2020 OPPS final rule: Site neutral and 340B drug discount cuts to continue, price transparency policy remains opaque

CMS is moving forward with multiple policies—effectively based on reducing reimbursement to hospitals—that have been deemed unlawful in court, according to the 2020 OPPS final rule, released Friday, November 1.

“I’ve never seen anything like what we are seeing now from CMS with OPPS payment policy, where the agency continues to double and triple down on cutting reimbursement to hospitals even when the legal system has spoken in favor of what providers have been saying for years,” says Jugna Shah, MPH, CHRI, president of Nimitt Consulting Inc. “Given this, it is quite remarkable that the agency pushed its controversial price transparency proposals to a separate, yet-to-be released final rule.”

The complicated price transparency proposal—which faces great opposition from many hospital groups—was sent to the Office of Management and Budget in late October and its release, and eventual implementation date, remain unknown.

“Are we to take this as a sign that CMS will indeed back down from some of its most controversial proposals, such as effectively requiring hospitals to publish their payer-negotiated rates, among other onerous requirements?” asks Shah. "Or is this being far too optimistic, and we will indeed see CMS move forward sometime next year? Perhaps the only respite providers have right now is that they will not have to run around in circles to be ready for January 1.”

Payments for clinic visits described by HCPCS code G0463 (hospital outpatient clinic visit for assessment and management of a patient) will be further reduced from 2019 rates as CMS completes phase two of its two-year reimbursement reduction for what it calls “unnecessary increases in utilization.” This comes despite the U.S. District Court strongly rejecting CMS’ authority to make these cuts.

“We do not believe it is appropriate at this time to make a change to the second year of the two-year phase-in of the clinic visit policy,” CMS writes in the final rule, noting that it is currently evaluating its appeal rights.

This second phase of the policy will reduce reimbursement for claims for G0463 with modifier -PO (services, procedures, and/or surgeries furnished at off-campus provider-based outpatient departments) to approximately 40% of the OPPS rate in 2020. CMS finalized this two-year approach that first reduced rates for these services to approximately 70% of the OPPS rate in 2019. The agency says beneficiaries will save an average of $14 per visit to off-campus clinics in 2020 as a result of the policy.

CMS notes that commenters, including those representing payers, physician associations, and individual Medicare beneficiaries supported the proposal. However, many stakeholders, including the American Hospital Association and other hospital groups, opposed the policy, leading to the lawsuit decided against CMS.

Even CMS’ own advisory panel, the Hospital Outpatient Payment (HOP) panel, has opposed the policy for two years and urged the agency to further study the issue before issuing cuts. At its most recent meeting in August, the HOP panel unanimously voted to recommend CMS freeze the reduction, but CMS says it will only “continue to monitor and study the utilization of outpatient services as recommended by the panel.”

In addition to the courts ruling CMS exceeded its authority, the cuts controversially affect hospitals previously grandfathered under Section 603 of the Bipartisan Budget Act of 2015 and do not redistribute funds throughout the OPPS in a budget-neutral manner.

CMS opens survey, continues to weigh 340B drug discount reimbursement

CMS will continue to pay providers acquiring drugs through the 340B drug discount program at the average sales price (ASP) minus 22.5%, despite the U.S. District Court declaring the policy originally finalized for 2018 unlawful.

After finalizing the policy without precise data regarding hospital acquisition costs for 340B drugs in this program, the agency is crowdsourcing ideas for how to reimburse hospitals as ordered by the court, though an appeal is currently pending.

CMS recently released a proposal regarding a data collection survey for hospitals enrolled in the 340B program from the last quarter of 2018 or the first quarter of 2019. The hospitals would be required to report acquisition costs for 340B drugs in early 2020 to aid CMS in its policy development for the 2021 OPPS proposed rule. This is intriguing and something that CMS had not included in the proposed rule, says Shah.

In the 2020 OPPS proposed rule, CMS solicited comment from stakeholders on methods to devise a remedy for hospitals if its appeal is denied. With CMS redistributing money saved from the reimbursement cut throughout the OPPS since 2018, the agency does not want to simply reimburse hospitals at the more traditional ASP plus 6%. CMS says it will consider stakeholder comments and the survey data as it weighs possible new policies and remedies. 

Prior authorization for certain services

Once again citing “unnecessary increases” in the volume of services, CMS is finalizing a proposal to require prior authorization for five categories of services in hospital outpatient departments:

• Blepharoplasty
• Botulinum toxin injections
• Panniculectomy
• Rhinoplasty
• Vein ablation

The policy will be implemented July 1, 2020, and CMS will grant exemptions for providers who achieve a “prior authorization affirmation threshold” of at least 90% during a semiannual assessment. The agency anticipates it will take approximately 60 calendar days for the exemption to take effect.

CMS says that providers will receive a response within 10 business days of submitting documentation, though expedited requests will be allowed in “urgent” circumstances and responses will be issued within two days. No additional documentation will be required to apply for prior authorization, CMS says, it will only be required to submit earlier than usual.

“I had hoped that CMS would be moved by the many comments that asked it to back away in favor of other things the agency could do that would be far less burdensome and costly for both providers and the agency that would still enable CMS to get at whether unnecessary care is being provided,” says Shah. “What is really scary is if this is simply a precursor for more prior authorization initiatives from CMS.”

CMS includes a full list of codes that would apply in Table 64 of the final rule.

Changes in therapy supervision requirements

CMS is finalizing its proposal to change the required level of supervision for all outpatient therapeutic services provided in outpatient and critical access hospitals from direct to general. General supervision means that the procedure is furnished under the physician's overall direction and control, but that the physician's presence is not required during the performance of the procedure.

“This is one of the few things that CMS proposed and finalized that should receive three cheers from the hospital community,” says Shah.

Hospitals may choose to require higher levels of supervision for certain services as it deems appropriate.

For more information on the 2020 OPPS final rule, see CMS’ fact sheet.

To learn more about the final rule’s policies and how to implement them at your facility, attend HCPro’s annual OPPS final rule webinar on Wednesday, December 4, with Shah and Valerie A. Rinkle, CHRI, MPA, lead regulatory specialist and an instructor for HCPro Medicare boot camps.