The Centers for Medicare & Medicaid Services (CMS) has issued its calendar year (CY) 2020 outpatient prospective payment system (OPPS) proposed rule, including significant proposals related to price transparency and changes to the hospital area wage index (AWI). Specifically, CMS would carry over hospital AWI policies proposed under the federal fiscal year 2020 inpatient PPS (IPPS) proposed rule, applying the finalized inpatient policies to outpatient payments.
This proposal would significantly harm California hospitals by inappropriately and unnecessarily punishing states with a high cost of living. If CMS finalizes its inpatient policies as proposed — which represents a $100 million cut in inpatient services to California hospitals — CHA estimates outpatient payments would be cut by an additional $47 million. CHA continues to oppose such egregious policies and will continue to communicate with members about next steps if the policies are finalized in the IPPS final rule, which is due to be issued this week or early next.
The OPPS proposed rule would also require hospitals to publish an annual list of their standard charges for items and services, as well as payer-specific negotiated charges for a set of 300 “shoppable” services, 70 of which would be selected by CMS. The proposal would implement provisions of President Trump’s recent executive order. Standard charges would be required to be posted in a machine-readable format, including common billing or accounting codes, and payer-specific charges would be required to be posted in a “consumer-friendly” manner.
CMS proposes monitoring, auditing, and issuing corrective action plans to ensure compliance with the price transparency proposals, with a penalty of $300 per day for failure to comply. Notably, CMS is expanding this requirement to all organizations licensed as hospitals by the state licensing authority. Previous postings were required of only IPPS hospitals; this proposal would expand the requirements to critical access hospitals, inpatient psychiatric facilities, long-term care hospitals, and inpatient rehabilitation facilities, regardless of their Medicare certification.
Additionally, the proposed rule includes a number of additional payment, policy, and quality updates, including:
- Annual payment update: CMS proposes to increase OPPS rates by 2.7% compared to CY 2019, estimating overall payments to outpatient providers will increase by approximately $6.2 billion.
- Site-neutral payment: CMS proposes to continue implementing site-neutral payment rates for clinic visits in hospital outpatient departments. These services would be paid at 40% of OPPS rates beginning in CY 2020.
- 340B Drug Pricing Program: For CY 2020, CMS proposes to continue its current 340B drug payment adjustment of average sales price minus 22.5%. CMS also acknowledges the ongoing litigation pertaining to the 340B payment adjustment and seeks comment on alternative payment options for CY 2020, and potential remedies for CY 2018 and 2019 payments in the event of an adverse ruling on the 340B payment policy by the U.S. Court of Appeals.
- Prior authorization: CMS proposes to establish prior authorization requirements for a number of outpatient services that it believes are overutilized and often medically unnecessary.
- Site of service: CMS proposes to remove procedures from the inpatient-only list and add procedures allowable in the ambulatory surgical center setting.
- Quality reporting programs: CMS proposes to remove one measure from the Hospital Outpatient Quality Reporting Program, and seeks comment on including in future rulemaking four measures previously adopted for the Ambulatory Surgical Center Quality Reporting Program.
Comments on the proposed rule are due Sept. 27. CHA is currently reviewing the proposed rule and will provide members with a more detailed summary in the coming weeks. Additional information is available in a CMS fact sheet.