Key Takeaways from Proposed Rules – CY 2024 Medicare Hospital OPPS and ASC Payment System; Medicare Physician Fee Schedule

In addition to proposing lump sum payments for 340B hospitals and finalizing an implementation date for “Exact Match” requirements, CMS also released the following proposed rules: CY 2024 Medicare Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC); and CY 2024 Medicare Physician Fee Schedule (MPFS).

Below is a summary of the key provisions.  Comments on the proposed rules are due to CMS by September 11, 2023.

OPPS and ASC

  1. OPPS and ASC Payment Rates

CMS is proposing a 2.8% increase to OPPS payment rates for hospitals meeting quality reporting requirements.  CMS calculated the updated increase based on the projected hospital market basket percentage increase of 3.0%, with a 0.2% reduction to incorporate the productivity adjustment.

CMS is also proposing a 2.8% increase for ASC payment rates for ASCs meeting quality reporting requirements.

  1. OPPS Payment for Drugs Acquired Through the 340B Program

In addition to the proposed remedy for payment for 340B acquired drugs for CYs 2018 to 2022, CMS proposed continued payment of the statutory default rate (ASP + 6%) for 340B acquired drugs and biologicals.  The payment for 340B acquired drugs and biologicals would not differ from the payment rate for drugs and biologicals not acquired through the 340B program.

  1. Intensive Outpatient Program

CMS is proposing to establish the Intensive Outpatient Program (IOP) under Medicare pursuant to the Consolidated Appropriations Act, 2023. Under the proposed rule, an IOP will consist of psychiatric services for individuals with an acute mental illness or substance use disorder.  To offer services under an IOP program, generally, a physician will need to certify, on at least a monthly basis, that the patient requires a minimum of nine hours of IOP services per week. Under the proposed rule, IOP services may be furnished in hospital outpatient departments, Community Mental Health Centers (CMHCs), Federally Qualified Health Centers (FQHCs), and Rural Health Clinics (RHCs).

IOP services will include a specified group of behavioral health services paid on a per diem basis under the OPPS or other applicable payment system.  CMS is proposing to base the per diem costs of items and services included in an IOP on rates paid for by Medicare either as part of the Partial Hospitalization Program (PHP) benefit or under the OPPS.

  1. Partial Hospitalization Program

PHPs furnished in hospital outpatient departments and CMHCs are intensive, structured outpatient programs provided as an alternative to psychiatric hospitalization.  They include mental health services paid on a per diem basis under the OPPS, based on PHP per diem costs.  CMS is proposing to add two PHP APCs – one for days with 3 services per day and one for days with 4 or more services per day.  In addition, hospital-based and CMHC payment rates for the new APCs will be based on cost per day using a broader OPPS data that includes PHP and non-PHP days.

CMS also clarified that Medicare covers PHP for the treatment of Substance Use Disorder (SUD), and CMS considers services that are for the treatment of SUD and behavioral health generally to be consistent with the statutory and regulatory definitions of PHP services.

  1. Changes to Community Mental Health Centers Conditions of Participation (CoPs)

The Consolidated Appropriations Act, 2023 established coverage of IOP in CMHCs, and a new Medicare benefit category for services furnished and directly billed by Mental Health Counselors (MHCs) and Marriage and Family Therapists (MFTs).  CMS now is proposing to modify the CMHC CoPs to include IOP services, revise personnel qualifications of MHCs, and add personnel qualifications of MFTs.

  1. OPPS Payment for Remote Mental Health Services

CMS is proposing creation of a new untimed code describing group psychotherapy. CMS is also proposing to postpone implementation of any in-person visit requirements until the end of CY 2024.

  1. OPPS and ASC Payment for Dental Services

CMS is proposing further alignment of dental payment provisions between the MPFS and the OPPS for consistency. Accordingly, CMS proposes to assign 229 HCPCS codes describing dental services to various clinical APCs. This would further allow patient access to dental services performed in the hospital outpatient setting.

CMS is also proposing to add 26 separately payable dental surgical procedures to the ASC Covered Procedures List (CPL) and 78 ancillary dental services to the list of covered ancillary services.

  1. Hospital Price Transparency and the No Surprises Act

CMS is proposing to modify the standard charge display requirements at 45 CFR 180.50 and the enforcement provisions at 45 CFR 180.70.  This would involve, among other proposals, providers posting standard charges data using CMS templates and encoding of all standard charge information.  

  1. Rural Emergency Hospitals (REH) — Payment for Indian Health Service (IHS) and Tribal Facilities

Last year, CMS finalized regulations establishing the REH provider type. CMS is proposing that IHS-REHs that convert to REHs be paid for hospital outpatient services under the same rate (applicable All-Inclusive Rate or “AIR”) that would otherwise apply if these services were performed by an IHS or tribal hospital.  CMS is also proposing that IHS-REHs would receive the REH monthly facility payment consistent with how this payment is made to REHs that are not tribally or IHS operated.

