CMS Releases Proposed Hospital Outpatient and Ambulatory Surgical Center Update for CY 2023, Increasing Payment, with Changes to Quality Reporting (CMS-1772-P)

On July 15, the Centers for Medicare & Medicaid Services (CMS) issued the proposed Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems rule, which proposes updates to the outpatient prospective payment system (OPPS) and the Medicare ambulatory surgical center (ASC) payment system for calendar year (CY) 2023. See the press release here. CMS has provided a rule overview fact sheet and a Rural Emergency Hospital fact sheet relating to Medicare policies for the recently established Rural Emergency Hospital type. This rule proposes to:

Apply a payment update of 2.7 percent for CY 2023,
Eliminate 10 services from the inpatient only (IPO) list,
Continue 340B drug payment policy with changes in the final rule,
Update the Hospital and ASC Quality Reporting Programs,
Make organ acquisition payment policy changes,
Make several nonrecurring policy changes,
Consider eight applications for device pass-through payment,
Continue non-opioid pain management drug and biological policy with modifications,
Continue existing pass-through policy for certain drugs, biologicals, and radiopharmaceuticals, and
Implement rural emergency hospital (REH) payment policies.

This proposed rule is scheduled to be published in the Federal Register on July 26, 2022, and comments are due by September 13, 2022.

Outpatient and ASC rates to Increase by 2.7 Percent

CMS proposes an increase of 2.7 percent for OPPS payment rates in CY 2023, which is based on a market basket update of 3.1 percent reduced by a productivity adjustment of 0.4 percentage points.[1] The agency estimates this will result in a total of approximately $86.2 billion in payments to OPPS providers ($1.79 billion more than CY 2022).

CMS proposes an increase of 2.7 percent for ASC payment rates in CY 2023, which is consistent with CMS’ policy for CYs 2019 through 2023 to update the ASC payment system using the hospital market basket update.[2] CMS estimates this will result in a total of approximately $5.4 billion in payments to ASC providers ($130 million more than CY 2022).

Due to impacts of the COVID-19 pandemic, CMS proposes to use CY 2021 claims data and cost report data prior to the pandemic to set OPPS and ASC CY 2023 payment rates. Ordinarily, CMS would use the most recently available claims and cost report data for OPPS and ASC rate setting, which includes cost report data during the pandemic.

After for accounting for outlier payment changes, pass-through payments, frontier state wage index adjustment, rural sole community hospital clinic visit policy changes, along with a proposed payment adjustment for National Institute of Occupational Safety and Health (NIOSH) approved surgical N95 respirators, CMS estimates that OPPS payments will increase by 2.9 percent overall, as compared to CY 2022.

In addition, CMS proposes to:

Continue the cancer hospital payment adjustment for CY 2023,
Keep outlier estimated payments at 1.0 percent of total OPPS payments for CY 2023,[3] and
Continue the OPPS labor-related share as 60 percent of the national OPPS payment.

CMS Proposes to Eliminate Ten Services from the Inpatient Only List

CMS established the IPO list in 2000 to designate procedures that, because of their invasive nature, expected recovery time, and/or underlying patient condition, would not be paid if performed in an outpatient facility. The Agency believed that performing certain procedures on an outpatient basis would not be safe or appropriate, and therefore not reasonable and necessary under Medicare rules.[4]

For CY 2021, CMS reversed this longstanding policy and decided to eliminate the IPO list over three years.[5]However, in the CY 2022 OPPS/ASC final rule, based on a clinical review by its internal physicians, CMS reversed its decision to eliminate the IPO list.

Additionally, in the CY 2022 OPPS/ASC final rule CMS finalized a proposal to codify five longstanding criteria for determining whether a service or procedure should be removed from the IPO list.

For CY 2023, CMS proposes to remove ten services from the IPO list. CMS also proposes to add eight services to the IPO list that were recently created by the American Medical Association (AMA) CPT^®[6] Editorial Panel for CY 2023. If finalized, these services would be effective January 1, 2023.

