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CMS Finalizes 2020 OPPS Rule

Controversial transparency provision separated out of final rule

November 07, 2019

The Centers for Medicare and Medicaid Services (CMS) finalized its 2020 Outpatient Prospective Payment System (OPPS) rule on Nov. 1. While the rule finalized the majority of the proposed provisions, CMS decided to separate out its controversial proposal to require hospitals to post reimbursement rates negotiated with private insurers.

Overall, the final rule increases payments for outpatient hospitals by 2.6%. However, CMS continued down its path of cutting payments under the 340B drug discount program as well as site-neutral payment cuts for hospitals with off-campus hospital outpatient departments. CMS also replicated its wage index adjustment changes first made in the 2020 IPPS rule. These changes bring up the wage index for hospitals at or below the 25th percentile by bringing down slightly the wage index for all other hospitals.

On the 340B side, CMS decided to continue its policy of cutting 340B reimbursements to PPS hospitals by approximately 30%. This comes despite WHA and other hospital advocates asking CMS to drop this policy, particularly in the wake of two court rulings declaring the cuts illegal. Similarly, CMS went ahead with phasing in the full site-neutral payment cuts despite another recent court decision declaring those cuts illegal as well. The final rule cuts payments by about 40% specifically for clinic visit E&M services provided at off-campus hospital outpatient departments. Taken together, WHA has estimated the Wisconsin impact of the site-neutral and 340B cuts to be about $80 million annually for Wisconsin PPS hospitals.

Perhaps the most contentious part of the proposed 2020 rule was not yet finalized by CMS. In the proposed rule, CMS proposed a major transparency initiative that would have required hospitals to post online in machine readable format proprietary negotiated payment rates for 70 “shoppable” health care services chosen by CMS and an additional 230 others chosen by individual hospitals. In the final rule, CMS decided to separate out this new proposed transparency initiative, saying that it would finalize such proposals at a later date. It is unclear when that will be and whether or not CMS will make significant changes to the final version. The American Hospital Association has signaled it is prepared to file a lawsuit to block these provisions citing CMS’s lack of statutory authority to impose such mandates.

In one bit of good news, CMS finalized its proposal to clarify the level of supervision required for certain outpatient therapy services. Under CMS’ new stated policy, physicians would not need to directly supervise (meaning they would not need to be physically present) outpatient therapeutic services. This is a clarification WHA and others have long sought and WHA is pleased to see this in the final rule.

WHA will continue to analyze the full rule and monitor the proposed transparency provisions and will provide more details in a future communication to members. In the meantime, contact WHA Director of Federal and State Relations Jon Hoelter with questions.

This story originally appeared in the November 07, 2019 edition of WHA Newsletter