AHA calls outpatient payment rate in final rule 'insufficient' given cost pressures

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The American Hospital Association is calling the government's increase for outpatient care "insufficient" given extraordinary cost pressures.

The Centers for Medicare and Medicaid Services is updating the 2023 Outpatient Prospective System and Ambulatory Surgical Center payment rates by 3.8% in the final rule released on Tuesday.

"While the AHA is pleased that CMS will provide hospitals and health systems with an improved update to outpatient payments next year compared to the agency's proposal in July, the increase is still insufficient given the extraordinary cost pressures hospitals face from labor, supplies, equipment, drugs and other expenses," the AHA said.

"As we urged, CMS will use more recent data in its calculations on the payment update, resulting in more accurate data that better reflects the historic inflation and tremendous financial pressures hospitals and health systems have confronted recently. However, hospitals are still dealing with a wide range of challenges in providing care, which is why the AHA is urging Congress for additional support by the end of the year."

WHAT THE RULE DOES

Ends 340B cuts

The new rule, effective January 1, 2023, will restore payments for drugs to 340B hospitals to the same amounts all other hospitals receive for those drugs.

From 2018 to 2022, Medicare has paid many 340B hospitals nearly 30% less for drugs administered to Medicare patients under a policy adopted by the Trump administration. On June 15, a unanimous U.S. Supreme Court decided those cuts were unlawful and could not continue. The high court also remanded the case to a lower court to determine a remedy for hospitals that were negatively affected by the cuts since 2018.

Today's rule does not resolve that repayment matter, according to 340B Health.

President and CEO of 340B Health, Maureen Testoni, said, "We are very pleased to see that CMS has restored equity to the Medicare outpatient prospective payment system. For 30 years, 340B has supported hospitals in serving patients living with low incomes, and full Medicare payments for those services are essential for the healthcare safety net. We look forward to working with CMS on compensation for the hospitals that were financially harmed by the unlawful OPPS payment cuts in 2018 to 2022."

The AHA also said it appreciated that CMS was ending its "unlawful cuts," and said it wants to see the government reimburse hospitals for cuts made in previous years. "We do not believe the agency needs more time to put forth a separate rule on a remedy as it has had more than adequate time to correct its mistakes."

Establishes a new Rural Emergency Hospital model

Critical Access Hospitals and small rural hospitals can convert to the new Rural Emergency Hospital designation, which is aimed at keeping their doors open. Numerous rural hospitals have closed due to financial pressures.

The REH is a new Medicare provider type that furnishes outpatient services, emergency services and observation care. In this rule, Medicare will also pay hospital outpatient departments to provide remote behavioral health services to people at home, which will improve access to care in rural communities and promote health equity.

Improves access to behavioral health services in rural areas

CMS is establishing a policy that permits clinical staff of hospital outpatient departments to provide behavioral health services remotely to patients in their homes.

CMS first implemented this policy through emergency rulemaking in response to the COVID-19 public health emergency. By making this policy permanent, CMS will ensure access to behavioral health services particularly for rural and other underserved communities, furthering health equity goals. 

Enhances payment for non-opioid pain management drugs and biologicals

CMS is finalizing to separately pay for five qualifying non-opioid pain management drugs when administered in ambulatory surgical centers in 2023. This ensures that Medicare beneficiaries have access to non-opioid pain management drugs and encourages providers to use non-opioids rather than opioids for pain management.

Gives payment adjustments for additional costs of domestic NIOSH-approved N95 surgical respirators

In a future pandemic or increase in community spread of COVID-19, hospitals need to be able to access a reliable supply of NIOSH-approved surgical N95 respirators to protect healthcare workers and their patients. Sustaining domestic production of these products is important for helping to maintain that reliability. CMS recognizes that hospitals may incur additional costs when purchasing domestically made NIOSH-approved surgical N95 respirators, so this final rule establishes additional hospital payments that would account for these costs.

ON THE RECORD

"CMS is committed to expanding access to care in rural communities and ensuring people with Medicare get the high-quality care they need," said CMS Administrator Chiquita Brooks-LaSure. "Through the establishment of Rural Emergency Hospitals, supporting clinic visits at rural sole community hospitals and enabling people with Medicare to remotely access behavioral health services in their homes, today's actions promote patient safety, equity, and quality for these underserved communities. We received broad support for the role Rural Emergency Hospitals can play in advancing health equity and thank stakeholders for their thoughtful input during the public comment period."

Twitter: @SusanJMorse
Email the writer: SMorse@himss.org