Reductions to 340B Payments and Certain Provider-Based Departments and a Delay on Pricing Transparency Rules
This past weekend, CMS released the final rule for CY 2020 Outpatient Prospective System (OPPS) Hospital payment that goes into effect on January 1, 2020. There were some diversions from the proposed rule as well as several policies that have recently been found unlawful by courts. Please continue reading to see a few highlights from the rule.
Site-Neutral Payments to Continue
Site-neutral payments for clinic visits at excepted off-campus provider-based departments will continue in CY 2020. The cuts originally appeared in the CY 2019 rules as a 30% cut and will increase to a 60% cut in CY 2020. The intent is for CMS to remove any payment differential between provider-based and free-standing physician practices. Interestingly enough, the CY 2019 cut has been found unlawful by courts. CMS has not yet appealed the ruling but continued to include the cuts into CY 2020. We recommend all providers continue to pay attention to this issue as a chance for payment recoupments may later occur.
Continued Payment Cut for 340B Drugs and Biologicals
Similar to the above site-neutral payment cuts, CMS has also continued the 28.5% payment cut for 340B drugs and biologicals. This CY 2019 CMS payment reduction was also found to be unlawful by the courts in the last year with no decision issued by CMS of how they will move forward.
Wage Index Increases for Lower 25th Percentile
Wage Index increases for hospitals with a wage index in the lower 25th percentile were introduced. This allows an increase in the wage index values for hospitals that are below the 25th percentile of all hospital wage index values. Expect to see most of these increases occur for hospitals located in rural areas of the country. In order to make this budget neutral, CMS will decrease the wage index values for hospitals with wage index values above the 75th percentile.
Prior Authorization Process
In an effort to control volume increases and costs, a process of prior authorization for certain Outpatient Department services will be implemented. If a beneficiary is receiving services under the general categories of: (1) blepharoplasty; (2)botulinum toxin injections; (3) panniculectomy; (4) rhinoplasty; and (5) vein ablation then the service will require prior authorization to determine if appropriate.
Pricing Transparency Requirements Still to Come
And most interestingly, CMS removed detailed pricing transparency requirements from its proposed rules. They will re-release these rules under a separate rule-making process. Expect to see these proposed rules soon as they are likely to be designed to quickly push healthcare pricing transparency forward.
As a reminder, some of the key provisions in the pricing transparency requirements in the OPPS proposed rules were:
- Definitions of “hospitals” that are required to comply with rules.
- Definitions of “Items and Services” provided by hospitals including individual procedure codes, DRG groupings, lab bundles and hospital-employed physician charges.
- Definitions of “Standard Charges” to be posted, which includes both the gross charge and payer-specific negotiated payment for third party payers.
- List of 300 “shoppable services” that will be required to be posted to the hospital website. CMS has indicated they will dictate the first 70 but the remaining 230 will be up to Hospital discretion. For these 300 shoppable services both gross charges and net payments will need to be displayed in a consumer-friendly manner.
Remember to keep an eye out for updates on sections mentioned above and pricing transparency. If you have questions about this final rule and how it affects your organization, please reach out to Michael Alessandrini or Scott Treida through our contact form.
