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Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems; Quality Reporting Programs; Payment for Intensive Outpatient Services in Hospital Outpatient Departments, Community Mental Health Centers, Rural Health Clinics, Federally Qualified Health Centers, and Opioid Treatment Programs; Hospital Price Transparency; Changes to Community Mental Health Centers Conditions of Participation, Changes to the Inpatient Prospective Payment System Medicare Code Editor; Rural Emergency Hospital Conditions of Participation Technical Correction rule (2023)

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The Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems; Quality Reporting Programs; Payment for Intensive Outpatient Services in Hospital Outpatient Departments, Community Mental Health Centers, Rural Health Clinics, Federally Qualified Health Centers, and Opioid Treatment Programs; Hospital Price Transparency; Changes to Community Mental Health Centers Conditions of Participation, Changes to the Inpatient Prospective Payment System Medicare Code Editor; Rural Emergency Hospital Conditions of Participation Technical Correction is a significant rule issued by the Centers for Medicare and Medicaid Services (CMS), effective January 1, 2024 that revises the Medicaid hospital outpatient prospective payment system and the Medicare ambulatory surgical center payment system for 2024.[1]

HIGHLIGHTS
  • Name: Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems; Quality Reporting Programs; Payment for Intensive Outpatient Services in Hospital Outpatient Departments, Community Mental Health Centers, Rural Health Clinics, Federally Qualified Health Centers, and Opioid Treatment Programs; Hospital Price Transparency; Changes to Community Mental Health Centers Conditions of Participation, Changes to the Inpatient Prospective Payment System Medicare Code Editor; Rural Emergency Hospital Conditions of Participation Technical Correction
  • Code of Federal Regulations: 42 CFR 405, 42 CFR 410, 42 CFR 416, 42 CFR 419, 42 CFR 424, 42 CFR 485, 42 CFR 488, 42 CFR 489, 45 CFR 180
  • Action: final rule with comment period
  • Type of significant rule: Economically significant rule

    • Timeline

    The following timeline details key rulemaking activity:

    Background

    The payment policy for the Medicare hospital outpatient prospective payment system (OPPS) and the Medicare ambulatory surgical center (ASC) payment system was finalized in 2014 and became effective January 1, 2015. At this time the Ambulatory Payment Classification (APC) also became effective.[1]

    Summary of the rule

    The following is a summary of the rule from the rule's entry in the Federal Register:[1]

    “

    This final rule with comment period revises the Medicare hospital outpatient prospective payment system (OPPS) and the Medicare ambulatory surgical center (ASC) payment system for calendar year 2024 based on our continuing experience with these systems. In this final rule, we describe the changes to the amounts and factors used to determine the payment rates for Medicare services paid under the OPPS and those paid under the ASC payment system. Also, this final rule updates and refines the requirements for the Hospital Outpatient Quality Reporting (OQR) Program, the ASC Quality Reporting (ASCQR) Program, and the Rural Emergency Hospital Quality Reporting (REHQR) Program. In this final rule, we are also establishing a payment for certain intensive outpatient services under Medicare, beginning January 1, 2024. In addition, this final rule updates and refines requirements for hospitals to make public their standard charge information and enforcement of hospital price transparency. We are finalizing changes to the community mental health center (CMHC) Conditions of Participation (CoPs) to provide requirements for furnishing intensive outpatient (IOP) services, and we are finalizing the proposed personnel qualifications for mental health counselors (MHCs) and marriage and family therapists (MFTs). Additionally, we are finalizing the removal of discussion of the inpatient prospective payment system (IPPS) Medicare Code Editor (MCE) from the annual IPPS rulemakings, beginning with the fiscal year (FY) 2025 rulemaking. Finally, we are finalizing a technical correction to the Rural Emergency Hospital (REH) CoPs under the standard for the designation and certification of REHs.[2]

    		”

    Summary of provisions

    The following is a summary of the provisions from the rule's entry in the Federal Register:[1]

    “

    • OPPS Update:

    For 2024, we are increasing the payment rates under the OPPS by an Outpatient Department (OPD) fee schedule increase factor of 3.1 percent. This increase factor is based on the final inpatient hospital market basket percentage increase of 3.3 percent for inpatient services paid under the hospital inpatient prospective payment system (IPPS) reduced by a final productivity adjustment of 0.2 percentage point. Based on this update, we estimate that total payments to OPPS providers (including beneficiary cost sharing and estimated changes in enrollment, utilization, and case mix) for calendar year (CY) 2024 will be approximately $88.9 billion, an increase of approximately $6.0 billion compared to estimated CY 2023 OPPS payments.