Recent 340B Litigation Impacts Proposed 340B Payment, Changes Expected in Final Rule

The 340B Drug Pricing Program[7] was established to help vulnerable patients access medicine at safety net providers.[8] Under the program, certain eligible hospitals, called covered entities, can purchase certain covered outpatient drugs at a significant discount.

In the CYs 2018 and 2019 OPPS/ASC Final Rules, CMS finalized a policy that Medicare would reimburse hospital outpatient drugs purchased with a 340B discount at average sales price (ASP) minus 22.5 percent for physician-administered drugs, a departure from previous payment policy of ASP plus 6 percent. That policy prompted litigation, which was the subject of a recent Supreme Court decision in American Hospital Association v. Becerra.[9]

On June 15, 2022, the Supreme Court held, among other things, that absent a survey of hospitals’ drug acquisition costs, the U.S. Department of Health and Human Services (HHS) may not vary the reimbursement rates only for 340B hospitals. Therefore, the Court determined that CMS’s 2018 and 2019 reimbursement rates for 340B hospitals were unlawful because CMS did not conduct a survey for more than a decade after statutory provisions went into effect in 2006.

While the focus of this decision was on CYs 2018 and 2019 payment rates, the decision impacts CY 2023 rates. CMS was unable to adjust the proposed payment rates in response to the Court’s decision prior to issuing the proposed rule. Therefore, while CMS formally proposes a payment rate of ASP minus 22.5% for drugs and biologics acquired through the 340B program for CY 2023, as in CYs 2019-2022, the agency intends to apply a rate of ASP plus 6% to 340B drugs and biologics in the CY 2023 Final OPPS rule in consideration of the Supreme Court’s ruling. CMS notes however that the OPPS conversion factor would need to be decreased to account for any 340B drug payment increases to maintain budget neutrality.

The agency continues to evaluate how to apply the Supreme Court’s ruling to address remedies for calendar years 2018 – 2022, and seeks public input on how to do so.

CMS Requests Feedback on Enhancing Transparency and Competition

In line with the Biden-Harris Administration’s goal of promoting competition in America and improving transparency in the health care system, CMS includes a Request for Information (RFI) in this proposed rule as to whether there is additional data that should be released to further promote transparency and competition. President Biden’s Executive Order on Promoting Competition in the American economy[10] identified that hospital consolidation has left many areas, particularly rural communities, without suitable options for affordable and convenient health care services.

In April 2022, CMS first released data on hospital and skilled nursing facility mergers, acquisitions, consolidations, and changes in ownership dating back to 2016. CMS will update this data quarterly moving forward. This RFI seeks to identify what, if any, additional data should be released to the public and whether there are additional provider types for which this data should be made public.

CMS Proposes quality Reporting Program Changes

CMS proposes changes, and requests comment for the Hospital Outpatient Quality Reporting Program (OQR), Ambulatory Surgical Center Quality Reporting (ASCQR), and Rural Emergency Hospital Quality Reporting (REHQR) Programs.

Hospital OQR and ASCQR Programs

The Hospital OQR and the ASCQR Programs are pay-for-reporting quality programs for the hospital outpatient department and Ambulatory Surgical Center (ASC) settings respectively that require hospitals and ASCs to meet program requirements or receive a reduction of 2.0 percentage points in their annual payment update.

For the Hospital OQR Program for CY 2023, CMS proposes to update the Cataracts: Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery (OP-31) measure to be voluntary due to ongoing COVID-19 public health emergency (PHE). CMS proposes the same for the related ASCQR measure, the Cataracts: Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery (ASC-11).

In addition, CMS proposes to:

Align Hospital OQR Program patient encounter quarters for chart-abstracted measures to the calendar year for annual payment update (APU) determinations; and
Add a targeting criterion for the Hospital OQR Program in the selection of hospitals for data validation, for hospitals with fewer than four quarters of data subject to validation, due to receiving an extraordinary circumstance exception for one or more quarters.

