2024 OPPS Proposed Rule: Part 2

Last week, in our initial treatment of Medicare’s recently released 2024 Outpatient Prospective Payment System (OPPS) Proposed Rule, we highlighted what the Center for Medicare and Medicaid Services (CMS) has planned for two areas: (a) payment rates, and (b) the intensive outpatient program (IOP). Today’s article will update our readers on the rest of the rule.

Partial Hospitalization Program

The Partial Hospital Program (PHP) is an intensive, structured outpatient program provided as an alternative to psychiatric hospitalization. It consists of a specified group of mental health services paid on a per diem basis under OPPS, based on PHP per diem costs.

Partial Hospitalization Program (PHP) Rate Setting

The CY 2024 OPPS/ASC proposed rule proposes updates to Medicare payment rates for partial hospitalization program services furnished in hospital outpatient departments and community mental health centers (CMHCs).

Update to PHP Per Diem Rates

CMS is proposing to expand the existing rate structure to include two PHP APCs for each provider type; one for days with three services per day and one for days with four or more services per day.

For CY 2024, CMS is proposing to calculate hospital-based and CMHC PHP payment rates for (a) three services per day, and (b) four or more services per day, on a cost per day basis, using a broader OPPS data set that includes PHP and non-PHP days. This represents a change from the current methodology of using only PHP data. CMS believes using the broader OPPS data set would allow CMS to capture data from hospital claims that are not identified as PHP, but that include the service codes and intensity required for a PHP day.

Clarification about Substance Use Disorder (SUD) Treatment under PHP

CMS is clarifying in the CY 2024 proposed rule that Medicare covers PHP for the treatment of substance use disorders (SUD). Specifically, CMS is clarifying that, in general, notwithstanding the requirement that PHP services are provided in lieu of inpatient hospitalization, Medicare covers PHP for the treatment of SUD, and CMS considers services that are for the treatment of SUD and behavioral health generally to be consistent with the statutory and regulatory definitions of PHP services.

Hospital Price Transparency

According to CMS, its hospital price transparency regulations “lay the foundation for a patient-driven healthcare system by making hospital standard charges’ data available to the public.” In an effort to strengthen compliance with these regulations and improve the public’s understanding and use of hospital information, the proposed OPPS rule for 2024 modifies the standard charge display requirements at 45 CFR 180.50. In addition, the rule updates the enforcement provisions at 45 CFR 180.70 to streamline and improve the transparency of the enforcement process.

Overall, the proposed policies would further advance the government’s commitment to increasing price transparency and hospital compliance. CMS has published a separate fact sheet that discusses the hospital price transparency provisions of the 2024 Hospital OPPS proposed rule, which can be found here: CY 2024 Hospital Outpatient Prospective Payment System (OPPS) Policy Changes: Hospital Price Transparency Proposals (CMS-1786-P) | CMS.

OPPS Payment for 340B Drugs

Section 340B of the Public Health Service Act (340B) allows participating hospitals and other providers to purchase certain covered outpatient drugs from manufacturers at discounted prices. For CY 2024, CMS is proposing to continue to pay the statutory default rate, which is generally ASP plus six percent, for 340B acquired drugs and biologicals.

The payment for 340B acquired drugs and biologicals would not differ from the payment rate for drugs and biologicals not acquired through the 340B program. As our readers may recall, CMS released a proposed rule on July 7, 2023 discussing its remedy for payment for 340B acquired drugs for CYs 2018 to 2022—including how those payments would impact OPPS payment policy in future calendar years. This is addressed in a separately proposed rule, available here: https://www.federalregister.gov/public-inspection/2023-14623/medicare-program-hospital-outpatient-prospective-payment-system-remedy-for-the-340b-acquired-drug.

