/ en Thu, 31 Jul 2025 03:14:46 -0500 Mon, 28 Jul 25 13:43:00 -0500 /advisory/2025-07-28-hospital-outpatient-ambulatory-surgical-center-proposed-rule-cy-2026 <div class="container"><div class="row"><div class="col-md-8"><p>The Centers for Medicare & Medicaid Services (CMS) July 17 published its calendar year (CY) 2026 outpatient prospective payment system (OPPS) and ambulatory surgical center (ASC) <a href="https://www.federalregister.gov/documents/2025/07/17/2025-13360/medicare-and-medicaid-programs-hospital-outpatient-prospective-payment-and-ambulatory-surgical" target="_blank" title="CY 2026 outpatient prospective payment system (OPPS) and ambulatory surgical center (ASC) proposed rule.">proposed rule</a>. The rule would increase OPPS rates by a net 2.4% in CY 2026 compared to CY 2025. It also includes proposals to pay at the site-neutral rate for drug administration services in grandfathered off-campus hospital outpatient departments (HOPDs), phase out the inpatient-only (IPO) list, expedite the 340B remedy timeline for repayment for non-drug services and conduct a new drug acquisition cost survey, and modify the price transparency requirements for hospitals.</p><div><h2 id="keyhighlights">Key Highlights</h2><p>CMS’ proposed policies would:</p><ul><li>Increase Medicare hospital OPPS rates by a net 2.4% in CY 2026.</li><li>Pay for drug administration services in grandfathered off-campus HOPDs at the site-neutral rate of 40% of the OPPS rate and request comment on expanding site-neutral payment to on-campus clinic visits and other grandfathered off-campus services.</li><li>Phase out the IPO list over three years, starting with removing 285 musculoskeletal services in 2026.</li><li>Expedite the 340B remedy timeline for repayment of $7.8 billion for non-drug services through a 2% annual cut to the OPPS conversion factor (CF), concluding by CY 2031.</li><li>Permanently revise the definition of direct supervision for cardiac rehabilitation (CR), intensive cardiac rehabilitation (ICR) and pulmonary rehabilitation (PR) services and diagnostic services in HOPDs to include virtual direct supervision.</li><li>Remove three measures on health equity and one on COVID-19 vaccination among health care personnel from the Outpatient, ASC and Rural Emergency Hospital (REH) quality reporting programs.</li><li>Adopt a new ED timeliness measure for the Outpatient and REH quality reporting programs and a new patient-reported outcome measure for the ASC program.</li><li>Change the methodology for the Overall Hospital Star Rating to emphasize Safety of Care measures.</li><li>Make several changes to the hospital price transparency requirements, including to data elements of the machine-readable file, the attestation requirements and the enforcement process.</li><li>Collect market-based payment rate data on the Medicare cost report for purposes of setting the inpatient PPS relative weights beginning in FY 2029.</li></ul></div><p>The final rule will be published on or around Nov. 1 and provisions generally take effect Jan. 1, 2026. CMS will accept comments on the proposed rule through Sept. 15, 2025.</p><h2 id="ahatake">AHA Take</h2><p>The AHA is disappointed that CMS proposes an inadequate Medicare outpatient hospital payment update, as many hospitals — especially those in rural and underserved communities — operate under challenging financial pressures.</p><p>We oppose the proposal to expand “site-neutral” cuts and eliminate the inpatient-only list, as both policies fail to account for the real and crucial differences between hospital outpatient departments and other sites of care. Studies show hospital outpatient departments are more likely to serve Medicare patients who are sicker, more clinically complex, and more likely to be disabled or living in poorer, rural communities than patients treated in independent physician offices.</p><p>We are also concerned with CMS’ proposal to claw back billions of dollars from hospitals at a far faster rate than originally promised. It is important to remember that this clawback punishes 340B hospitals for the agency’s own mistake in implementing a policy that a unanimous Supreme Court held to be unlawful. Doubling down on that unlawfulness, the proposed recoupment is both illegal and unwise, and it should not be finalized.</p><p>Finally, we are concerned about the proposal to pursue a burdensome acquisition cost survey, especially if the agency’s goal is to drastically reduce Medicare payments to hospitals that serve the nation’s most vulnerable communities.</p><p>We look forward to reviewing these proposals in more detail and participating in the comment process with the agency.</p><h2 id="whatyoucando">What You Can Do</h2><ul><li><strong>Participate in an AHA members-only webinar on Thursday, Aug. 7, at 3 p.m. ET</strong> to share your questions and feedback on this regulation for AHA’s comment letter to CMS. <a href="https://aha-org.zoom.us/webinar/register/WN_59Aqo3t6QQm_hIfNApweCg" target="_blank">Register for this 60-minute webinar.