CMS seeks feedback on future reimplementation of the Hospital Outpatient Volume on Selected Outpatient Surgical Procedures (OP–26) measure or the future adoption of another volume indicator as a quality measure under the Hospital OQR Program. Similarly, CMS seeks comment on reimplementation of the ASC Volume on Selected ASC Surgical Procedures (ASC–7) measure or adoption of another volume indicator as a quality measure in the ASCQR Program.

Rural Emergency Hospital Quality Reporting (REHQR) Programs

The REHQR establishes quality measurement reporting requirements for Rural Emergency Hospitals (REHs). CMS proposes that in order for REHs to participate in the REHQR Program, they must have an account with the Hospital Quality Reporting (HQR) secure portal and a designated Security Official. CMS seeks comment on several measures under consideration for the REHQR. In addition, CMS seeks comments on rural behavioral/mental health, rural maternal health, and rural telehealth services that may be addressed by the REHQR in future rulemaking.

Hospital Quality Star Ratings and RFI to Reduce Inequities Across Quality Programs

CMS notes that the RFI included in the FY 2023 Inpatient Prospective Payment System proposed rule[11] titled “Overarching Principles for Measuring Healthcare Quality Disparities Across CMS Quality Programs” seeks feedback on reducing inequities across quality programs including the Hospital OQR, ASCQR, and REHQR Programs. One consideration is to expand efforts to report quality measure results stratified by patient social risk factors and demographic variables.

Lastly, CMS proposes minor changes to the Hospital Quality Star Ratings posted on the CMS Care Compare website. CMS intends to publish Overall Hospital Quality Star Ratings in 2023, but notes that they may apply suppression policies previously used[12] if data analysis demonstrates that the COVID-19 PHE had a significant effect on underlying measure data.

CMS Proposes Organ Acquisition Payment Policy Changes

CMS proposes changes for organ acquisition payment, with the goal of lowering costs and improving the accuracy of organ procurement programs.

CMS proposes to alter the way that organ acquisition costs are calculated in the Medicare cost report. Specifically, the new calculation would apply to research organ procurement, would not require a full standard acquisition charge (SAC), and would be intended to prevent increased costs of organ procurement for Medicare. It is also intended to ensure that Medicare would not pay for non-allowable research activities.

In addition, CMS proposes to allow donor community hospitals and transplant hospitals (THs) to incur the costs related to a deceased, or dying, donor and bill their organ procurement organization (OPO) for those services. The OPO would bill those costs to their Medicare cost report. CMS believes this change will increase equity in the donation and transplant community, and help to increase donation rates.

CMS is also considering an alternative methodology for counting organs that would require TH/HOPOs and OPOs to only report organs transplanted into Medicare beneficiaries, which would be used to calculate Medicare’s share of organ acquisition costs. CMS is interested in the impact on THs, OPOs, and other interested parties and intends to use this information to inform future policy development.

CMS requests information on potential alternative methodologies for counting organs to calculate Medicare’s share of organ acquisition costs for transplant hospitals and organ procurement organizations. Specifically, CMS is interested in how THs and OPOs support organ acquisition costs, revenue reduction impacts, organ allocation, and more.[13]

CMS Proposes Several Nonrecurring Policy Changes

CMS MAKES PROPOSALS FOR PROVISIONS AT HOME, TELEHEALTH ADMINISTRATION OF MENTAL HEALTH SERVICES

CMS proposes to designate certain diagnostic, evaluation, and treatment services for mental health disorders as covered outpatient services for CY 2023. These services would be performed by the clinical staff of a hospital using telecommunication technology originating from the hospital location to beneficiaries in their homes. To accommodate this, CMS proposes OPPS-specific coding to describe these services.

The proposed code descriptors specify that a beneficiary must be in their residence, and that no associated professional service billed under the Medicare Physician Fee Schedule exists.

