The Center for Medicare & Medicaid Services (CMS) released their CY 2021 Medicare Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System Final Rule. Amid the pandemic, CMS has not made drastic (or many) changes to OPPS as to not burden physicians. The motives behind a few changes were greater patient access to procedures in the outpatient and ambulatory setting and physician autonomy. There were also drugs losing pass-through status in the next calendar year, notably Yescarta & Kymriah.
Payment Methodology for 340B Purchased Drugs
The 340B program (340B) was created to help vulnerable or uninsured patients access prescription medicines at safety-net facilities. Under 340B, manufacturers provide mandatory drug discounts to covered entities (e.g. clinics & hospitals) as a condition of their drugs being covered by Medicaid. In 2018, CMS reevaluated whether paying its standard drug payments of Average Sale Price (ASP) plus 6 percent for drugs acquired through 340B was appropriate, given that 340B hospitals obtain heavily discounted medicines. This led to a policy of CMS paying an adjusted amount of ASP minus 22.5 percent for separately payable drugs or biologicals acquired under 340B. This policy has been subject to ongoing litigation but was upheld by the United States Court of Appeals for the D.C Circuit Court. The current 340B payment policy of paying ASP minus 22.5 percent for 340B-acquired drugs, will remain the same. Rural sole community hospitals, children’s hospitals, and PPS-exempt cancer hospitals remain exempted from this policy and will continue to be paid ASP+6 percent.
Elimination of the Inpatient Only List
Due to advances in medical technologies that have made minimally invasive, outpatient surgeries possible, CMS is eliminating the Inpatient Only (IPO) list. The inpatient only list is a list of procedures that would need more than 24-hours of stay to recover. By dismantling the IPO, CMS is not only valuing advances in medical technology but physician autonomy in determining care for their patients. Removal of the IPO will happen incrementally, the list will be completely phased out by CY 2024. For CY 2021, nearly 300 musculoskeletal-related services will be removed from the IPO, making these procedures eligible to be paid by Medicare in the hospital outpatient setting.
Procedures removed from the IPO list may become subject to medical review activities related to the 2-midnight rule. In the CY 2020 final rule, CMS finalized a two-year exemption from certain medical review activities related to the 2-midnight rule for procedures newly removed from the IPO list. Beginning in 2021, procedures removed from the IPO list will be indefinitely exempted from site-of-service claim denials under Medicare Part A. The exemption extends an adjustment period for providers to become accustomed to billing Medicare for services that were previously only paid on an inpatient basis. However, providers are still expected to bill in compliance with the 2-Midnight rule, but claims identified as noncompliant will not be denied with respect to the site-of-service under Medicare Part A. This exemption will last until claims data indicates that the procedure is more commonly performed in the outpatient setting than the inpatient setting.
OPPS & ASC Payment Rates
In the CY 2019 OPPS/ASC final rule, CMS finalized a 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). Continuing this ruling, for CY 2021 CMS is updating hospital & ASC payment rates for those that meet applicable quality reporting requirements by 2.4 percent. This update is based on the projected hospital market basket increase of 2.4 percent with a 0.0 percent adjustment for multi-factor productivity (MFP).
ASC Covered Procedures List
Beginning 2021, eleven procedures will be added to the ASC covered procedures list (CPL), including total hip arthroplasty (CPT 27130). An additional 267 surgical procedures will also be added to the ASC CPL in 2021. CMS is also revising their criteria for adding covered surgical procedures to the ASC CPL. Adding these various procedures to the CPL is another push by CMS to support physicians in their decision-making, specifically in site-of-service determinations. The pandemic and affordability also played a role in this decision. COVID-19 is creating capacity issues for hospitals and allowing services to be performed in lower-cost settings should help lower costs for Medicare beneficiaries.
CAR T Payment Updates in OPPS Final Rule
Tecartus gets a C Code (C9073). The OPPS 2021 Final Rules kept Yescarta’s Q Code (Q2041) with payment of $395,380. Kyrmiah’s Q Code – which covers its two indications for pediatric ALL and adult RR DLBCL – will have reduced payment in 2021 compared to the previous year. Kite’s Tecartus, the newly approved CAR T for mantle cell lymphoma, got a C Code (C9073), with payment that is based on WAC+3% rather than ASP+6%. Tecartus’ payment is $11,190 lower than Yescarta’s payment. The list price for Tecartus and Yescarta is $373,000, and the HCPCS codes for both products bundles leukapheresis and dose preparation procedures. Also note that pass-through status for Yescarta and Kymriah will expire in March 2021 , which means they won’t get reimbursed ASP+6% for 340B anymore – they’ll get ASP – 22.5%