CY22 OPPS, ASC Payment System, MPFS, and Home Health PPS Final Rules

On November 2, 2021, CMS released its CY 2022 Hospital Outpatient Prospective Payment System (“OPPS”) and Ambulatory Surgical Center Payment System  (“ASC”), Outpatient Physician Fee Schedule (“PFS”), and Home Health Prospective Payment System (“PPS”) final rules. Additionally, the Biden-Harris Administration issued an emergency regulation requiring COVID-19 vaccination for health care workers.  Recently, Congress also proposed legislation that would allow for Medicare to negotiate prices for certain prescription drugs. Below is a summary of these recent developments affecting health care providers.

Outpatient Physician Fee Schedule Rule

  1. CY 2022 PFS Rate-setting and Conversion Factor:

The CY 2022 PFS conversion factor is $33.59, a decrease of $1.30 from the CY 2021 PFS conversion factor of $34.89.

  1. Split (or shared) Evaluation and Management (“E/M”) visits:

E/M visits provided in the facility setting by a physician and/or non-physician practitioner (“NPP”) will be billed by whichever individual provides the substantive portion of the visit, with the service being reimbursed at the lower NPP rate if the substantive portion of the visit was provided by the NPP. A modifier will be required to identify split/share E/M visits. Critical care services may now also be furnished as split (or shared) visits.

  1. Critical Care Services:

Critical care services may be paid on the same day as other E/M visits by the same practitioner or another practitioner in the same group of the same specialty, if the E/M visit was provided prior to the critical care service at a time when the patient did not require critical care, the visit was medically necessary, and the services are separate and distinct, with no duplicative elements from the critical care service provided later in the day. Critical care services may also now be paid in addition to a procedure with a global surgical period if the critical care is unrelated to the surgical procedure.

  1. Telehealth:

CMS is extending coverage through CYE 2023 for telehealth services that have been temporarily added throughout the Public Health Emergency (PHE). Previously, payment for these services would have expired with the end of the PHE. CMS will continue to examine utilization data on these services to determine whether to add them permanently.

CMS will also now allow telehealth services to be provided via audio-only communications technology for the diagnosis, evaluation, or treatment of mental health disorders furnished to established patients in their homes. The practitioner must still maintain two-way audio/video communication capability, but if the beneficiary cannot or will not use two-way audio/video technology, audio-only communications will be allowed. An in-person, non-telehealth mental health visit must be furnished at least every 12 months, with exceptions based on beneficiary circumstances.

In addition, Medicare will now reimburse mental health visits furnished by RHCs and FQHCs, including audio-only telephone calls, expanding access for rural and other vulnerable populations. This will continue after the expiration of the PHE.

  1. Therapy Services:

For dates of service on and after January 1, 2022, payment will be made at 85 percent of the otherwise applicable Part B payment amount for physical therapy and occupational therapy services furnished in whole or in part by physical therapist assistants (“PTAs”) and occupational therapy assistants (“OTAs”). CMS will apply a de minimis threshold to determine when therapy service will be reimbursed at the reduced rate. The de minimis standard will be revised to allow full reimbursement for certain services provided in part by a PTA or OTA.

  1. Billing for Physician Assistant (“PA”) Services:

Beginning January 1, 2022 Medicare will make direct payment to PAs for professional services that they furnish under Part B.

  1. Vaccine Administration Services:

CMS will maintain the payment rate of $40 per dose for COVID-19 vaccines ($35.50 if administered in the home). Beginning January 1 of the year following the end of the COVID-19 public health emergency (“PHE”), the payment rate for COVID-19 vaccine administration will be aligned with other Part B preventative vaccines. Reimbursement for administration of COVID-19 monoclonal antibody products will also be brought in line with administration of other complex biological products starting January 1 of the year following the year in which the PHE ends.

Hospital Outpatient Prospective Payment System Rule

  1. Price Transparency of Hospital Standard Charges:

CMS is increasing Civil Monetary Penalties (“CMP”) for hospitals that fail to comply with price transparency requirements – hospitals with 30 or fewer beds face a minimum CMP of $300/day, and hospitals with more than 30 beds face a CMP of $10/bed/day (not to exceed $5,500/day), resulting in total CMPs of $109,500-$2,007,500 for a full year of noncompliance.

In an effort to reduce barriers to access to machine-readable files, CMS will now also require that the machine-readable file be accessible to automated searches and direct downloads.

  1. OPPS and ASC payment rates:

The CY 2022 OPPS payment rates for hospitals and ASCs that meet applicable quality reporting requirements is being increased by 2 percent.

  1. Inpatient Only (“IPO”) List:

After announcing its intention to eliminate the IPO list over the course of three calendar years in its CY 2021 Final Rule, CMS has reversed course. The elimination of the IPO list will no longer take place and those services removed in 2021 will be added back to the IPO list (with the exception of three CPT codes and their corresponding anesthesia codes : 22630 (lumbar spine fusion), 23472 (reconstruct shoulder joint) and 27702 (reconstruct ankle joint).