    We are continuing to implement the statutory 2.0 percentage point reduction in payments for hospitals that fail to meet the hospital outpatient quality reporting requirements by applying a reporting factor of 0.9806 to the OPPS payments and copayments for all applicable services.

    • Data used in CY 2024 OPPS/ASC Ratesetting:

    To set OPPS and ASC payment rates, we normally use the most updated claims and cost report data available. The best available claims data is the most recent set of data which would be from 2 years prior to the calendar year that is the subject of rulemaking. Cost report data usually lags the claims data by a year and we believe that using the most updated cost report extract available from the Healthcare Cost Report Information System (HCRIS) is appropriate for CY 2024 OPPS ratesetting. Therefore, we are using our typical data process of using the most updated cost reports and claims data available for CY 2024 OPPS ratesetting.

    • Partial Hospitalization Update:

    For CY 2024, we are finalizing changes to our methodology used to calculate the Community Mental Health Center (CMHC) and hospital-based PHP (HB PHP) geometric mean per diem costs. We also are finalizing changes to expand PHP payment from two APCs to four APCs.

    • Medicare Payment for Intensive Outpatient Programs:

    Beginning in CY 2024, we are finalizing payment for intensive outpatient program (IOP) services under Medicare. We are finalizing the scope of benefits, physician certification requirements, coding and billing, and payment rates under the IOP benefit. IOP services may be furnished in hospital outpatient departments, community mental health centers (CMHCs), federally qualified health centers (FQHCs), and rural health clinics (RHCs). We also are finalizing payment for intensive outpatient services provided by opioid treatment programs (OTPs) under the existing OTP benefit.

    • Changes to the Inpatient Only (IPO) List:

    For 2024, we are finalizing our proposal to not remove any services from the IPO list for CY 2024.

    • 340B Acquired Drugs:

    For CY 2024, we are continuing to apply the default rate, generally average sales price (ASP) plus 6 percent, to 340B acquired drugs and biologicals in this final rule with comment period. Therefore, drugs and biologicals acquired under the 340B program will be paid at the same payment rate as those drugs and biologicals not acquired under the 340B program.

    • Biosimilar Packaging Exception:

    For CY 2024, we are finalizing our proposal to except biosimilars from the OPPS threshold packaging policy when their reference products are separately paid. However, we are not finalizing that all the biosimilars related to the reference product would be similarly

    packaged if a reference product's per-day cost falls below the threshold packaging policy.

    • Finalizing to Pay IHS and Tribal Hospitals that Convert to a Rural Emergency Hospital (REH) Under the IHS All-Inclusive Rate (AIR):

    For CY 2024, we are finalizing that IHS and tribal hospitals that convert to an REH be paid for hospital outpatient services under the same all-inclusive rate that would otherwise apply if these services were performed by an IHS or tribal hospital that is not an REH. We also are finalizing that IHS and tribal hospitals that convert to an REH would receive the REH monthly facility payment consistent with how this payment is applied to REHs that are not tribally or IHS operated.

    • Device Pass-Through Payment Applications:

    For CY 2024, we received six applications for device pass-through payments. We sought public comment on these applications and are approving four applicants for device pass-through payment status in this final rule with comment period.

    • Cancer Hospital Payment Adjustment:

    For CY 2024, we are continuing to provide additional payments to cancer hospitals so that a cancer hospital's payment-to-cost ratio (PCR) after the additional payments is equal to the weighted average PCR for the other OPPS hospitals using the most recently submitted or settled cost report data. Section 16002(b) of the 21st Century Cures Act requires that this weighted average PCR be reduced by 1.0 percentage point. In light of the public health emergency (PHE) impact on claims and cost data used to calculate the target PCR, we have maintained the CY 2021 target PCR of 0.89 through CYs 2022 and 2023. In this final rule with comment period, we are finalizing to reduce the target PCR by 1.0 percentage point each calendar year until the target PCR equals the PCR of non-cancer hospitals using the most recently submitted or settled cost report data. For CY 2024, we are finalizing a target PCR of 0.88 to determine the CY 2024 cancer hospital payment adjustment to be paid at cost report settlement. That is, the payment adjustments will be the additional payments needed to result in a PCR equal to 0.88 for each cancer hospital.

