CMS finalizes payment for more outpatient procedures and 340B cuts

The Centers for Medicare and Medicaid Services has finalized policy and payment changes around site neutrality and 340B drugs.

The Outpatient Prospective Payment System and Ambulatory Surgical Center final rule begins to eliminate procedures that can only be done through inpatient care. Over three years, it will end 1,700 procedures on the inpatient-only list of procedures for which Medicare will only pay when performed in the hospital inpatient setting.

It will start with some 300 primarily musculoskeletal-related services. The inpatient-only list will be completely phased out by 2024. 

Beginning January 1, 2021, CMS is adding 11 procedures to the ambulatory surgical center covered-procedures list, including total hip arthroplasty (CPT 27130), under its standard review process. 

Additionally, CMS is revising the criteria used to add surgical procedures to the ambulatory surgical center-covered procedures list (ASC CPL), providing that physicians consider certain criteria based on these procedures in the past.

Using revised criteria, CMS is adding an additional 267 surgical procedures to the ASC CPL beginning January 1, 2021. 

Finally, CMS is adopting a notification process for surgical procedures the public believes can be added to the ASC CPL.

WHY THIS MATTERS 

These changes will make these procedures eligible to be paid by Medicare when furnished in the hospital outpatient setting, when outpatient care is appropriate, as well as allowing them to continue to be payable when furnished in the hospital inpatient setting, when inpatient care is appropriate as determined by the physician.  

In addition to putting decisions on the best site of care in the hands of physicians, allowing more procedures to be done in an outpatient setting also provides for lower-cost options that benefit the patient, CMS said.

For example, thromboendarterectomy (HCPCS code 35372) is a surgical procedure that removes chronic blood clots from the arteries in the lung. If this procedure is performed in an inpatient setting, a patient who has not had other healthcare expenses that year would have a deductible of about $1,500. 

In contrast, the copayment for this procedure for the same patient in the outpatient setting would be about $1,150. 

Patient safety and quality of care will be safeguarded by the doctor's assessment, as well as state and local licensure requirements, accreditation requirements, hospital conditions of participation, medical malpractice laws, and CMS quality and monitoring initiatives and programs.

340B

CMS is announcing that it will continue its policy of paying for 340B-acquired drugs at Average Sales Price, minus 22.5%, after the July 31, 2020 decision of the Court of Appeals for the D.C. Circuit upheld the current policy. 

This policy lowers out-of-pocket drug costs for Medicare beneficiaries by letting them share in the discount that hospitals receive under the 340B program, CMS said. Since this policy went into effect in 2018, Medicare beneficiaries have saved nearly $1 billion on drug costs, with expected Medicare beneficiary drug-cost savings of over $300 million in 2021.

The 340B rule has been controversial, with push-back from hospitals that would lose money badly needed for operations and care during a time when providers are already stretched financially due to the COVID-19 pandemic.

HOSPITAL STAR RATINGS

As part of the agency's Patients Over Paperwork Initiative, CMS is establishing a simple updated methodology to calculate the Overall Hospital Quality Star Rating. The overall star rating summarizes a variety of quality measures published on the Medicare.gov Care Compare tool (the successor to Hospital Compare) for common conditions that hospitals treat, such as heart attacks or pneumonia.

Veterans Health Administration hospitals will be added to CMS' Care Compare, which will help veterans understand hospital quality within the VA system. Overall, these changes will reduce provider burden, improve the predictability of the star ratings, and make it easier for patients to compare ratings between similar hospitals, CMS said.

In response to stakeholder feedback about the current methodology, CMS is not finalizing its proposal to stratify readmission measures under the new methodology based on dually-eligible patients, but said it would continue to study the issue to find the best way to convey quality of care for this vulnerable population.
 
REPORTING ON COVID

Finally, to address the ongoing public health emergency, CMS is finalizing a new requirement for the nation's 6,200 hospitals and critical access hospitals to report information about their inventory of therapeutics to treat COVID-19.

This reporting will provide the information needed to track and accurately allocate therapeutics to the hospitals that need additional inventory to care for patients and meet surge needs.

THE LARGER TREND

These changes implement the Trump Administration's Executive Order on Protecting and Improving Medicare for Our Nation's Seniors, and will take effect on January 1, 2021.

ON THE RECORD

"President Trump's term in office has been marked by an unrelenting drive to level the playing field and boost competition at every turn," said CMS Administrator Seema Verma. "Today's rule is no different. It allows doctors and patients to make decisions about the most appropriate site of care, based on what makes the most sense for the course of treatment and the patient without micromanagement from Washington."

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com