Current Report Articles
CMS Issues Hospital Outpatient/ASC Proposed Rule

CMS (Aug. 7, 2020) – On Aug. 4, the Centers for Medicare & Medicaid Services released the calendar year 2021 Outpatient Prospective Payment System/Ambulatory Surgical Center proposed rule. In addition to standard updates, CMS proposes to make other changes, some of which are of concern for the financial viability of hospitals and health systems during this period of the COVID-19 pandemic. Some key proposals include:

  • Update the OPPS payment rates by 2.6 percent in CY 2021
  • Pay for 340B drugs at Average Sales Price minus 28.7 percent (Note: Consistent with the previous OPPS rules, this payment policy would not apply to rural and sole community hospitals, children's hospitals, or PPS-exempt chancer hospitals.)
  • Add two more categories of services requiring prior authorization
  • Eliminate the inpatient-only list over three years
  • Make significant changes to the hospital star ratings methodology
  • Remove certain restrictions on the expansion of physician-owned hospitals that quality as "high-Medicaid facilities"
  • Change the minimum default level of supervision for non-surgical extended duration to general supervision for the entire service

The payment adjustments in addition to other proposed changes in the rule are estimated to result in a net increase in OPPS payments of 2.6 percent compared to CY 2020 payments. For those hospitals that do not publicly report quality measure data, CMS would continue to impose the statutory 2.0 percentage point additional reduction in payment.

CMS will accept comments on the proposed rule through Oct. 5. The policies and payment rates will take effect Jan. 1, 2021. The changes to the services that require prior authorization will take effect July 1, 2021. Watch for a more detailed analysis of the proposed rule in the coming weeks, as well as a hospital-specific impact analysis for the hospitals paid under OPPS.
--Tish Hollingsworth