CMS Releases 2022 Outpatient Prospective Payment System/Ambulatory Surgical Center Proposed Rule

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CMS Releases 2022 Outpatient Prospective Payment System/Ambulatory Surgical Center Proposed Rule

On July 19, 2021, CMS published a proposed rule for the 2022 calendar year (CY) Medicare Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) settings. The OPPS/ASC Schedule sets the annual payment rates, policies, and regulations related to Outpatient Facilities and Ambulatory Surgical Centers.

On July 19, 2021, the Centers for Medicare & Medicaid Services (CMS) proposed Medicare payment rates for hospital outpatient and Ambulatory Surgical Center (ASC) services. The CY 2022 Hospital Outpatient Prospective Payment System (OPPS) and ASC Payment System Proposed Rule is published annually and will have a 60-day comment period, which will end on September 17, 2021. The final rule with comment period will be issued in early November.

In addition to proposing updated payment rates, this year’s rule includes proposals that align with several key goals of the Biden Administration, including addressing the health equity gap, fighting the COVID-19 public health emergency (PHE), encouraging transparency in the health system, and promoting safe, effective, and patient-centered care.

Updates to OPPS and ASC payment rates

In accordance with Medicare law, CMS is proposing to update OPPS payment rates for hospitals that meet applicable quality reporting requirements by 2.3%. This update is based on the projected hospital market basket increase of 2.5% reduced by 0.2 percentage points for the productivity adjustment.

In the CY 2019 OPPS/ASC final rule with comment period, CMS finalized our proposal to apply the hospital market basket update to ASC payment system rates for an interim period of 5 years (CY 2019 through CY 2023). Using the proposed hospital market basket, CMS is updating the ASC rates for CY 2022 by 2.3%. The proposed update applies to ASCs meeting relevant quality reporting requirements. This change is based on the projected hospital market basket increase of 2.5% with a 0.2 percentage point productivity adjustment.

Use of CY 2019 Claims Data for CY 2022 OPPS and ASC Payment System Rate-setting Due to the PHE

For the OPPS and ASC rate-setting process, CMS stated they believe that the CY 2020 data are not the best overall approximation of expected outpatient hospital services in CY 2022. Instead, they believe the CY 2019 data, as the most recent complete CY of data prior to the COVID-19 PHE, are a better approximation of expected costs for CY 2022 hospital outpatient services for rate-setting purposes. As a result, CMS is proposing to use CY 2019 data to set CY 2022 OPPS and ASC payment system rates.

Changes to the Inpatient Only List

Since the beginning of the OPPS, the Inpatient Only (IPO) list has defined the list of services that, due to their medical complexity, Medicare will only pay for when performed in the inpatient setting. In the CY 2021 OPPS/ASC final rule, CMS finalized a policy to eliminate the IPO list over a 3-year period, removing 298 services from the IPO list in the first phase of the elimination. However, they received a large number of stakeholder comments throughout the CY 2021 rulemaking cycle and following issuance of the final rule with comment period that opposed the elimination of the IPO list primarily due to patient safety concerns, stating that the IPO list serves as an important programmatic safeguard.

For CY 2022, CMS is proposing to halt the elimination of the IPO list and, after clinical review of the services removed from the IPO list in CY 2021, propose to add the 298 services removed from the IPO list in CY 2021 back to the IPO list beginning in CY 2022. This includes several spine surgical services.

This change in policy would ensure that any service removed from the IPO list has been reviewed against Medicare’s longstanding IPO list criteria to determine if it is appropriate for Medicare to pay for the provision of the service in the outpatient setting. Furthermore, CMS is proposing to codify the longstanding criteria for removal of procedures from the IPO list to make clear in regulatory text how it will evaluate future procedures for removal.

In addition, CMS is soliciting comment on several policy modifications, including whether CMS should maintain the longer-term objective of eliminating the IPO list or maintaining the IPO list but continuing to systematically scale the list back so that inpatient only designations are consistent with current standards of practice.

Changes to the ASC Covered Procedures List

In the CY 2021 OPPS/ASC final rule, CMS revised the long-standing safety criteria that were historically used to add covered surgical procedures to the ASC Covered Procedures List (ASC CPL) and adopted a notification process for surgical procedures the public believes can be added to the ASC CPL under the criteria they retained.

Using these revised criteria, CMS added 267 surgical procedures to the ASC CPL beginning in CY 2021, including several spine surgery procedures. 

For CY 2022, CMS is proposing to reinstate the criteria (which related to patient safety) for adding a procedure to the ASC CPL that were in place in CY 2020 and prior. CMS is also proposing to remove from the ASC CPL 258 of the 267 procedures that were added in CY 2021. 

CMS is requesting comment on whether any of the 258 procedures proposed for removal from the ASC CPL meet the proposed reinstated criteria.

CMS is also proposing to adopt a nomination process, under which, on or after January 1, 2023, an external party could nominate a surgical procedure to be added to the ASC CPL. If CMS determines that a surgical procedure meets the requirements to be added to the ASC CPL, including a surgical procedure nominated by an external party, it would propose to add the surgical procedure to the ASC CPL in the next applicable rule-making session. 

Payment for Non-Opioid Products Under Section 6082 of the SUPPORT Act

The law requires that the Secretary must review payments under the OPPS and ASC for opioids and evidence-based non-opioid alternatives for pain management to ensure there are not financial incentives to use opioids instead of non-opioid alternatives. For CY 2022, CMS is proposing to modify its current policy, adopted under section 1833(t)(22)(A) and section 1833(i)(8), as added by section 6082(a) and (b), respectively, of the SUPPORT Act to provide for separate or modified payment for non-opioid pain management drugs and biologicals that function as supplies in the ASC setting when those products meet certain criteria, as determined by CMS. 

CMS proposes that beginning on or after January 1, 2022, a non-opioid pain management drug or biological that functions as a surgical supply in the ASC setting would be eligible for separate payment when it is FDA approved and indicated for pain management or as an analgesic and with a per day cost above the OPPS/ASC drug packaging threshold. Accordingly, CMS is proposing to continue separate payment in the ASC setting in CY 2022 for the two products currently receiving separate payment under this policy because they meet the proposed criteria.

CMS is soliciting comment on establishing an application process, through which an external party could submit an application for separate payment for a non-opioid pain management drug or biological that functions as a surgical supply.

In addition, CMS is soliciting comment on several additional criteria that could be implemented through future rulemaking, such as the presence of peer-reviewed literature that demonstrates a clinically significant decrease in opioid use during the surgical procedure and postoperative period.

ISASS will review the proposed rule in detail and provide written comments to CMS to all relevant issues in advance of the comment deadline.

To read the CMS Fact Sheet, see here: https://www.cms.gov/newsroom/fact-sheets/cy-2022-medicare-hospital-outpatient-prospective-payment-system-and-ambulatory-surgical-center

To read the full rule, see here: https://www.federalregister.gov/public-inspection/2021-15496/medicare-program-hospital-outpatient-prospective-payment-and-ambulatory-surgical-center-payment