The Centers for Medicare & Medicaid Services (CMS) has finalized Medicare hospital outpatient prospective payment system (OPPS) and ambulatory surgical center (ASC) payment system rates and policies for 2020.  The final rule provided a 2.6% update to both OPPS and ASC rates for 2020 for facilities meeting quality reporting requirements (compared to an anticipated 2.7% update under the proposed rule).  Note that payment changes for individual procedures vary.  CMS estimated that total payments to OPPS providers will increase by approximately $6.3 billion and payments to ASCs will increase by about $230 million compared to estimated 2019 payments.

While CMS included in the OPPS proposed rule a controversial proposal to require all hospitals to disclose payer-specific pricing, including “consumer-friendly” information for hundreds of “shoppable” services, the agency finalized these policies (with modifications) in a separate final rule 

Hospital Outpatient Provisions

Major OPPS policies adopted in the final rule include the following:

  • CMS adopted an alternative pathway for OPPS device pass-through payment status for “transformative” devices with Food and Drug Administration Breakthrough Device designation. CMS did not adopt changes to the OPPS substantial clinical improvement (SCI) criterion, as it had for the related inpatient prospective payment system SCI standard.
  • CMS removed total hip arthroplasty and six spine procedures (and associated anesthesia administration) from the inpatient only (IPO) list; these procedures may be performed in the outpatient hospital setting beginning in 2020. CMS finalized a policy to exempt procedures removed from the IPO list from Recovery Audit Contractor referrals and certain other medical review activities for two years (rather than one year as proposed).
  • The final rule increased the per-day cost threshold for separate payment for certain outpatient drugs to $130, up from $125 in 2019. CMS also discussed options for pricing certain drugs purchased through the 340B program in light of pending litigation challenging the average sales price minus 22.5% payment policy adopted in the final 2018 OPPS rule.
  • CMS completed the two-year phase of a policy it adopted in the 2019 final OPPS rule to reduce payment for certain clinical visit services provided by excepted off-campus provider based departments. CMS acknowledged that the policy for 2019 was vacated by a US District Court; the Administration is considering whether to appeal.
  • The final rule created 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 did not adopt reforms to its payment policy for packaged skin substitutes for 2020, as it had contemplated in the proposed rule.
  • CMS established a prior authorization process for five services that are “often cosmetic”:  blepharoplasty, botulinum toxin injections, panniculectomy, rhinoplasty, and vein ablation.
  • CMS lowered the required level of supervision for hospital outpatient therapeutic services from direct supervision to general supervision.
  • CMS adopted various updates to Hospital Outpatient Quality Reporting Program requirements.

 ASC Provisions

  • The final rule adds several procedures to the ASC list of covered surgical procedures, including total knee arthroplasty.
  • CMS adopted a policy to limit the ASC payment rate for low-volume, device intensive procedures to the procedure’s OPPS payment rate.
  • CMS updated various ASC Quality Reporting Program requirements.