    • ASC Payment Update:

    For CYs 2019 through 2023, we adopted a policy to update the ASC payment system using the hospital market basket update. In light of the impact of the COVID–19 PHE on healthcare utilization, we are finalizing to extend our policy to update the ASC payment system using the hospital market basket update an additional 2 years—through CYs 2024 and 2025. Using the hospital market basket methodology, for CY 2024, we are increasing payment rates under the ASC payment system by 3.1 percent for ASCs that meet the quality reporting requirements under the ASCQR Program. This increase is based on a hospital market basket percentage increase of 3.3 percent reduced by a productivity adjustment of 0.2 percentage point. Based on this final update, we estimate that total payments to ASCs (including beneficiary cost sharing and estimated changes in enrollment, utilization, and case-mix) for CY 2024 will be approximately $7.1 billion, an increase of approximately $207 million compared to estimated CY 2023 Medicare payments.

    • Changes to the List of ASC Covered Surgical Procedures:

    For CY 2024, we are adding 37 surgical procedures, including total shoulder arthroplasty (TSA) (Healthcare Common Procedure Coding System (HCPCS) code 23472), to the ASC covered procedures list (CPL) based upon existing criteria at § 416.166.

    • Hospital Outpatient Quality Reporting (OQR) Program:

    We are finalizing our proposals to: (1) modify the COVID–19 Vaccination Coverage Among Healthcare Personnel (HCP) measure beginning with the CY 2024 reporting period/CY 2026 payment determination; (2) modify the Cataracts: Improvement in Patient's Visual Function Within 90 Days Following Cataract Surgery measure beginning with the voluntary CY 2024 reporting period; (3) modify the Appropriate Follow-Up Interval for Normal Colonoscopy in Average Risk Patients measure beginning with the CY 2024 reporting period/CY 2026 payment determination; and (4) amend multiple codified regulations to replace references to “QualityNet” with “CMS-designated information system” or “CMS website,” and to make other conforming technical edits, to accommodate recent and future systems requirements and mitigate confusion for program participants.[2]

    		”

    Significant impact

    See also: Significant regulatory action

    Executive Order 12866, issued by President Bill Clinton (D) in 1993, directed the Office of Management and Budget (OMB) to determine which agency rules qualify as significant rules and thus are subject to OMB review.

    Significant rules have had or might have a large impact on the economy, environment, public health, or state or local governments. These actions may also conflict with other rules or presidential priorities. Executive Order 12866 further defined an economically significant rule as a significant rule with an associated economic impact of $100 million or more. Executive Order 14094, issued by President Joe Biden (D) on April 6, 2023, made changes to Executive Order 12866, including referring to economically significant rules as section 3(f)(1) significant rules and raising the monetary threshold for economic significance to $200 million or more.[1]


    The text of the Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems; Quality Reporting Programs; Payment for Intensive Outpatient Services in Hospital Outpatient Departments, Community Mental Health Centers, Rural Health Clinics, Federally Qualified Health Centers, and Opioid Treatment Programs; Hospital Price Transparency; Changes to Community Mental Health Centers Conditions of Participation, Changes to the Inpatient Prospective Payment System Medicare Code Editor; Rural Emergency Hospital Conditions of Participation Technical Correction rule states that OMB deemed this rule economically significant under E.O. 12866:

    “

    Based on our estimates, OMB's Office of Information and Regulatory Affairs has determined this rulemaking is significant per section 3(f)(1) as measured by the $200 million or more in any 1 year, and hence also a major rule under Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (also known as the Congressional Review Act).[2]

    		”

    Text of the rule

    The full text of the rule is available below:[1]

    See also

    External links

    Footnotes

    1. ↑ 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 “Federal Register,” “Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems; Quality Reporting Programs; Payment for Intensive Outpatient Services in Hospital Outpatient Departments, Community Mental Health Centers, Rural Health Clinics, Federally Qualified Health Centers, and Opioid Treatment Programs; Hospital Price Transparency; Changes to Community Mental Health Centers Conditions of Participation, Changes to the Inpatient Prospective Payment System Medicare Code Editor; Rural Emergency Hospital Conditions of Participation Technical Correction,” November 22, 2023
    2. ↑ 2.0 2.1 2.2 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
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