OPPS Payment for Dental Services

For CY 2024, CMS is proposing Medicare payment rates under the OPPS for approximately 230 dental codes to align with the dental payment provisions in the CY 2023 Physician Fee Schedule final rule by assigning them to clinical APCs (ambulatory payment classifications). In CMS’ estimation, assigning additional dental codes to clinical APCs would (a) result in greater consistency in Medicare payment for different sites of service, and (b) help to ensure patient access to dental services performed in the hospital outpatient setting when payment and coverage requirements are met. The proposed APC assignments for the dental codes can be found in the Addendum B of the proposed rule (2023-14768.pdf (federalregister.gov). To view the full CMS fact sheet on the 2024 OPPS proposed rule, go to CY 2024 Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System Proposed Rule (CMS 1786-P) | CMS.

Missed our previous alert about the OPPS Proposed Rule? Check it out here.

from
https://www.coronishealth.com/blog/2024-opps-proposed-rule-part-2/

2024 OPPS Proposed Rule: What Hospitals Need to Know

Last week, the Centers for Medicare & Medicaid Services (CMS) published its calendar year (CY) 2024 Hospital Outpatient Prospective Payment System (OPPS) Proposed Rule (PR), along with the ASC Payment System Proposed Rule. There is a 60-day comment period on the PR, which will end on September 11, 2023. The final rule will be issued in early November. CMS also released a fact sheet that provides a summary of the key provisions of the PR. The following includes highlights from the fact sheet that deal specifically with payment updates and the proposed Intensive Outpatient Program.

OPPS Payment Update

In accordance with Medicare law, CMS proposes updating OPPS payment rates for hospitals that meet applicable quality reporting requirements by 2.8 percent. This update is based on the projected hospital market basket percentage increase of 3.0 percent, reduced by a 0.2 percentage point for the productivity adjustment.

Intensive Outpatient Program

The PR establishes the Intensive Outpatient Program (IOP) under Medicare, and includes the scope of benefits, physician certification requirements, coding and billing, and payment rates under the IOP benefit. Per the PR, IOP services may be furnished in hospital outpatient departments, Community Mental Health Centers (CMHCs), Federally Qualified Health Centers (FQHCs), and Rural Health Clinics (RHCs), if finalized. These proposals are designed to address one of the main gaps that CMS sees in the area of behavioral health coverage.

Here are some of the proposed details of the program:

Scope of Benefits for IOP

CMS is proposing to set forth the scope of benefits for IOP services as mandated by section 4124 of The Consolidated Appropriations Act (CAA), 2023. An IOP is a distinct and organized outpatient program of psychiatric services provided for individuals who have an acute mental illness or substance use disorder, consisting of a specified group of behavioral health services paid on a per diem basis under the OPPS or other applicable payment system when furnished in hospital outpatient departments, CMHCs, FQHCs and RHCs. CMS is proposing to base the per diem costs of items and services included in IOP that have been, and are, paid for by Medicare either as part of the PHP benefit or under the OPPS more generally.

Physician Certification and Plan of Treatment Requirements for IOP

As amended by section 4124(a) of the CAA, 2023, section 1861(ff)(1) of the Social Security Act (the Act) requires that a physician determine that each patient needs a minimum of nine hours of IOP services per week, and this determination must occur no less frequently than every other month. CMS is proposing to codify this requirement in regulation for IOP provided in all settings and is soliciting comments on the recertification period.

IOP Payment Rates and Policy in Hospital Outpatient Departments and CMHCs

CMS is proposing to establish two IOP Ambulatory Payment Classifications (APCs) for each provider type; one for days with three services per day and one for days with four or more services per day.

For CY 2024, CMS is proposing to calculate hospital-based and CMHC IOP payment rates for three services per day and four or more services per day based on cost per day using a broader set of OPPS data that includes PHP days and non-PHP days. While no Medicare IOP benefit currently exists, CMS believes using the broader OPPS data set would allow the capture of data from hospital claims that are not identified as IOP, but that include the service codes and intensity required for an IOP day.

