On July 13, the Centers for Medicare & Medicaid Services (CMS) released the calendar year (CY) 2024 Outpatient Prospective Payment System (OPPS) proposed rule. The OPPS is the Medicare payment system that reimburses the hospital itself for hospital outpatient services. While physicians and other practitioners are expected to see a cut to their Medicare payments in CY 2024 under the Physician Fee Schedule, hospitals under the OPPS are projected to receive a 2.8% increase next year.
Payment Rate Update
In the Proposed Rule, CMS proposes to update the OPPS conversion factor by 2.8 percent, which includes a market basket increase of 3.0 percent and a productivity adjustment of negative 0.2 percent. CMS also proposes applying the 2.8 percent update to ASC payments in CY 2024 as it did in the five preceding years in order to gather additional claims data to analyze whether this adjustment tends to influence migration of services from the hospital to the ASC setting.
Hospital Price Transparency Updates
Under the hospital price transparency regulations, a hospital must make public its standard charges for all items and services it provides in a comprehensive machine-readable file, among other requirements. Hospitals currently have discretion in how they choose to display the standard charges in the machine-readable file; however, CMS now proposes to require hospitals to display the required data using a CMS template, which would be offered as a CSV “wide” format, a CSV “tall” format, and a JSON schema. CMS also proposes that hospitals encode all standard charge information, as applicable, that corresponds to a set of required data elements, which would include:
- Hospital name, license number, location name(s), and address(es) at which the public may obtain the items and services at the standard charge amount.
- A description of the item or service that corresponds to the standard charge established by the hospital, including a general description; whether the item or service is provided in connection with an inpatient admission or an outpatient department visit; and for drugs, the drug unit and type of measurement.
- Any codes used by the hospital for purposes of accounting or billing for the item or service, including modifier(s) and code type(s).
- For payer-specific negotiated charges: the payer and plan name (as specified in the contract); the type of contracting method used to establish the standard charge; whether the standard charge indicated should be interpreted by the user as a dollar amount, or if the standard charge is based on a percentage or algorithm, and what percentage or algorithm determines the dollar amount for the item or service. If the standard charge for an item or service is expressed as a percentage or algorithm, the hospital would be required to indicate a consumer-friendly expected allowed amount in dollars for the item or service.
Each hospital would also be required to affirm in its machine-readable file that the hospital, to the best of its knowledge and belief, has included all applicable standard charge information and that the information displayed is true, accurate, and complete as of the date indicated in the file. CMS also proposes hospitals include a footer at the bottom of the hospital’s homepage that links to the webpage that includes the machine-readable file and requires hospitals to ensure that a .txt file is included in the root folder of the publicly available website chosen by the hospital for posting its machine-readable file.
CMS proposes several updates to its enforcement capabilities including:
- CMS may require submission of certification by an authorized hospital official as to the accuracy and completeness of the data in the machine-readable file and submission of additional documentation as may be necessary to determine hospital compliance.
- If a hospital receives a warning notice for non-compliance, CMS proposes to require the hospital to submit an acknowledgement of receipt of the warning notice in the form and manner and by the deadline specified in the notice of violation issued by CMS to the hospital.
- In the event CMS takes an action to address hospital noncompliance and the hospital is determined by CMS to be part of a health system, CMS may notify health system leadership of the action and may work with health system leadership to address similar deficiencies for hospitals across the health system.
- CMS may publicize on the CMS website information related to: (1) CMS’s assessment of a hospital’s compliance; (2) any compliance action taken against a hospital, the status of such compliance action, and the outcome of such compliance action; and (3) notifications sent to health system leadership.
CMS also issued a request for information on evolving and aligning hospital price transparency with transparency in coverage rules and the No Surprises Act regulations.
340B Payment
CMS proposes to continue to pay the statutory default rate, ASP plus 6 percent, for 340B-acquired drugs and biologicals. CMS applied this same rate in the CY 2023 final rule following the U.S. Supreme Court’s unanimous decision holding that CMS could not vary rates between different groups of hospitals without previously conducting a survey of the hospitals’ acquisition costs.
CMS also proposes to use a single modifier to identify drugs and biologicals acquired through the 340B program. All 340B covered entity hospitals paid under the OPPS would be required to report the “TB” modifier effective Jan. 1, 2025.
Site Neutrality
CMS proposes to continue its reimbursement policy for clinic visits delivered in off-campus provider-based outpatient departments at 40% of the OPPS payment rate. However, CMS proposes to increase payments for intensive cardiac rehabilitation services, allowing those services provided by off-campus provider-based outpatient departments to be paid at 100% of the OPPS rate. CMS seeks comments on whether there are other services for which the OPPS and PFS rates are the same such that their payments should similarly be increased when they are furnished in an off-campus provider-based department. This request suggests that CMS recognizes that its across-the-board site-neutral policy for clinic visits may have yielded some incongruous results.