Key Points from CMS CY 2020 OPPS and MPFS Proposed Rules

On July 29, the Centers for Medicare & Medicaid Services (“CMS”) issued its proposed rules for the CY 2020 Outpatient Prospective Payment System (“OPPS”) and Medicare Physician Fee Schedule (“MPFS”). While there are some rate increases and positive changes proposed, the rule requiring hospitals to disclose and display negotiated charges seems to be the most disruptive. Please note that these changes are merely proposed and have not yet been finalized. Advis will be monitoring this process closely and is available to assist with comment drafting and submission. Comments on these proposed rules must be submitted to CMS by September 27, 2019.

Key proposals include:


1.      Expansion of hospital charge display requirements to include charges and information based on negotiated rates for common shoppable items and services.

2.      Completing the two-year phase-in payment reductions for hospital off-campus provider-based department clinic visits billed with CPT G0463.

3.      Increasing OPPS and PFS payment rates.

4.     Requiring prior authorization requirement for certain outpatient procedures that are likely to be related to cosmetic surgical procedures not covered by Medicare. 

5.      Continuing to pay ASP-22.5% for 340B drugs.

6.   Adding procedures to the ASC Covered Procedures List.

7.      Reducing the minimum level of supervision required for hospital outpatient therapeutic services.


8.      Changes to reimbursement for evaluation and management services.

9.      Payment reductions for therapy services furnished by PTAs or OTAs.

10.  Changes in reimbursement for care management services.

11.   Medicare Part B benefits regarding medication-assisted treatment of opioid use disorder.

Key OPPS Proposed Changes

  1. Increase in Price Transparency Requirements
  • Over the last several years, a series of legislation and rulemaking has required hospitals to make public its standard charges for items and services provided.  CMS previously required hospitals to either make public a list of their charges or their policies for allowing the public to view a list of those charges in response to an inquiry.  Effective January 1, 2019, CMS required hospitals to post online a list of their standard charges in a machine-readable format.
  • CMS is now expanding its price transparency requirements and proposing that hospitals include “gross charges” as reflected on the hospital chargemaster, “payer-specific negotiated charges”, and charges for at least 300 common shoppable items and services.  Note that CMS does not clearly distinguish between the terms “charges” and “rates”, but rather uses these interchangeably throughout its commentary.  Typically, “rates” include negotiated per diems, discount percentages, etc., and are distinct from “charges”.  Providers should therefore request clarification from CMS regarding the agency’s interpretation of these terms, especially given that monetary penalties may be involved for instances of noncompliance as explained below.
  • The proposal includes the addition of a new part to the Code of Federal Regulations entitled “Hospital Price Transparency”.  In pertinent part, the proposal includes:
  • Definitions
    • This proposal is applicable to Hospitals.  This would include all Medicare-enrolled and non-Medicare enrolled hospitals, as well as any institutions that are operating as hospitals under State or local law yet might not be considered hospitals for purposes of Medicare participation This would not include ambulatory surgical centers (“ASCs”) or other non-hospital sites of care.
    • Hospitals must provide information on Standard Charges, which include:
      • Gross Charges – Those charges for an individual item or services that is reflected on the hospital’s chargemaster, absent any discounts.
      • Payer-Specific Negotiated Charges – All charges that the hospital has negotiated with third party payers for an item or service.
  • Shoppable Services – In addition to including all payer-specific negotiated charges for all items and services in a machine-readable file, hospitals must make public their payer-specific negotiated charges for common services for which consumers may have the opportunity to shop. These shoppable services must be displayed in a consumer-friendly manner.
    • Shoppable Services would include a service package that can be scheduled by a healthcare consumer in advance (e.g., those services that are routinely provided in non-urgent situations).  CMS is proposing that hospitals make public a list of payer-specific negotiated rates for 300 services, 70 of which are identified by CMS.
  • Monitoring and Enforcement – CMS proposes to monitor compliance with these new requirements predominantly through complaints from individuals or entities. CMS may also consider self-initiating audits of hospitals’ websites.  For noncompliance, CMS may provide a written warning notice to the hospital and request a corrective action plan if the noncompliance constitutes a material violation.  If the hospital fails to respond to CMS’ request for a corrective action plan, CMS proposes to impose a civil monetary penalty on the hospital not in excess of $300 per day.
  1. Increasing Choices and Encouraging Site Neutrality
  • The CY 2019 OPPS Final Rule enacted payment reductions for clinic visits (G0463) at excepted (or “grandfathered”) off-campus provider-based departments. Payments were scheduled to be reduced to 40 percent of the OPPS rate over the course of two years.  For CY 2019, to provide for a transition, payment made at 70 percent of the OPPS rate.
  • The 2020 OPPS Proposed Rule seeks to complete the two-year phase-in, resulting in payments of 40 percent of the OPPS rate for clinic visits at all off-campus provider-based departments.
  1. OPPS Payment Increase
  • CMS proposes to increase the OPPS payment rates by 2.7 percent in CY 2020.
  • CMS proposes to increase the PFS conversion factor from $36.04 to $36.09.
  1. Prior Authorization for Certain Hospital Outpatient Department (“HOPD”) Services
  • CMS has reported an increase in the utilization volume of certain HOPD services.  In response, CMS proposes to enact a prior authorization requirement for certain outpatient procedures for dates of service on or after July 1, 2020 that are likely to be related to cosmetic surgical procedures not covered by Medicare.  Specifically, CMS proposes to require prior authorization for the following services:
    • Blepharoplasty
    • Botulinum toxin injections
    • Panniculectomy
    • Rhinoplasty
    • Vein ablation
  • Claims submitted for services requiring prior authorization that have not received a provisional affirmation of coverage from CMS would be denied.  Claims associated with these services would also be denied (e.g., anesthesiology, physician, and/or facility services).  Even when a provisional affirmation has been received, a claim may be denied based on requirements that can only be evaluated after a claim has been submitted or information not available at the time of the prior authorization request.
  • CMS is proposing an expedited review process when a delay could be detrimental to the beneficiary.  CMS is also proposing exemptions from the prior authorization process upon a provider’s demonstration of compliance with Medicare coverage, coding, and payment rules.
    • Providers that achieve a prior authorization provisional affirmation threshold of at least 90 percent would qualify for an exemption under the proposed rule.
    • CMS would be able to withdraw this exemption.
  1. CY 2020 OPPS Payment Methodology for 340B Purchased Drugs
  • CMS is proposing to continue to pay ASP—22.5% for 340B drugs, including those acquired in non-excepted off-campus HOPDs.
  • Most notably, CMS is requesting comments on an appropriate remedy in preparation of a potentially unfavorable ruling in the suit with the AHA regarding the 340B payment cuts, specifically:
    • Is ASP+3% an appropriate payment amount for CY2020 and for purposes of determining a remedy for CYs 2018 and 2019? CMS historically reimbursed all drugs at ASP+6%.
    • Should the remedy be a retrospective claim-by-claim repayment?
    • Alternatively, should the remedy be prospective, such as an upward adjustment to future 340B claims?
    • Is there any other mechanism that is equitable both to 340B hospitals and non-340B hospitals, while maintaining budget neutrality? Note: in CYs 2018 and 2019, non-340B hospitals received additional CMS funding as a part of the 340B reimbursement reductions to maintain budget neutrality. Therefore, a reversion to the prior reimbursement rates would likely mean a reduction to non-340B hospitals for budget neutrality, specifically for other products and services paid through the OPPS.
    • In the event of an adverse ruling, CMS intends to propose the selected remedy in the CY 2021 rule
  1. ASC Covered Procedures List
  • CMS proposes to add the following to the ASC Covered Procedures List:
    • Total Knee Arthroplasty
    • Knee Mosaicplasty
    • Certain coronary intervention procedures
  1. Changes in the level of supervision of outpatient therapeutic services in hospitals and critical access hospitals
  • CMS is proposing to reduce the minimum level of supervision required for hospital outpatient therapeutic services from direct supervision to general supervision.  In short, this means the outpatient therapeutic service would have to be furnished under the physician’s overall direction and control rather than requiring the physician’s physical presence.