RHCs and FQHCs

For 2024, CMS is proposing to make conforming regulatory text changes to applicable RHC and FQHC regulations related to the scope of IOP benefits and services, certification and plan of care requirements, and special payment rules for IOP services as mandated by section 4124 of the CAA, 2023. The scope of IOP benefits and certification and plan of care requirements will be the same for RHCs and FQHCs as described above for hospitals. CMS is proposing to pay for three IOP services/day and according to the statute, payment is based on the hospital rate. That is, RHCs would be paid the three services per day payment amount for hospital outpatient departments. For FQHCs, payment would be the lesser of a FQHC’s actual charges or the three services per day payment amount for hospital outpatient departments. For grandfathered tribal FQHCs, payment would be the Medicare outpatient per visit rate as established by the IHS when furnishing IOP services, and payment is based on the lesser of a grandfathered tribal FQHC’s actual charges or the Medicare outpatient per visit rate.

Opioid Treatment Program (OTP) Settings

The PR extends IOP coverage to include OTPs. CMS proposes to establish a weekly payment adjustment via an add-on code for IOP services furnished by OTPs for the treatment of opioid use disorder and to revise the definition of opioid use disorder treatment services to include IOP services. The payment adjustment would also be updated based on the Medicare Economic Index and receive the Geographic Adjustment Factor if finalized.

CMS is proposing that Medicare would pay for IOP services provided by OTPs as long as each service is medically reasonable and necessary, and not duplicative of any service paid for under any bundled payments billed for an episode of care in a given week. In order for an OTP to receive the additional payment adjustment for IOP services, a physician must certify that the beneficiary requires a higher level of care intensity compared to existing OTP services, and the certification, plan of care, and all other applicable requirements are met.

We will have more highlights from the 2024 OPPS PR in next week’s alert.

Also interested in learning about the 2024 Inpatient Prospective Payment System (IPPS) Proposed Rule? Check out one of our previous alerts reviewing related details here.

from
https://www.coronishealth.com/blog/2024-opps-proposed-rule-what-hospitals-need-to-know/

Drug Payment Policy: A Proposed Remedy by CMS

I’m sure the mercurial Dr. Jekyll and the feverish Dr. Frankenstein felt they were operating under sound medical principles when they first began their eccentric experiments, but their research soon became bigger than the both of them. Sometimes, despite our best efforts, we end up creating a monster. That’s what happened, in a sense, with a certain drug payment program that has taken on a life of its own.

According to a recent publication from the Centers for Medicare and Medicaid Services (CMS), new rules have just been announced that will address the 340B drug issue, which has been in a holding position for several months.

Creating a Problem

Per CMS, Section 340B of the Public Health Service Act allows participating hospitals and other providers to purchase certain covered outpatient drugs or biologicals (hereinafter referred to collectively as “drugs”) from manufacturers at discounted prices. Prior to 2018, the Medicare payment rate for Part B covered outpatient drugs provided in outpatient hospitals was generally the statutory default of the average sales price (ASP) plus six percent. In the CY 2018 OPPS/ASC final rule, CMS adjusted the payment rate for 340B drugs to ASP minus 22.5 percent to reflect more accurately the actual costs incurred by 340B hospitals when acquiring 340B drugs. This rate applied from CY 2018 through approximately the third quarter of CY 2022. To comply with statutory budget neutrality requirements under the OPPS, CMS made a corresponding increase to payments to all hospitals (340B hospitals and non-340B hospitals) for non-drug items and services, which was in effect from CY 2018 through CY 2022.

On June 15, 2022, the Supreme Court of the United States (SCOTUS), in American Hospital Association v. Becerra [142 S. Ct. 1896 (2022)], unanimously ruled that the differential payment rates for 340B-acquired drugs were unlawful because, prior to implementing the rates, the U.S. Department of the Health and Human Services (HHS) failed to conduct a survey of hospitals’ acquisition costs under the relevant statute. Following on the heels of the SCOTUS decision, the U.S. District Court for the District of Columbia (DC) vacated the differential payment rates for 340B-acquired drugs going forward. As a result, all CY 2022 claims for 340B-acquired drugs paid on or after September 28, 2022, were paid at the default rate (generally ASP plus six percent).

In the CY 2023 OPPS/ASC final rule:

• CMS finalized a general payment rate of ASP plus six percent for drugs acquired through the 340B Program, consistent with the agency’s policy for drugs not acquired through the 340B program. As required by statute, CMS implemented a 3.09 percent reduction to the payment rates for non-drug items and services to achieve budget neutrality for the 340B drug payment rate change for CY 2023. This budget neutrality change ensured the CY 2023 OPPS conversion factor (CF) was equivalent to the CF that would have been in place had the 340B drug payment policy never been implemented.
  
