CMS Releases 2021 Final Outpatient Prospective Payment System/Ambulatory Surgical Center Rule

On December 2, CMS finalized policy changes for the Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) final rules.

In this final rule, CMS will begin eliminating the inpatient only (IPO) list of 1,700 procedures for which Medicare will only pay when performed in the hospital inpatient setting over a three-year transitional period, beginning with some 300 primarily musculoskeletal-related services. The IPO list will be completely phased out by calendar year (CY) 2024. This 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 continuing to be payable when furnished in the hospital inpatient setting when inpatient care is appropriate, as determined by the physician. In the short term, as hospitals face surges in patients with complications from COVID-19, being able to provide treatment in outpatient settings will allow non-COVID-19 patients to get the care they need.

CMS is adding 11 procedures to the ASC Covered Procedures List (CPL), including total hip arthroplasty (CPT 27130), under our  standard review process. Additionally, CMS is revising the criteria used to add surgical procedures to the ASC CPL, providing that certain criteria used to add surgical procedures to the ASC CPL in the past will now be factors for physicians to consider in deciding whether a specific beneficiary should receive a covered surgical procedure in an ASC. Using the revised criteria, CMS added 267 surgical procedures to the ASC CPL beginning January 1, 2021. Finally, CMS adopted a notification process for surgical procedures the public believes can be added to the ASC CPL.

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 upholding 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. 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 CY 2021.

As part of the agency’s Patients Over Paperwork Initiative, which is aimed at reducing burden for health care providers, CMS is establishing a simple updated methodology to calculate the Overall Hospital Quality Star Rating (Overall Star Rating). The Overall Star Rating summarizes a variety of quality measures published on the Care Compare tool (the successor to Hospital Compare) for common conditions that hospitals treat, such as heart attacks or pneumonia. Along with publicly reported data on Care Compare, the Overall Star Rating helps patients make better-informed health care decisions. Veterans Health Administration hospitals will be added to CMS’ Care Compare, which will help veterans understand hospital quality within the VA system.

In response to stakeholder feedback about the current methodology used to calculate the Overall Star Rating, CMS is not finalizing its proposal to stratify readmission measures under the new methodology based on dually eligible patients, but it will continue to study the issue to find the best way to convey quality of care for this vulnerable population.

Finally, in order 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.

For more information, see the fact sheet here: Fact Sheet

For more information, see the final rule here: Final Rule


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