The Centers for Medicare & Medicaid Services (CMS) has published its proposed Medicare Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) rates and policies for calendar year 2020. In addition to making annual updates to the OPPS and ASC payment systems, CMS includes a controversial proposal to require all hospitals to disclose payer-specific pricing, including “consumer-friendly” information for hundreds of “shoppable” services. CMS is accepting comments on the proposed rule through September 27, 2019. The following are highlights of the proposed rule.

Hospital Outpatient Provisions

CMS proposes a 2.7% update to OPPS rates for 2020, with the update reduced by 2.0% for hospitals that fail to meet quality reporting requirements. Payment changes for individual procedures vary. CMS estimates total OPPS payments would increase by $6 billion in CY 2020 compared with 2019 under the rule.

Other OPPS policy proposals include the following, among many others:

  • CMS proposes an alternative pathway for OPPS device pass-through payment status for transformative devices with Food and Drug Administration Breakthrough Device designation. CMS references its earlier solicitation of comments on potential changes to the substantial clinical improvement (SCI) criterion for OPPS transitional pass-through device payments that was included in the proposed fiscal year 2020 inpatient prospective payment system rule.
  • CMS is considering changes to its high-cost/low-cost threshold policy for packaged skin substitutes for 2020, and CMS solicits comments on a proposed episodic payment policy for future years.
  • CMS proposes removing total hip arthroplasty from the inpatient only list and allowing this procedure to be performed in the outpatient hospital setting. CMS also proposes that procedures removed from the inpatient only list would be exempt from certain medical review activities for the initial year.
  • CMS proposes creating two new comprehensive ambulatory payment classifications (C-APCs), one for Level 2 Vascular Procedures and one for Level 1 Neurostimulator and Related Procedures, raising the total number of C-APCs to 67.
  • CMS proposes to once again increase the per-day cost threshold for separate payment for certain outpatient drugs to $130, up from $125 in 2019. CMS also discusses options for pricing drugs purchased through the 340B program in light of pending litigation.
  • CMS proposes to establish a prior authorization process for five categories of services that often may be cosmetic: blepharoplasty, botulinum toxin injections, panniculectomy, rhinoplasty, and vein ablation.
  • CMS proposes various updates to Hospital Outpatient Quality Reporting Program requirements.
  • CMS proposes changing the minimum required level of supervision for hospital outpatient therapeutic services from direct supervision to general supervision.

ASC Provisions

CMS proposes to increase Medicare ASC rates by 2.7% if ASC Quality Reporting (ASCQR) Program requirements are met, for an estimated $200 million increase in total Medicare ASC payments in 2020. Policy proposals include the following:

  • CMS proposes to allow total knee arthroplasty procedures (CPT 27447) to be performed in the ASC setting, and seeks comments on appropriate patient safeguards. CMS also proposes to add to the ASC covered procedure list CPT 29867 Arthroscopy, knee, surgical; osteochondral allograft (eg, mosaicplasty) and six coronary intervention procedures.
  • CMS proposes limiting the ASC payment rate for low-volume, device intensive procedure to a payment rate equal to the procedure’s OPPS payment rate.
  • CMS proposes updates to ASCQR Program requirements.

Hospital Price Transparency Provisions

CMS proposes to expand a current requirement that hospitals make public a list of their standard charges in a machine-readable format. First, CMS proposes to require hospitals to make available online in a machine-readable file the hospital’s gross charges and payer-specific negotiated charges for all items and services.

Second, CMS proposes requiring hospital to make public in a consumer-friendly manner their payer-specific negotiated charges for a set of what CMS describes as “shoppable” services – defined as a service package that can be scheduled by a health care consumer in advance. This requirement would apply initially to 300 services, including 70 identified by CMS, and increase in the future. Hospitals also would have to identify and list payer-specific negotiated charges for all associated ancillary items and services it provides with the shoppable service, and any charge differences based on whether the service is provided in the inpatient or outpatient setting. Hospitals in violation of the hospital price transparency provisions would be subject to civil money penalties of up to $300 per day.