CMS dramatically increases financial penalties for noncompliance with hospital price transparency rules.
On Nov. 2, 2021, the Centers for Medicare & Medicaid Services (CMS) released the calendar year (CY) 2022 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System final rule, finalizing payment rates and policy changes affecting Medicare services furnished in hospital outpatient and ASC settings for CY 2022.
Among the notable changes, the rule halts the elimination of the Inpatient Only (IPO) list, increases 2022 payment rates by 2 percent, and raises the civil monetary penalties (CMPs) for noncompliance with price transparency requirements for hospital standard charges based on bed count. Let’s take a closer look at some of the final rule’s major provisions, which will take effect Jan. 1, 2022, unless otherwise indicated.
Key Takeaways From 2022 OPPS/ASC Final Rule
The final rule increases CY 2022 payment rates for hospitals that meet applicable quality reporting requirements by a factor of 2 percent. This update is based on the projected hospital market basket increase of 2.7 percent, reduced by 0.7 percentage points for the productivity adjustment. Notably, hospitals and ASCs that fail to meet their respective quality reporting program requirements will be subject to a 2 percent reduction.
Based on the finalized policies, CMS estimates that total payments to OPPS and ASC providers (including beneficiary cost-sharing and estimated changes in enrollment, utilization, and case-mix) for CY 2022 will be approximately $82.078 billion and $5.41 billion, respectively, for an increase of approximately $5.9 billion and $40 million, respectively, from CY 2021 program payments.
Ratesetting Using CY 2019 Claims Data
Due to several COVID-19 public health emergency-related factors, CMS believes that the CY 2020 data are not the best overall approximation of expected outpatient hospital services in CY 2022. Therefore, it will use CY 2019 data to set the CY 2022 OPPS and the ASC payment system rates.
Hospital Price Transparency
To increase compliance, the 2022 OPPS final rule is modifying the hospital price transparency regulation as follows:
Despite pushback, CMS is increasing the potential size of CMPs it may impose on a hospital for noncompliance. Beginning 1 Jan. 2022, the new penalties are as follows (all amounts are per hospital):
Minimum penalty for full year of noncompliance: $109,500
Maximum penalty for full year of noncompliance: $2,007,500
Daily penalty – hospitals with bed counts greater than 30: $10 per bed
Maximum daily penalty – hospitals with bed counts greater than 30: $5,500
Maximum daily penalty – hospitals with bed counts less than 30: $300
CMS is revising the price transparency rules so that state forensic hospitals that exclusively treat individuals in the custody of penal authorities will be deemed compliant.
The new final rule also includes updates to the requirements for hospitals to make their machine-readable files accessible to automated searches and direct downloads.
Inpatient Only List
CMS is reversing course on the elimination of the IPO list, explaining that more time is required to evaluate the implications for each service, particularly on patient safety. In the OPPS final rule, the agency finalizes, with modification, its proposal to:
Halt the elimination of the IPO list;
Codify in regulation five longstanding criteria for determining whether a service or procedure should be removed from the IPO list; and
Add back to the IPO list 293 of the 298 services removed in CY 2021. Ultimately, CMS determined that five services met several of the criteria for removal: CPT® codes 22630 (lumbar spine fusion), 23472 (reconstruct shoulder joint), 27702 (reconstruct ankle joint), and their corresponding anesthesia codes.
As a result, CMS is amending the implementation regulation to remove the reference to the elimination of the list — a huge win for hospitals that would have seen lower payments as a result of this policy.
The rule also exempts procedures removed from the IPO list on or after Jan. 1, 2022, from site-of-service claim denials, Beneficiary and Family-Centered Care Quality Improvement Organization (BFCC–QIO) referrals to Recovery Audit Contractor (RAC) for persistent noncompliance with the Two-Midnight rule, and RAC reviews for ‘‘patient status’’ (that is, site-of-service) for a period of two years.
ASC Covered Procedures List
The final rule reinstates patient safety criteria for adding a procedure to the ASC Covered Procedures List (ASC CPL) that were in place in CY 2020 and removes from the ASC CPL 255 of the 267 procedures added in CY 2021.
CMS is also adopting a new nomination process that, starting March 2022, will allow an external party to nominate a surgical procedure to be added to the ASC CPL in the next applicable rulemaking cycle. CMS will provide subregulatory guidance on the nomination process in early 2022. If the agency determines that a surgical procedure meets the requirements for addition to the ASC CPL, it would propose to add it to the ASC CPL for Jan. 1, 2023.
CMS is maintaining the payment rate of average sales price minus 22.5 percent for certain separately payable drugs or biologics acquired through the 340B Drug Pricing Program. Under the new final rule, rural sole community hospitals, children’s hospitals, and PPS-exempt cancer hospitals will continue to be exempt from this policy.
Payment for Non-opioid Products
For CY 2022, CMS is modifying its current policy to provide separate payment for non-opioid pain management drugs and biologicals that function as surgical supplies in the ASC setting when those products meet certain criteria. The product must be Food and Drug Administration (FDA) approved, FDA indicated for pain management or as an analgesic, and have a per-day cost above the OPPS drug packaging threshold.
Beneficiary Coinsurance for Colorectal Cancer Screening Tests
Flexible sigmoidoscopies and colonoscopies are considered as screening per the final rule, regardless of whether tissue or other matter is removed during the screening test. Beginning Jan. 1, 2022, all surgical services furnished on the same date as the planned screening endoscopy could be viewed as being furnished in connection with, as a result of, and in the same clinical encounter as the screening test for purposes of determining the coinsurance.
Hospital Outpatient Quality Reporting (OQR) Program
To further meaningful measurement and reporting for quality of care in the outpatient setting, CMS finalized several proposals. In the CY 2022 OPPS/ASC final rule, the agency is
Adopting three new measures, including COVID-19 vaccination of healthcare personnel;
Making the reporting of two voluntary or suspended measures mandatory;
Removing two measures; and
Updating the validation policies of the Hospital OQR Program to reduce provider burden and improve processes.
Ambulatory Surgical Center Quality Reporting (ASCQR) Program
The ASCQR Program is a pay-for-reporting quality program for the ASC setting. The 2022 OPPS/ASC final rule finalizes proposals to:
Adopt COVID-19 vaccination of healthcare personnel.
Make the reporting of six voluntary or suspended measures mandatory.
The American Hospital Association Weighs In
“Today’s final Medicare outpatient rule contains a number of important policies that will help hospitals and health systems better provide care. We are pleased that CMS recognized the unique role that hospital outpatient departments play in caring for patients by rolling back two problematic policies it put forth last year,” said Stacey Hughes, executive vice president of the American Hospital Association. “However, we remain disappointed that CMS will continue deep payment cuts to 340B hospitals, which threatens their ability to care for their patients and communities and goes against Congress’ intent in establishing the 340B program nearly 30 years ago.”