CY 2022 CMHC APC payment rate of $142.70 for the CY 2023 CMHC APC final payment rate.
Non-PHP Outpatient Behavioral Health Services Furnished Remotely to Partial Hospitalization Patients
CMS is clarifying that the new HCPCS being adopted under the OPPS describing certain behavioral health therapy services furnished remotely in their homes will not be acknowledged as partial hospitalization services. These services will instead be available to those in a partial hospitalization program. Specifically, a hospital could bill for non-PHP outpatient services furnished to a PHP patient, including remote therapy services furnished by a hospital outpatient department. Hospitals will be permitted to bill for these remote non-PHP behavioral health services, but will need to continue to comply with documentation requirements that apply to PHP patients.
Hospital Outpatient/ASC/REH Quality Reporting Programs
CMS is still finalizing changes and responding to requests for comment to the following programs, to further meaningful measurement and reporting for quality of care in the outpatient setting:
· Hospital Outpatient Quality Reporting (OQR)
· Ambulatory Surgical Center Quality Reporting (ASCQR)
· Rural Emergency Hospital Quality Reporting (REHQR)
Hospital Outpatient Quality Reporting (OQR) Program
The Hospital OQR Program is a pay-for-reporting quality program for the hospital outpatient department setting. The Hospital OQR Program requires hospitals to meet program requirements or receive 2.0 percentage points reduction in their annual payment update.
In the final rule, CMS is finalizing a change to maintaining voluntary reporting of the Cataracts: Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery (OP-31) measure due to the ongoing COVID-19 public health emergency (PHE). Interested parties have expressed concern about reporting burden of this measure given the ongoing COVID-19 PHE, and that the requirement to report OP-31 would be burdensome due to national staffing and medical supply shortages, coupled with unprecedented changes in patient case volumes.
CMS is also finalizing the alignment of Hospital OQR Program patient encounter quarters for chart-abstracted measures to the calendar year, to align the patient encounter quarters for chart-abstracted measure with the calendar year beginning with CY 2024 reporting period/CY 2026 payment determination.
Ambulatory Surgical Center Quality Reporting (ASCQR) Program
The ASCQR Program is a pay-for-reporting quality program for the ASC setting. The ASCQR Program requires ASCs to meet program requirements or receive a 2.0 percentage points reduction in their annual fee schedule update.
As with the proposal in the Hospital OQR Program, CMS is finalizing a policy of maintaining voluntary reporting of the Cataracts: Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery (ASC-11) measure due to the ongoing COVID-19 public health emergency (PHE). Interested parties have indicated that they are still recovering from the COVID-19 PHE, and that the requirement to report ASC-11 would be burdensome due to national staffing and medical supply shortages, coupled with unprecedented changes in patient case volumes.
Rural Emergency Hospital Quality Reporting (REHQR) Program
Under section 1861(kkk)(7) of the Act, the Secretary is required to establish quality measurement reporting requirements for REHs, which may include the use of a small number of claims-based measures or patient experience surveys. An REH must submit quality measure data to the Secretary, and the Secretary shall establish procedures to make the data available to the public on a CMS website.
CMS is finalizing that, for REHs to participate in the REHQR Program, they must have an account with the Hospital Quality Reporting (HQR) System secure portal and a designated Security Official (SO).
CMS also intends to propose additional administrative requirements for the REHQR Program in subsequent rulemaking.
CMS. CY 2023 Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System Final Rule with Comment Period (CMS 1772-FC). Accessed Nov.14, 2022. https://www.cms.gov/newsroom/fact-sheets/cy-2023-medicare-hospital-outpatient-prospective-payment-system-and-ambulatory-surgical-center-2
CMS. CY 2023 Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System Final Rule (CMS 1772-FC) Rural Emergency Hospitals — New Medicare Provider Type. Accessed Nov. 14, 2022. https://www.cms.gov/newsroom/fact-sheets/cy-2023-medicare-hospital-outpatient-prospective-payment-system-and-ambulatory-surgical-center-1