Proposed codes and their descriptors:[14]

HCPCS Code	Proposed Long Descriptor
CXX78	Service for diagnosis, evaluation, or treatment of a mental health or substance use disorder, initial 15-29 minutes, provided remotely by hospital staff who are licensed to provide mental health services under applicable State law(s), when the patient is in their home, and there is no associated professional service
CXX79	Service for diagnosis, evaluation, or treatment of a mental health or substance use disorder, initial 30-60 minutes, provided remotely by hospital staff who are licensed to provide mental health services under applicable State law(s), when the patient is in their home, and there is no associated professional service
CXX80	Service for diagnosis, evaluation, or treatment of a mental health or substance use disorder, each additional 15 minutes, provided remotely by hospital staff who are licensed to provide mental health services under applicable State law(s), when the patient is in their home, and there is no associated professional service (List separately in addition to code for primary service)

CMS also proposes a provision that payment for mental health services furnished to beneficiaries in their homes will only be made if the beneficiary receives an in-person service within a 6-month period prior to remote services being provided. Other in person visit requirements will not apply until 152 days after the PHE for COVID-19 ends. Finally, CMS proposes that while hospital staff must have the capability of providing two-way audio and video services to patients, audio-only communications may be utilized to support an individual patient’s access or preference.

CMS SEEKS COMMENT ON INTENSIVE OUTPATIENT MENTAL HEALTH TREATMENT

CMS seeks comment on whether paid Medicare services described by existing CPT codes provide sufficient access to beneficiaries requiring care for treatment of mental health disorders or substance abuse disorders (SUDs). The agency is also interested in comments regarding Intensive Outpatient Program (IOP) construction (range of services, practitioner types etc.), to inform its understanding on the current level of beneficiary access.

CMS SEEKS COMMENT ON CONTINUATION OF CARDIAC AND PULMONARY REHABILITATION SERVICES VIA INTERACTIVE COMMUNICATIONS TECHNOLOGY POST-PHE

In the CY 2022 PFS Rule, codes for cardiac rehabilitation (CR) and pulmonary rehabilitation (PR) via interactive communications technology (ICT) were added to the Medicare Telehealth Services List on a Category 3 basis, meaning that these services will not be furnished to beneficiaries in their homes post PHE. CMS seeks comment on whether the agency should continue to allow direct physician supervision for cardiac and pulmonary rehabilitation services to encompass two-way audio/video communication technology through the end of CY 2023. Specifically, CMS requests comments on potential safety and quality of care concerns that this policy adoption could incur post-PHE.

CMS CLARIFIES SUPERVISION REQUIREMENTS FOR OUTPATIENT DIAGNOSTIC SERVICES AT HOSPITALS AND CRITICAL ACCESS HOSPITALS (CAHS)

CMS proposes to clarify that nonphysician practitioners (NPPs) can provide supervision of diagnostic testing services paid under the Medicare Physician Fee Schedule, as well as supervise diagnostic testing services furnished to outpatients by hospitals or CAHs

CMS PROPOSES PAYMENT UPDATE FOR INVESTIGATIONAL DEVICE EXEMPTION CLINICAL STUDIES

Medicare can pay for routine items and services provided in an U.S. Food and Drug Administration (FDA) approved Category A (Experimental) study if CMS determines that the Medicare coverage investigational device exemption (IDE) study criteria are fulfilled. A Category A (Experimental) device is one for which the ‘absolute risk’ of the device type has not been definitively established. This means that initial questions surrounding safety and effectiveness have not been resolved and the FDA is not entirely sure the device is safe and effective.

Medicare can pay for a Category B (Nonexperimental/investigational) IDE study, if CMS determines that the Medicare coverage IDE study criteria are fulfilled. A Category B device is one in which the incremental risk is the primary risk under question (this means that initial questions surrounding safety and effectiveness have been resolved), or it is known that the device can be safe because other manufacturers have received FDA premarket approval or clearance for that particular device type.

For CY 2023, CMS proposes to create a single blended payment and establish a new HCPCS code or update an existing HCPCS code for devices and services in Category B IDE studies when Medicare coverage IDE study criteria are met, and where CMS establishes that a new or revised payment rate is needed to preserve scientific validity of the study.