• CMS announced that it would address the remedy for 340B drug payments from CY 2018-2022 in future rulemaking prior to the release of the CY 2024 OPPS/ASC proposed rule.

Crafting A Solution

In light of the above-referenced Supreme Court decision and the subsequent district-level court remand to the federal government, CMS issued a proposed rule (PR) on July 7, 2023, outlining the proposed remedy for the 340B drug payment policy for CY 2018-2022. The agency is publishing the PR to rectify the payment rates that the Court held to be invalid. Aspects of this proposed policy will affect nearly all hospitals paid under the OPPS. Below are some of the highlights of the PR.

Lump Sum Payments to Affected Providers for 340B-Acquired Drugs

CMS is proposing to make an additional payment to affected providers for 340B-acquired drugs as a one-time lump sum payment. The agency estimates that, for CY 2018 through the approximate third quarter of 2022, certain OPPS 340B providers received $10.5 billion less in 340B drug payments than they would have without the 340B policy. However, many CY 2022 340B drug claims have been processed, or reprocessed through standard claims processing, at the higher default payment rate since the 340B payment policy was vacated on September 27, 2022. As a result, affected 340B providers have already received from Medicare and beneficiaries $1.5 billion of the $10.5 billion that would otherwise have had to be remedied through these reprocessed claims. For the remaining $9 billion owed to affected 340B providers for claims covering CYs 2018 through 2022, CMS is proposing to make a one-time lump-sum payment to each 340B-covered entity hospital that was paid less due to the now-invalidated policy. The PR contains the calculations of the amounts owed to each of the approximately 1,600 affected 340B covered entity hospitals.

Beneficiary Copayments

Beneficiary copayments make up approximately 20 percent of the payments affected 340B covered entity hospitals did not receive due to the 340B payment policy. Because CMS plans to structure the remedy as a lump-sum remedy payment, providers would not be able to bill beneficiaries for that cost sharing. To account for that fact, and to ensure that affected 340B providers are put in as close to the same position as if the 340B payment policy had never existed, Medicare proposes to account for beneficiary cost sharing within the one-time lump sum payment to affected hospitals. Under this proposal, affected 340B covered entity hospitals may not bill beneficiaries for coinsurance on remedy payments.

Prospective Offset for Higher Payments for Non-Drug Items and Services

As part of this proposed remedy, CMS proposes to maintain budget neutrality as required by statute. The agency finalized the 340B policy for CY 2018 in 2017 in a budget neutral manner that included increasing payments for non-drug items and services; this payment increase was in effect from CY 2018 through CY 2022. The PR calls for a corresponding offset to maintain budget neutrality as if the 340B payment policy had never been in effect. To carry out this required $7.8 billion budget neutrality adjustment, CMS is proposing to reduce future non-drug item and service payments by adjusting the OPPS CF by minus 0.5 percent, starting in CY 2025. Per the PR, CMS would continue making this adjustment until the full $7.8 billion is offset, which CMS estimates to be 16 years.

Beneficiary copayments for non-drug items and services would decrease slightly in upcoming years as a result of the proposed prospective offset to the OPPS conversion factor.

New Providers

CMS is proposing that providers who did not enroll in Medicare until after January 1, 2018, and thus did not fully benefit from the increased payment for non-drug items and services from CY 2018 through CY 2022, would be excluded from the prospective rate reduction.

This PR will have a 60-day comment period, which will end on September 5, 2023. For more information on the provisions of the PR, please click on the following weblink: https://www.federalregister.gov/documents/current. CMS anticipates issuing the final rule before the CY 2024 OPPS final rule is published this fall.

from
https://www.coronishealth.com/blog/drug-payment-policy-a-proposed-remedy-by-cms/

Getting Permission: New Service Added to OPPS Preauthorization Regime

In the iconic film Apocalypse Now, we’re told how Col. Walter E. Kurtz had undertaken a major military action without getting prior approval from the general staff. Even though it resulted in an unmitigated success, his superiors were going to severely discipline him for skirting the chain of command. However, when the news media got wind of his brilliant victory, he was instead promoted.