</a></li><li><strong>Share this advisory with your senior management team</strong> and ask your chief financial officer to examine the impact of the proposed payment changes on your Medicare revenue for CY 2026. Spreadsheets comparing the proposed changes in the ambulatory payment classification (APC) payment rates and weights from 2025 to 2026 are available on the <a href="/topics/outpatient-pps">AHA’s OPPS webpage</a>. To access these, you must be logged on to the website.</li><li><strong>Share this advisory with your billing, medical records, quality improvement and compliance departments and your clinical leadership team</strong> to apprise them of the proposals around the APCs, CoPs and quality measurement requirements.</li><li><strong>Submit comments to CMS with your specific concerns by Sept. 15 at </strong><a href="http://www.regulations.gov/" target="_blank"><strong>www.regulations.gov</strong></a><strong>.</strong></li></ul><hr><h2>Table of Contents</h2><p><a href="#keyhighlights">KEY HIGHLIGHTS</a></p><p><a href="#ahatake">AHA TAKE</a></p><p><a href="#whatyoucando">WHAT YOU CAN DO</a></p><p><a href="#rulechanges">CY 2026 OPPS PROPOSED RULE CHANGES</a></p><p class="toc-indent"><a href="#oppspaymentupdate">OPPS Payment Update and Linkage to Hospital Quality Data Reporting</a></p><p class="toc-indent"><a href="#oppspaymentupdate"></a><a href="#dataproposed">Data Proposed for Use in CY 2026 OPPS/ASC Rate Setting</a></p><p class="toc-indent"><a href="#proposedrecalibration">Proposed Recalibration and Scaling of APC Relative Weights</a></p><p class="toc-indent"><a href="#proposedsiteneutral">Proposed Site-neutral Payment Policies for Off-campus Provider-based Departments</a></p><p class="toc-indent"><a href="#paymentsfordrugs">Payments for Drugs, Biologicals and Radiopharmaceuticals</a></p><p class="toc-indent"><a href="#proposaltoexpedit">Proposal to Expedite Recoupment Timeline Under 340B Remedy Rule</a></p><p class="toc-indent"><a href="#hospitaldrugacquisition">Hospital Drug Acquisition Cost Survey</a></p><p class="toc-indent"><a href="#addonpayment">Add-on Payment for Radiopharmaceutical Technetium-99m</a></p><p class="toc-indent"><a href="#paymentforintensive">Payment for Intensive Outpatient and Partial Hospitalization Programs</a></p><p class="toc-indent"><a href="#areawageindex">Area Wage Index</a></p><p class="toc-indent"><a href="#ruralschadjustment">Rural SCH Adjustment</a></p><p class="toc-indent"><a href="#cancerhospital">Cancer Hospital Payment Adjustment</a></p><p class="toc-indent"><a href="#comprensiveapcs">Comprehensive APCs</a></p><p class="toc-indent"><a href="#rfi">RFI: Payment Policy for Software as a Service</a></p><p class="toc-indent"><a href="#virtualdirect">Virtual Direct Supervision of Certain Rehabilitation and Diagnostic Services Furnished to Hospital Outpatients</a></p><p class="toc-indent"><a href="#proposedelimination">Proposed Elimination of the IPO List</a></p><p class="toc-indent"><a href="#proposednonopioid">Proposed Non-opioid Policy for Pain Relief Under the OPPS and ASC Payment System</a></p><p class="toc-indent"><a href="#paymentforskin">Payment for Skin Substitute Products Under the OPPS</a></p><p class="toc-indent"><a href="#hospitaloutpatientoutlier">Hospital Outpatient Outlier Payments</a></p><p class="toc-indent"><a href="#transitionalpassthrough">Transitional Pass-through Payments</a></p><p class="toc-indent"><a href="#beneficiarycoinsurance">Beneficiary Coinsurance</a></p><p class="toc-indent"><a href="#outpatientquality">Outpatient Quality Reporting Program</a></p><p><a href="#cy2026asc">CY 2026 ASC PROPOSED RULE CHANGES</a></p><p class="toc-indent"><a href="#ascpaymentupdate">ASC Payment Update</a></p><p class="toc-indent"><a href="#proposedchangestothelist">Proposed Changes to the List of ASC-covered Surgical Procedures</a></p><p class="toc-indent"><a href="#ascqualityreporting">ASC Quality Reporting Program</a></p><p><a href="#otherqualityrelated">OTHER QUALITY-RELATED PROPOSALS</a></p><p class="toc-indent"><a href="#proposedmodifications">Proposed Modifications to the Overall Star Rating Methodology to Emphasize Safety of Care</a></p><p class="toc-indent"><a href="#rehquality">REH Quality Reporting Program</a></p><p><a href="#otherproposals">OTHER PROPOSALS</a></p><p class="toc-indent"><a href="#marketbasedweights">Market-based Weights for the Inpatient PPS</a></p><p class="toc-indent"><a href="#changestothehospitalprice">Changes to the Hospital Price Transparency Requirements</a></p><p class="toc-indent"><a href="#medicarepartbdrugs">Medicare Part B Drugs Without a Medicaid National Drug Rebate Agreement</a></p><p class="toc-indent"><a href="#graduatemedicaleducation">Graduate Medical Education Accreditation</a></p><p class="toc-indent"><a href="#allinclusive">All-inclusive Rate Add-on Payment for High-Cost Drugs