PROPOSED PAYMENT CHANGES TO SOFTWARE AS A SERVICE

CMS proposes changes to the OPPS payment for software as a service. Those proposals include:

Relocating certain technology from the New Technology APC to appropriate APC designations.
Changing package payment for specific add-on codes according to existing packaging policies.
Revising CPT add-on codes to HCPCS C-codes to describe add-ons that are standalone services.

CMS is soliciting comment on new payment approaches for specific technologies as well as how to identify services that should be analyzed as distinct, identify the costs related to them, and how the services might be paid for in other settings. CMS also seeks comment on what payment approach is best as these technologies become more common outside of imaging services.

CMS PROPOSES PAYMENT ADJUSTMENTS TO INCREASE SURGICAL N95 RESPIRATOR ACCESS

CMS proposes to make payment adjustments, beginning January 1, 2023, for domestic National Institute for Occupational Safety & Health (NIOSH)-approved surgical N95 respirators. The agency intends to ensure all healthcare personnel have access to personal protection equipment (PPE) and maintain substantial wholly-domestic production of said PPE. Proposals include:

Separating NIOSH-approved surgical respirators into domestic and non-domestic categories when being purchased by hospitals. This is to ensure that a sufficient percentage of respirators in hospitals are domestically produced.
Basing the payment adjustment for the purchase of domestic NIOSH-approved surgical N95 respirators on the difference in cost between the domestic and non-domestic products. This calculation is intended to prevent unintended financial burdens on hospitals purchasing domestic products.
Making the payment adjustment for the domestic NIOSH-approved surgical N95 respirators budget neutral through a new spending estimate.

CMS PROPOSES TO EXEMPT RURAL SOLE COMMUNITY HOSPITALS FROM THE VOLUME CONTROL METHOD FOR CLINIC VISIT SERVICES FURNISHED IN EXCEPTED OFF CAMPUS PROVIDER-BASED DEPARTMENTS (PBDS)

CMS proposes to exempt excepted off-campus provider-based departments (PBDs) of rural sole community hospitals (SCHs) from its volume control method policy. CMS proposes to pay the full OPPS payment rate, rather than the PFS-equivalent (currently reflected under the volume control method) when a clinic visit is provided in such departments.

CMS Seeks Feedback on Eight Applications for Device Pass-Through Payments

Transitional device pass-through payment allows beneficiaries to access innovative devices by allowing payment for these devices while necessary cost data is being collected to incorporate the devices into a procedure rate. A device is eligible for transitional for pass-through payments for at least two years but no more than three years. For CY 2023, eight applications for device pass-through payments were submitted. One of these applications, the aprevo™ Intervertebral Fusion Device, received preliminary approval in CMS’ quarterly review process.

Final determinations for pass-through status will be published in the final CY 2023 OPPS rule.

Devices with Breakthrough Device designation and FDA marketing authorization may use an alternative pathway for pass-through status, which was finalized in CY 2020 rulemaking. These products are not evaluated for substantial clinical improvement but must meet all other pass-through requirements.

CMS is proposing to publicly post all completed pass-through applications and related materials online, excluding some proprietary information, beginning for applications received on and after January 1, 2023. CMS believes that the ability to review the original source information from the applications would foster greater public input and reduce the risk that CMS misrepresents information submitted by the applicants. All applications and related materials would be publicly posted at the same time that the OPPS proposed rule is published.

Consistent with prior years, CMS will set the pass-through payment percentage limit to 2.0 percent of the total projected OPPS payment for 2023. CMS estimates payment of $48 million for the first group of devices and $101.4 million for the second group of devices eligible for pass-through payment in CY 2023.

CMS Highlights Proposed Discharged Drug Billing Requirements

Section 90004 of the Infrastructure Investment and Jobs Act[15] requires, beginning January 1, 2023, that drug manufacturers provide a refund to CMS for certain discarded amounts from a refundable single-dose container or single-use package drug. The refund amount is equal to the amount of discarded drug that exceeds an applicable percentage, which is required to be at least 10 percent, of total charges for the drug in a given calendar quarter.

