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November 14, 2024 – As mentioned last week, the Centers for Medicare & Medicaid Services (CMS) recently put out a large buffet of regs – too many to digest in one blog post. While we focused on the Calendar Year (CY) 2025 Physician Fee Schedule (PFS) final reg last week, in our return trip to the reg buffet for seconds, we’ll provide highlights from another CY 2025 final payment reg: the Outpatient Prospective Payment System (OPPS).
The OPPS is the major reg affecting payments for outpatient hospital services. To help me cover this final reg, I’m bringing in my colleague Deborah Godes.
For more coverage on the CY 2025 OPPS final rule, read our key takeaways and access our updated, interactive data dashboard.
As we noted in a previous Regs & Eggs blog post, one of the major proposed policies was a new Medicare condition of participation (CoP) related to obstetrical services. Given ongoing concerns about maternal health, CMS finalized that new CoP along with modifications to the emergency services and transfer CoPs. However, in response to significant feedback on the proposal, CMS will phase in the requirements over two years.
New Obstetrical Services CoP
CMS finalized the following requirements as part of the new CoP:
Modification to Emergency Services CoP
CMS finalized an “emergency services readiness” CoP within the existing emergency services CoP for hospitals and CAHs. The emergency services readiness CoP applies to all hospitals and CAHs offering emergency services, regardless of whether a hospital or CAH offers additional specialty service lines (such as obstetrical services). Under the revised CoP, hospitals must have adequate provisions and protocols to meet the emergency needs of patients in accordance with the complexity and scope of services offered. Hospitals also must have protocols consistent with nationally recognized and evidence-based guidelines for the care of patients with emergency conditions – and must train their staff on these protocols. Finally, hospitals must maintain certain supplies and products necessary for treating emergency cases, including:
Commenters asked CMS to address the emergency department boarding crisis in this modified CoP. CMS stated that emergency department boarding is beyond the scope of this reg, but stated that it may address the issue in future rulemaking.
Transfer Protocols
CMS finalized a requirement that hospitals have written policies and procedures for transferring patients under their care. CMS also finalized a requirement for hospitals (but not CAHs and rural emergency hospitals, which have similar requirements already) to provide annual training to the relevant staff (as determined by the facility) regarding policies and procedures for transferring patients under the hospital’s care.
Effective Dates
In response to stakeholder comments expressing concern about facilities’ ability to meet the new and revised CoPs, CMS finalized a phase-in timeframe for the requirements as follows:
CMS finalized a 2.9% payment increase in CY 2025 for hospital outpatient services and services delivered by ambulatory surgical centers (ASCs). Such an increase, in addition to other factors such as higher enrollment in Medicare and greater utilization of services, will result in an approximate increase of $4.7 billion (or 5.7%) from $83 billion to $87.7 billion for hospital outpatient services, and $308 million (or 4.3%) from $7.1 billion to $7.4 billion for ASC services.
Under the OPPS, CMS assigns items, services, and procedures to ambulatory payment classifications (APCs) that are used to set payment rates. The APCs are organized such that each group is intended to be homogeneous both clinically and in terms of resource use. Starting in 2015, CMS began implementing comprehensive APCs (C-APCs) that include a primary service and all adjunctive services provided to support the delivery system of the primary service. For CY 2025 and subsequent years, CMS finalized its policy to exclude cell and gene therapies from C-APC packaging.
The Consolidated Appropriations Act (CAA), 2023, provided for temporary separate payments for certain non-opioid treatments for pain relief in both the hospital outpatient department (OPD) and ASC settings from January 1, 2025, through December 31, 2027. In the final reg, CMS finalized its proposed definition for what constitutes non-opioid treatments. CMS also finalized a list of non-opioid treatments for pain relief for which separate payment will be made. Commenters on the proposed rule suggested additional non-opioid products for that list. CMS reviewed eight of the suggested products and ultimately added four in the final rule:
CMS packages several categories of non-pass-through drugs, biologicals, and radiopharmaceuticals, regardless of the cost of the products. Many stakeholders have urged CMS to always pay separately for diagnostic radiopharmaceuticals, and not just when the products have pass-through payment status. In the CY 2024 proposed reg, CMS invited comments on potential modifications to its packaging policy for diagnostic radiopharmaceuticals, but ultimately decided not to finalize a policy. For CY 2025, however, CMS finalized a significant policy change whereby diagnostic radiopharmaceuticals will be separately payable if the per-day costs exceed $630. Based on the finalized policy, 26 diagnostic radiopharmaceuticals qualify for separate payment in CY 2025.
Beginning with CY 2020, CMS established a process through which hospitals must submit a prior authorization request for a provisional coverage affirmation before an outpatient service is furnished to a beneficiary and before a claim is submitted. Since CY 2022, CMS has not changed the list of services subject to prior authorization – and CY 2025 was no exception. However, despite not adding new services to the list, CMS did change its review timeline for non-expedited (standard) requests from 10 days to seven days, to align with the CMS Interoperability and Prior Authorization Final Rule.
CMS maintains a list of services that it perceives to be safely provided only in an inpatient setting, and precludes payment for these services under the OPPS. In CY 2024, CMS added nine services that were newly defined by the American Medical Association CPT Editorial Panel to the inpatient only (IPO) list. This year, CMS added three newly defined procedures to the IPO list and removed one add-on code from the IPO list. Interestingly, CMS did not originally propose to remove this add-on code from the IPO list, but decided to do so in the final reg based on a public comment. Last year, CMS decided to remove a code from the ASC Covered Procedures List (CPL) in the OPPS final reg based on stakeholder input, so while it is rare for CMS to remove a code from a covered procedures list in a final reg when that code was not proposed for removal, this marks the second year in a row where CMS has done just that.
As discussed in last week’s blog post, in the PFS final reg, CMS finalized its proposal not to pay for new telemedicine evaluation and management (E/M) services created by the CPT Editorial Panel. In the OPPS reg, CMS followed suit, and will not pay for these codes under the OPPS. Given the similarities between the new telemedicine E/M code set and the office/outpatient E/M code set, CMS believes that the new telemedicine codes fall within the scope of the hospital outpatient clinic visit policy because the predecessor codes (office/outpatient E/M codes 99201 – 99205 and 99211 – 99215) will be reported using code G0463.
Following a decennial census, the US Office of Management and Budget uses updated population and commuting pattern data to update core-based statistical area (CBSA) configurations. CMS uses these geographic regions to delineate urban and rural areas and calculate the wage index, among other things. In this reg, CMS adopted the new CBSA configurations as finalized in the fiscal year (FY) 2025 Inpatient Prospective Payment System Final Reg. CMS also finalized its policy to apply a 5% cap on any decrease to a hospital’s wage index from its wage index in the prior fiscal year.
Other noteworthy policies in the final rule include:
That was a big second helping of regs (and eggs)! Reach out to us at McDermott+ if you want a deeper dive into any of these policies.
Until next week, this is Jeffrey (and Deborah) saying, enjoy reading regs with your eggs.
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