  1. Hospital Outpatient/ASC/REH Quality Reporting Programs

CMS is proposing various changes to and requesting comments on the Hospital Outpatient Quality Reporting (OQR), Ambulatory Surgical Center Quality Reporting (ASCQR), and Rural Emergency Hospital Quality Reporting (REHQR) Programs.

MFPS

  1. Ratesetting and Conversion Factor and MEI CY 2023 Updates

CMS proposes a $32.75 CY 2024 PFS conversion factor, which is a fixed amount used to convert relative value units for a service into PFS payments amounts. The proposed CY 2024 conversion factor of $32.75 is a 3.34%decrease ($1.14) from the current CY 2023 conversion factor of $33.89. This change reflects the end of the statutory payment increase for CY 2023 and a budget neutrality adjustment of negative 2.17%.

Overall payment rates under the PFS are proposed to be reduced by 1.25%in CY 2024 as compared to CY 2023.

  1. Evaluation and Management (E/M) Visits

CMS proposes to implement a separate add-on payment for healthcare common procedure coding system (HCPCS) code G2211 on January 1, 2024.  CMS seeks to better recognize the costs clinicians may incur for primary care and longitudinal care of complex patients.

For split or shared E/M visits, CMS proposes to delay implementation of the policy to define “substantive portion” for split shared visits based on the amount of time spent by the billing practitioner.

  1. Telehealth

In addition to coverage and payment of telehealth services included on the Medicare Telehealth Services List (as of March 15, 2020) until December 31, 2024, CMS proposes to implement the following provisions of the Consolidated Appropriations Act, 2023 (CAA):

  • Temporary expansion of the scope of telehealth originating sites for services furnished via telehealth to include any site in the United States where the beneficiary is located at the time of the telehealth service, including an individual’s home
  • Including qualified occupational therapists, qualified physical therapists, qualified speech-language pathologists, and qualified audiologists in the definition of “telehealth practitioners”
  • Continuing to pay for telehealth services furnished by Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) based on the payment method used during the PHE
  • Delaying the requirement for an in-person visit with the physician or practitioner within six months prior to initiating mental health telehealth services

CMS proposes that telehealth services provided to patients in their homes be paid at the non-facility PFS rate, in alignment with flexibilities extended via the CAA. CMS is proposing to continue allowing institutional providers to bill for outpatient therapy, DSMT, and MNT services until the end of CY 2024.

CMS is proposing to allow teaching physicians to use audio/video real-time communications technology when the resident furnishes Medicare telehealth services in all residency training locations through the end of CY 2024. CMS is seeking comments on other clinical treatment situations where it may be appropriate to allow the virtual presence of the teaching physician and could consider finalizing these in the CY 2024 PFS final rule.

CMS proposes to continue defining “direct supervision” to permit the presence and immediate availability of the supervising practitioner through real-time audio and video interactive telecommunications through December 31, 2024, which aligns more directly with other PHE-related telehealth policies. CMS is seeking comment from interested parties on potential patient safety or quality concerns when direct supervision occurs virtually.

Medicare Telehealth Services List

CMS proposes to add Social Determinants of Health Risk Assessments to the Medicare Telehealth Services List on a permanent basis and health and well-being coaching services to the Medicare Telehealth Services List on a temporary basis.

  1. Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs)

CMS proposes the following updates for RHCs and FQHCs:

  • Requiring general supervision, rather than direct supervision, for behavioral health services furnished “incident to” a physician or NPP’s services in RHCs and FQHCs
  • Including remote physiologic monitoring, remote therapeutic monitoring, Community Health Integration (CHI), and Principal Illness Navigation (PIN) services in HCPCS code G0511 when furnished by RHCs and FQHCs
  • Expanding the billable services under HCPCS code G0511 to include RPM, RTM, CHI, and PIN so that payment for general care management is more appropriate
  • Applying the definitions established for marriage and family therapists (MFTs) and mental health counselors (MHCs) under the PFS to RHCs and FQHCs, allowing HCS to enroll with Medicare as MHCs

The OPPS proposed rule describes Medicare coverage and payment updates for intensive outpatient program (IOP) services furnished by an RHC or FQHC.

  1. Services Addressing Health-Related Social Needs

CMS proposes to pay separately for Community Health Integration (CHI), Social Determinants of Health (SDOH) Risk Assessment, and Principal Illness Navigation (PIN) services to better account for resources involved in furnishing patient-centered care.

CMS is proposing that a billing practitioner may arrange to have CHI services provided by third-party auxiliary personnel who are under contract with the billing provider (such as through a community-based organizations) if all of the “incident to” and other requirements and conditions for payment of CHI services are met. CMS proposes to limit billing for CHI services to only one practitioner per calendar month and to exclude services to patients under a home health plan of care from billable CHI services.