Key Proposed MPFS Changes

  1. Evaluation and Management (E/M) Services
  • CMS proposes to do away with blending payment rates for certain levels of E/M visits and set separate payment rates for each of the five levels of E/M visits. CMS proposes to adopt the AMA RUC-recommended values for the office/outpatient E/M visit codes for CY 2021 and the new add-on CPT code for prolonged service time, which would increase payments for these E/M visits.

   9.  Services furnished by physical therapy assistants (“PTA”) and occupational therapy assistants (“OTA”).

  • CMS proposes a policy to implement modifiers to identify therapy services that are furnished in whole or in part by physical therapy and occupational therapy assistants. Payment for service with these modifiers applied would be paid at 85 percent of the amount otherwise applicable.
  • A 10 percent de minimis standard is applied to these modifiers, which is based on the respective therapeutic minutes of time spent by the therapist and the PTA/OTA.
  1. Care Management Services
  • CMS proposes to increase payment for care management service provided to beneficiaries after discharge from an inpatient say or certain outpatient stays. CMS also proposes to replace certain Chronic Care Management codes with Medicare-specific codes to allow clinicians to bill incrementally to reflect additional time and resources required in certain cases and better distinguish complexity of illness.
  • Additionally, CMS is proposing creating new coding for Principal Care Management services, which would pay clinicians for providing care management for patients with a single serious and high-risk condition.
  1. Opioid Use Disorder Treatment
  • CMS is proposing regulations to implement legislation that established a new Medicare Part B benefit for medication-assisted treatment of opioid use disorder, furnished by opioid treatment programs. The legislation requires this benefit to be implemented by January 1, 2020.
  • CMS also proposes to add the face-to-face portions of certain office-based opioid use disorder treatment services to the telehealth list for CY 2020.

Again, Advis will be monitoring this process closely and is available to assist with comment drafting and submission. Please contact your Advis consultant directly or call 708-478-7030 with any questions.