The recently released CY 2023 Physician Fee Schedule (PFS) proposed rule includes proposals to implement this Discarded Drug Refund policy including new billing requirements for hospital outpatient departments (HOPDs) and ambulatory surgical centers (ASCs) to report the JW modifier for discarded amounts of single discarded amounts of refundable single-dose container or single-use package drugs that are separately payable under the OPPS or ASC payment system and a new JZ modifier in cases where no billing units of such drugs were discarded.

CMS advises that the complete proposals for implementation of this policy are in the PFS and that comments should be submitted to the CY 2023 PFS proposed rule and will be addressed in the final CY 2023 PFS rule.

CMS to Continue Non-Opioid Pain Management Drug and Biological Policy With Changes

Under current law,[16] the Secretary must review payments for opioids and evidence-based non-opioid alternatives for pain management (including drugs and devices, nerve blocks, surgical injections, and neuromodulation) with a goal of ensuring that there are not financial incentives to use opioids instead of non-opioid alternatives. In the CY 2022 OPPS and ASC final rule, CMS had finalized its proposal that, beginning January 1, 2022, CMS would provide for separate payment for non-opioid pain management drugs and biologicals that function as supplies in the ASC setting when those products are FDA approved, have an FDA-approved indication for pain management or as an analgesic, and have a per-day cost above the OPPS drug packaging threshold, as determined by CMS.

For CY 2023, CMS is proposing to maintain the current policy of separate payment in the ASC for these products meeting the criteria. However, the agency also proposes clarifying to add two additional criteria for separate payment:

The drug or biological does not have transitional pass-through payment status. In the case where a drug or biological otherwise meets this non-opioid pain management drug policy requirements and has transitional pass-through payment status that will expire during the calendar year, the drug or biological would qualify for separate payment during such calendar year on the first day of the next calendar year quarter after its pass-through status expires.
The drug or biological must not already be separately payable in the OPPS or ASC payment system under a policy other than the one specified in this non-opioid pain management drug policy.

Using these criteria, CMS reevaluated the products that receive separate payment under the policy for CY 2022 and proposed that three would continue to receive separate payment under this policy for CY 2023 while proposing an additional new product:

Exparel (HCPCS C9290, Injection, bupivacaine liposome, 1 mg),
Omidria (HCPCS code J1097, Phenylephrine 10.16 mg/ml and ketorolac 2.88 mg/ml ophthalmic irrigation solution, 1 ml),
Xaracoll (HCPCS code C9089, Bupivacaine, collagen-matrix implant, 1 mg), and
Dextenza (HCPCS code J1096 Dexamethasone, lacrimal ophthalmic insert, 0.1 mg).

CMS is soliciting comments on additional drugs and biologicals that may meet criteria in addition to the following:

Potential policy modifications and additional criteria that may help further align the ASC payment system policy for non-opioid pain management drugs and biologicals that function as surgical supplies with the intent of sections 1833(t)(22) and 1833(i)(8) of the Act,
Non-drug or non-biological products that should qualify for separate, or modified, payment under this authority and any data regarding any such products,
Barriers to access to non-opioid pain management products that may exist, and how our payment policies could be modified to address these barriers, and
Comments and data regarding the need to expand the current ASC payment system policy for non-opioid pain management drugs and biologicals that function as surgical supplies to the OPPS.

CMS to Continue Existing Pass-Through Policies for Certain Drugs, Biologicals, and Radiopharmaceuticals

Under current law,[17] CMS provides temporary additional payments or “transitional pass-through payments” for certain drugs and biological agents for “new” drugs, devices and biological agents that were not paid for as a hospital outpatient department service as of December 31, 1996, and whose cost is “not insignificant” in relation to the OPPS payment for the procedures or services associated with the new drug, device, or biological. Under the statute, transitional pass-through payments can be made for at least 2 years but not more than 3 years.