To recognize time spent by practitioners and resources used that may impact treatment ability, CMS also proposes a new stand-alone G code, GXXX5: Administration of a standardized, evidence-based Social Determinants of Health Risk Assessment, 5-15 minutes, not more often than every 6 months. CMS is proposing to add the SDOH risk assessment to the annual wellness visit as an optional, additional element with an additional payment.

  1. Behavioral Health and Substance Abuse Treatments

Behavioral Health

CMS is proposing that that the two new G-codes describing psychotherapy for crisis services—GPFC1 and GPFC2—be billed at 150% of existing rates for 90839/40 when the services are furnished in any non-facility place of service other than the physician’s office setting.

In addition to allowing MFTs and MHCs to enroll in Medicare, CMS is proposing to allow integral behavioral health care as part of primary care settings. CMS is also proposing to expand the range of practitioners that may bill for Health Behavior Assessment and Intervention (HBAI) services to include MFTs, MHCs, clinical social workers, and clinical psychologists.

Opioid Treatment Programs (OTPs)

CMS proposes to extend the current flexibilities allowing OTPs to bill Medicare for furnishing periodic assessments via audio-only telecommunications (when permitted by SAMHSA and DEA) when video is not available to the beneficiary.

  1. Medicare and Medicaid Provider and Supplier Enrollment

Key proposals from CMS regarding Medicare provider supplier enrollment are as follows:

  • Updates to its authority to deny and revoke Medicare enrollments based on civil judgements, misdemeanors, and “failure to pay debt”
  • New revocation grounds to 42 C.F.R. 424.535 that would result in providers not receiving payment for services rendered while non-compliant with enrollment requirements
  • New provider enrollment status, “stay of enrollment”: an interim status with a pause in the enrollment during which the provider would still remain enrolled in Medicare
  • Clarifying that a change of practice location includes adding a new location or deleting an existing one for the purposes of DMEPOS suppliers, IDTFs, physicians, nonphysician practitioners, and physician and nonphysician practitioner organizations
  • Clarifying definitions of “indirect ownership” and ”supplier” at 42 C.F.R. 424.502

Among other proposals related to Medicaid provider enrollment, CMS proposed clarifications to the length of time for which a Medicaid provider will remain in the Medicaid termination database (10+ years) and predicating a termination request/denial on inclusion on the termination database.

  1. Other Impactful Updates
  • Medicare Part B Payment for Preventive Vaccine Administration Services: CMS proposes to maintain additional payment for the administration of a COVID-19 vaccine in the home and extending this to the administration of pneumococcal, influenza, and hepatitis B vaccines.
  • Clinical Laboratory Fee Schedule: CMS proposes to specify that the data reporting period of January 1, 2024, through March 31, 2024, the data collection period is January 1, 2019, through June 30, 2019. CMS also proposes that for CY 2023, payment for applicable clinical diagnostic laboratory tests may not be reduced compared to the payment amount established for that test in CY 2022, and for CYs 2024-2026, payment may not be reduced by more than 15% as compared to the payment amount established for that test for the preceding year.
  • Dental and Oral Health Services: CMS proposes to codify the payment policy for dental services prior to, or during, head and neck cancer treatments and permit payment for certain dental services inextricably linked to other covered services used to treat cancer.
  • Caregiver Training Services: CMS proposes to pay for practitioners training and involving caregivers to support patients with certain illnesses or diseases (e.g. dementia) when these services are furnished by a physician, non-physician practitioner, therapist under a treatment plan. This proposal aligns with the Biden-Harris Administration Executive Order on Increasing Access to High Quality Care and Supporting Caregivers.
  • Quality Payment Program (QPP) and the Medicare Shared Savings Program (MSSP): CMS proposes five new optional Merit-based Incentive Payment System (MIPS) value pathways for reporting: Women’s Health; Infectious Disease, Including Hepatitis C and HIV; Mental Health and Substance Use Disorder; Quality Care for Ear, Nose, and Throat (ENT); and Rehabilitative Support for Musculoskeletal Care.
    • CMS is also proposing an increase in the quality data completeness threshold and the performance threshold score (82 points) that MIPS participants must achieve to see positive payment adjustments.
  • Supervision Policy for Physical (PT) and Occupational Therapists (OT) in Private Practice: CMS proposes to allow for general supervision by PTS and OTs in private practice for remote therapeutic monitoring (RTM) services. CMS is also seeking comments on whether to revise the current direct supervision policy to general supervision policy for all services, not just RTM.

For any questions regarding the proposed rules summarized above, impact on providers, or any other health care regulatory and/or operational matters, please contact Advis or call 708.478.7030.

Published: July 18, 2023