CMS Releases CY 2021 OPPS and ASC Proposed Rule

On August 4, 2020, CMS posted the Hospital Outpatient Prospective System (“OPPS”) and Ambulatory Surgical Center (“ASC”) Proposed Rule for CY 2021. The Proposed Rule will be published in the Federal Register on August 12 and comments are due by October 5, 2020. The Fact Sheet for the proposed rule can be found here.

Major provisions of the Proposed Rule include:

OPPS/ASC Payment Update

Hospital outpatient departments and ASCs will both receive a 2.6 percent payment increase in CY 2021.

340B-Acquired Drugs

Proposes for CY 2021 and subsequent years to pay for drugs acquired under the 340B program at average sale price (“ASP”) minus 34.7 percent, plus an add-on of 6 percent of the product’s ASP, for a net payment rate of ASP minus 28.7 percent based on the results of the Hospital Acquisition Cost Survey for 340B-Acquired Specified Covered Drugs.
Proposes that Rural SCHs, PPS-exempt cancer hospitals and children’s hospitals would be exempted from the 340B payment policy for CY 2021 and subsequent years.
Proposes in the alternative to continue the current policy of paying ASP minus 22.5 percent for 340B-acquired drugs.

Physician-Owned Hospitals

Proposes: (1) removal of regulatory restrictions on high Medicaid facilities and (2) including beds in a physician-owned hospital’s baseline consistent with state law.

Partial Hospitalization Update

Proposes to 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.
Proposes to use the CMHC and hospital-based PHP (“HB PHP”) geometric mean per diem costs, consistent with existing policy, using updated data for each provider type and a cost floor equal to the CY 2019 final geometric mean per diem cost for each provider type.
Proposes to calculate the CY 2021 PHP APC per diem rate for HB PHPs based on updated cost data and to calculate the rate for CMHCs based on the proposed cost floor.

Inpatient Only List

Proposes to eliminate the Inpatient Only List over the course of three calendar years beginning with the removal of approximately 300 musculoskeletal-related services.

Medical Review of Certain Inpatient Admissions under Part A for CY 2021 and Subsequent Years (2-Midnight Rule)

Propose to continue a 2-year exemption from Beneficiary and Family-Centered Care Quality Improvement Organizations referrals to RACs and RAC reviews for “patient status” (that is, site-of-service) for procedures that are removed from the inpatient only list under the OPPS beginning on January 1, 2021.
Seeks comments on whether the 2-year exemption period continues to be appropriate, or if a longer or shorter period may be more warranted.

Comprehensive APCs

Proposes to create two new comprehensive APCs, including C-APC 5378 (Level 8 Urology and Related Services) and C–APC 5465 (Level 5 Neurostimulator and Related Procedures).

Changes to the Level of Supervision of Outpatient Therapeutic Services in Hospitals and CAHs

Proposes to change the minimum default level of supervision for non-surgical extended duration therapeutic services to general supervision for the entire service, including the initiation portion of the service, which had previously required direct supervision.
Proposes that, for CY 2021 and subsequent years, direct supervision for pulmonary rehabilitation, cardiac rehabilitation and intensive cardiac rehabilitation services would include virtual presence of the physician through audio/video real-time communications technology subject to the clinical judgment of the supervising physician.

Cancer Hospital Payment Adjustment

Proposes to continue to provide additional payments to cancer hospitals so that a cancer hospital’s payment-to-cost ratio after the additional payments is equal to the weighted average PCR for the other OPPS hospitals using the most recently submitted or settled cost report data.
Since section 16002(b) of the 21st Century Cures Act requires that this weighted average PCR be reduced by 1.0 percentage point, the data and the required 1.0 percentage point reduction requires a proposed target PCR of 0.89 be used to determine the CY 2021 cancer hospital payment adjustment to be paid at cost report settlement (i.e., the payment adjustments will be the additional payments needed to result in a PCR equal to 0.89 for each cancer hospital).

Changes to the List of ASC Covered Surgical Procedures

Proposes to add eleven procedures to the ASC covered procedures list (“ASC CPL”), including total hip arthroplasty (CPT 27130).
Proposes two alternatives for changing the way procedures are added to the ASC CPL. The first alternative would establish a nomination process beginning in CY 2021 for procedures that would be added beginning in CY 2022 under which external stakeholders, such as professional specialty societies, would use suggested parameters to nominate procedures that can be safely performed in the ASC setting and meet all other regulatory standards. CMS would review nominated procedures and propose and finalize procedures to be added to the ASC CPL through annual rulemaking.
Under the second alternative proposal, criteria for covered surgical procedures for the ASC payment system under 42 CFR 416.166 would be revised by keeping the general standards and eliminating five of the general exclusions. The revised criteria would result in the addition of approximately 270 surgery or surgery-like codes to the ASC CPL that are not on the CY 2020 IPO list.
Seeks comment on whether the conditions for coverage for ASCs should be revised if the second alternative proposal described above is adopted.

Hospital Outpatient Quality Reporting and ASC Quality Reporting Programs

Proposes to update and refine requirements to further measurement and reporting for quality of care provided in these outpatient settings while limiting compliance burden.
Proposes to revise and codify previously finalized administrative procedures and to propose and codify an expanded review and corrections process to further the programs’ alignment while clarifying program requirements.
CMS is not proposing any measure additions or removals for either program.

Overall Hospital Quality Star Ratings

Proposes to establish and update the methodology that would be used to calculate the Overall Hospital Quality Star Ratings beginning with 2021 and for subsequent years.
Proposes to update and simplify how the ratings are calculated, reduce the total number of measure groups and stratify the readmission measure group based on the proportion of dual-eligible patients.

Addition of New Service Categories for Hospital Outpatient Department Prior Authorization Process

Proposes the addition of the following two categories of services to the prior authorization process beginning for dates of service on or after July 1, 2021: (1) cervical fusion with disc removal and (2) implanted spinal neurostimulators.

Clinical Laboratory Date of Service Policy

Proposes to exclude cancer-related protein-based MAAAs from the OPPS packaging policy and add them to the laboratory DOS provisions at § 414.510(b)(5).

Hall Render attorneys are currently analyzing the Proposed Rule and will issue specific content as it develops.

If you have questions, or if you would like assistance in preparing and submitting comments on the Proposed Rule, please contact:

John Williams III at (202) 370-9585 or jwilliams@wp.hallrender.com;
Abby Kaericher at (202) 780-2989 or akaericher@wp.hallrender.com; or
Regan Tankersley at (317) 977-1445 or rtankersley@wp.hallrender.com;
Lori Wink at (414) 721-0456 or lwink@wp.hallrender.com; or
Your regular Hall Render attorney.

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