You’ve heard the modern aphorism that it’s better to act now and ask forgiveness later than it is to ask permission and risk being denied. Well, that may work for some people in some situations; but it won’t work in the setting and circumstance described hereinbelow. In fact, it will cause you to crash and burn.

Mother, May I?

It is interesting how childhood diversions prepare us for grownup life, such as the game where kids have to politely ask permission of a designated “mother” before proceeding forward. While adults may no longer need to get their mother’s permission before acting, the nanny state still imposes a certain stringency upon its subjects. That is, in some circumstances, the government still requires you to be on your Ps and Qs, to say please and to get prior approval.

The Centers for Medicare & Medicaid Services (CMS) has something known as the Hospital Outpatient Department (OPD) Prior Authorization program, first implemented in July 2020. According to the program’s website:

CMS believes prior authorization for certain hospital OPD services will ensure that Medicare beneficiaries continue to receive medically necessary care while protecting the Medicare Trust Fund from improper payments and keeping the medical necessity documentation requirements unchanged for providers.

So, the whole point of the program is to preemptively deny payment for certain procedures CMS has previously determined to be dubious or potentially tenuous in terms of the medical necessity threshold. They want you to get prior permission before proceeding with the service. Otherwise, you invite a big fat denial upon the submission of your claim.

CMS maintains a list of medical services and procedures performed in the hospital OPD that are subject to the prior authorization requirement. These include the following:

• Blepharoplasty
• Botulinum toxin injection
• Rhinoplasty
• Panniculectomy
• Vein ablation
• Cervical fusion with disc removal
• Implanted spinal neurostimulators

The Prior Authorization program does not create new documentation requirements, per se. Rather, the documentation required to be included with a prior authorization request is information that hospital OPDs are regularly required to maintain for Medicare payments. For specific documentation details, go the applicable program website: Prior Authorization for Certain Hospital Outpatient Department (OPD) Services | CMS.

Expanding the List

The Hospital OPD Prior Authorization program has added a new service category to its list of medical services and procedures subject to the prior approval mandate. According to the program’s website, “For dates of service beginning on or after July 1, 2023, the following additional hospital OPD service category will be required as a condition of payment: Facet Joint Interventions.” In the event there is some confusion as to what specific services “facet joint interventions” entail, here is a list of applicable codes and corresponding descriptors as supplied by CMS’ guidance on this matter (Transmittal 11753):

A Look at the Process

As it concerns the obtaining of prior authorization for these facet-related services, as well as the other services previously listed, the request must be submitted by the hospital OPD, the OPD physician, or other third party on behalf of the OPD, referred to as a “requester.” Under the Prior Authorization process, the requester must submit the request with the required documentation before the service is rendered. If a provider is currently exempt from OPD prior authorization process, that provider should not submit prior authorization requests, including those dealing with facet joint interventions.

After receipt of all required documentation from the requester, your regional Medicare administrative contractor (MAC) will review the prior authorization request and issue a provisional affirmation or non-affirmation within ten (10) business days of receipt. (A provider may request an expedited review if the beneficiary’s life, health, or ability to regain maximum function is in jeopardy.)

If the prior authorization request is not approved by your MAC, the requester may revise and resubmit the request an unlimited number of times. The MAC will review and communicate a decision within ten (10) business days on each resubmitted prior authorization request, providing detailed reasons for the non-affirmation decisions, as well as offering education to help the provider resolve any underlying issues.

So, like any good parent who doesn’t just deny you permission but tells you why, so CMS issues a rationale for its rejections of providers’ prior authorization requests. Nevertheless, all this acts as a stark reminder that not all supplications we submit to the government are going to be granted—no matter how politely we ask. Sometimes, Mother says “no.”

from
https://www.coronishealth.com/blog/getting-permission-new-service-added-to-opps-preauthorization-regime/