CMS proposes to continue existing pass-through payment policies for drugs, biologicals, and radiopharmaceuticals in CY 2023 for 32 drugs and biologicals which were approved for pass-through payment status with effective dates beginning between April 1, 2021, and April 1, 2022. These are listed in Table 41 in the rule.

CMS also proposes to end pass-through payment status in CY 2023 for 43 drugs and biologicals which were initially approved for pass-through payment status between April 1, 2020 and January 1, 2021. These are listed in Table 40 in the rule.

CMS Proposes Rural Emergency Hospital Policies

Rural emergency hospitals (REHs) are facilities converted from either a critical access hospital (CAH) or a rural hospital with less than 50 beds, that do not provide acute care inpatient services except for skilled nursing facility services in a distinct unit. REHs were established as a new provider type under the Consolidated Appropriations Act (CAA), 2021, which becomes effective January 1, 2023. CMS proposes several payment policies and updates to the provider enrollment regulations and physician self-referral law.

Proposed Payment Policies for REHs

CMS proposes several payment policies for REHs:

All covered outpatient department services that would otherwise be paid under the OPPS (outside of inpatient hospital services) would be covered as REH services;
Covered outpatient department services provided by REHs would be paid at a rate equal to the OPPS payment rate for the equivalent service, with an additional 5% payment for each service;
Beneficiaries will not be charged coinsurance on the additional 5% payment;
REHs will receive a monthly facility payment, which will be initially established in CY 2023 and increased in future years by the hospital market basket percentage increase; and
REHs may provide outpatient services that are not otherwise paid under the OPPS and post-hospital extended care services as part of a SNF, but these services will not receive the additional proposed 5% payment increase for REH services.

CMS Seeks Input on Conditions of Participation for REHs

CMS proposed Conditions of Participation (CoPs) for REHs on June 30, 2022.[18] CMS is seeking input on these standards from the rural community with a focus on the ability of an REH to provide labor and delivery services and the appropriateness of allowing an on-call health care provider to be available within specified timeframes.

Proposed Updates to REH Provider Enrollment Regulations

CMS proposes to update existing Medicare provider enrollment regulations to address enrollment requirements for REHs. A key proposal is to allow facilities to submit a Form CMS-855A change of enrollment application, rather than an initial application, to accelerate the process of switching from a CAH to a REH.

Proposed Updates to REH Physician Self-Referral Law

CMS proposes two updates to the “Stark Law,” which prohibits physician self-referral, for the REH provider type. These proposals are 1) a new exception for ownership or investment interests in an REH, and 2) revisions to certain existing exceptions to make them applicable to compensation arrangements for REH providers.

[1] Hospitals that fail to meet hospital outpatient quality reporting requirements will have a 2.0 percentage point reduction to their update factor.

[2] ASCs that fail to meet ASC quality reporting requirements will have a 2.0 percentage point reduction to their update factor.

[3] CMS proposes an outlier fixed-dollar threshold of $8,350.

[4] 63 FR 47571

[5] 85 FR 86084 through 86088

[6] CPT is a registered trademark of the American Medical Association.

[7] https://www.hrsa.gov/opa/index.html.

[8] Safety net providers generally provide Medicare and Medicaid services to low-income and vulnerable populations regardless of their ability to pay.

[9] Am. Hosp. Ass’n et al. v. Becerra, No. 20–1114 (June 15, 2022).

[10] https://www.whitehouse.gov/briefing-room/presidential-actions/2021/07/09/executive-order-on-promoting-competition-in-the-american-economy/

[11] 87 FR 28479

[12] Suppression policy is discussed in the CY 2021 OPPS/ASC proposed rule.

[13] See pages 670 – 672 of the unpublished rule for a detailed list of questions CMS is soliciting feedback on.

[14] See Table 48 on pages 425 – 426 of the unpublished rule.

[15] Pub. L. 117-9.

[16] Section 1833(t)(22)(A) of the Act.

[17] Section 1833(t)(6) of the Social Security Act.

[18] 87 FR 40350.

Applied Policy ®