  1. ASC Covered Procedures List:

In the CY 2021 OPPS/ASC final rule, CMS revised its criteria used to add surgical procedures to the ASC CPL.  Using the revised criteria, it added 267 surgical procedures to the ASC CPL in CY 2021.  In the CY 2022 OPPS/ASC proposed rule, CMS proposed to reinstate its historical criteria and, in turn, remove 258 of the 267 procedures that were added to the CPL in CY 2021.  CMS is now reinstating the criteria for adding procedures to the ASC CPL that were in place in CY 2020.  For CY 2022, CMS is removing 255 surgical procedures from the ASC CPL.

  1. 340B Drug Payments:

CMS will continue the payment rate of the average sale price minus 22.5 percent for drugs or biologicals acquired through the 340B Program. Rural sole community hospitals, children’s hospitals, and PPS-exempt cancer hospitals continue to be excepted from this policy.

  1. Payment for Non-Opioid Pain Management Drugs and Biologicals:

CMS will provide for 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.

  1. Hospital Outpatient/ASC Quality Reporting Programs:

Among other changes to reporting requirements for hospitals and ASCs, CMS has added the COVID-19 vaccination rate of health care personnel as a required reporting measurement.

Home Health Prospective Payment System Final Rule

  1. Home Health Value-Based Purchasing (HHVBP) Model Expansion:

CMS is expanding the HHVBP Model nationwide from the 9 states in which the model is currently utilized. The first performance year of the HHVBP model will be CY 2023.

  1. Payment Updates for Home Health Agencies:

Medicare payments to HHAs in CY 2022 will increase by 2.6 percent.

  1. Payment Updates for Home Infusion Services:

CMS expects an increase of 5.1 percent in payments to home infusion therapy suppliers.

  1. Home Health CoPs:

Occupational therapists (“OT”) are now permitted to conduct the initial home health assessment visit and complete the comprehensive assessment under the Medicare program. For OTs to conduct the assessment, occupational therapy must be on the home health plan of care with physical/speech therapy, and skilled nursing services must not initially be on the plan of care.

  1. Survey and Enforcement Requirements for Hospice Programs:

The hospice program survey process will now: require use of multidisciplinary survey teams, prohibit surveyor conflicts of interest, expand CMS-based surveyor training to accrediting organizations (“AOs”), require AOs to begin using the Form CMS-2567, require state survey agencies to establish a hospice program complaint hotline, and include enforcement remedies that may be imposed instead of, or in addition to, termination of participation in the Medicare program for noncompliant hospice programs.

Emergency Regulation Requiring COVID-19 Vaccination for Health Care Workers

  1. The Biden-Harris Administration is requiring COVID-19 vaccination of eligible staff at health care facilities that participate in the Medicare and Medicaid programs, as follows:
  • All facilities participating in Medicare/Medicaid must develop a plan for staff to receive the first dose of a COVID-19 vaccine by December 5, 2021, and be fully vaccinated by January 4, 2022.
  • Booster vaccine doses are not yet required.
  • Staff who have previously had COVID-19 still must be vaccinated.
  • Staff members who provide direct patient care on- or off-site, or who are on-site at a covered facility full or part time, or who could potentially interact with individuals who provide direct patient care, must be vaccinated.
  • Physician offices are not considered facilities, and are not required to independently comply. However, covered facilities such as hospitals and ASCs, must ensure that any physicians admitting or treating patients in-person within their facilities are vaccinated.
  • Exemptions are provided for recognized medical conditions or religious beliefs – facilities must develop a plan for permitting these allowed exemptions. The rule also does not apply to full-time teleworkers.
  • Staff members that fail to meet these deadlines must cease to continue providing any care, treatment or other services until their vaccination status is compliant with the regulation.
  • If these requirements are not met, providers will be cited by a surveyor as being non-compliant and have an opportunity to return to compliance before additional actions occur.
  • Penalties for non-compliance may include Civil Monetary Penalties, denials of payment, and even termination from Medicare/Medicaid participation.

Proposed Legislation for Medicare Negotiation of Prescription Drug Prices

  1. Democratic lawmakers have reached a tentative agreement on legislation allowing Medicare to negotiate the prices of certain prescription drugs:
  • The proposed legislation would allow Medicare to negotiate the prices for prescription drugs that are older than 9 or 12 years, depending on the type of drug.
  • Drug makers would also be restricted as to the amount that they may raise drug prices in relation to the rate of inflation: they will face penalties for exceeding these allowable rate increases. This restriction applies to charges to Medicare as well as private payers.
  • The legislation would cap out-of-pocket spending for seniors at $2,000 per year, instead of the current policy limiting patients’ out-of-pocket liability to 5% of their total drug costs after reaching the current $6,500 out-of-pocket threshold.
  • The legislation would also cap insulin prices at $35 per month.

For any questions regarding the above legislation/rulemaking, or for organizational assistance with any other healthcare regulatory or operational matter, please contact an Advis expert or call 708.478.7030.

Published: November 10, 2021