Provided by Indian Health Services and Tribal Facilities</a></p><p><a href="#furtherquestions">FURTHER QUESTIONS</a></p><hr><h2 id="rulechanges">CY 2026 OPPS Proposed Rule Changes</h2><h3 id="oppspaymentupdate">OPPS Payment Update and Linkage to Hospital Quality Data Reporting</h3><p>The CY 2025 OPPS conversion factor is $89.169. To calculate the proposed conversion factor for CY 2026, CMS adjusted the 2025 conversion factor by the fee schedule increase factor and made further adjustments for various budget neutrality factors. The fee schedule increase factor equals the proposed hospital market-basket increase factor of 3.2%, reduced by a statutorily required productivity adjustment that CMS proposes at 0.8 percentage points, for a net 2.4% increase. Hospitals that do not meet outpatient quality reporting (OQR) program requirements are subject to a reduction of 2.0 percentage points, resulting in a proposed fee schedule increase factor of 0.4%. In addition, the agency notes that under its 340B remedy offset proposal (described further below), payments for services at hospitals subject to the 340B remedy offset will be reduced by 2.0 percentage points, resulting in a CY 2026 estimated reduction in OPPS spending $1.1 billion. Thus, the proposed CY 2026 OPPS conversion factor is $91.747 for hospitals meeting OQR requirements and $89.958 for hospitals not meeting OQR requirements.</p><p>The increase in federal spending due only to changes in the 2026 OPPS proposed rule is estimated to be approximately $1.61 billion or 2.0%. CMS also estimates spending increases taking into account estimated changes in enrollment, utilization and case mix; under this, for 2026, it estimates that such OPPS expenditures, including beneficiary-cost sharing, would be approximately $100 billion, which is approximately $8.1 billion higher than estimated expenditures in 2025. The table below details the full impact of the proposed policies.</p><table><thead><tr><th>All Hospitals</th><th>2.0%</th></tr></thead><tbody><tr><td>Urban Hospitals</td><td>2.0%</td></tr><tr><td>Large Urban</td><td>1.9%</td></tr><tr><td>Other Urban</td><td>2.2%</td></tr><tr><td>Rural</td><td>2.0%</td></tr><tr><td>Sole Community</td><td>2.2%</td></tr><tr><td>Other Rural</td><td>1.5%</td></tr></tbody></table><hr><h3 id="dataproposed">Data Proposed for Use in CY 2026 OPPS/ASC Rate Setting</h3><p>To set proposed OPPS and ASC payment rates, CMS would use the most updated cost reports and claims data available. Therefore, the agency proposes using the CY 2024 claims data and the most updated cost report extract available from the Healthcare Cost Report Information System.</p><h3 id="proposedrecalibration">Proposed Recalibration and Scaling of APC Relative Weights</h3><p>For 2026, CMS proposes recalibrating the APC relative weights using hospital claims for services furnished during CY 2024. As in previous years, the agency standardizes all relative payment weights to the APC 5012 (Level 2 Examinations and Related Services) because that is the APC to which Healthcare Common Procedure Coding System (HCPCS) code G0463 (hospital outpatient clinic visit) is assigned. G0463 is the most frequently billed OPPS service. That is, CMS calculates an “unscaled” — i.e., not adjusted for budget neutrality — relative payment weight by comparing the geometric mean cost of each APC to the geometric mean cost of the APC 5012.</p><p>To comply with budget neutrality requirements, CMS compares the estimated unscaled relative payment weights in CY 2026 to the estimated total relative payment weights in CY 2025 using the service volume in the CY 2023 claims data. Based on this comparison, the CY 2026 unscaled APC payment weights are proposed to be adjusted by a weight scalar of 1.4624. The effect of the adjustment is to increase the unscaled relative weights by about 46.24% to ensure that the CY 2026 relative payment weights are budget neutral.</p><h3 id="proposedsiteneutral">Proposed Site-neutral Payment Policies for Off-campus Provider-based Departments</h3><h4>Background</h4><p>Section 603 of the Bipartisan Budget Act of 2015 requires that services, except for dedicated emergency department (ED) services, furnished in off-campus provider-based departments (PBDs) that began billing under the OPPS on or after Nov. 2, 2015, or that cannot meet the 21st Century Cures Act "mid-build" exception, will no longer be paid under the OPPS, but under another applicable Part B payment system. For 2026, the agency continues to identify the Physician Fee Schedule (PFS) as the applicable payment system for most of these non-grandfathered (non-excepted) services and sets this site-neutral payment rate at 40% of the OPPS rate.</p><p>In the CY 2019 OPPS/ASC final rule, CMS applied a previously unused statutory authority to develop a “method to control for unnecessary increases in the volume of outpatient services.” Under this method, CMS pays the site-neutral rate for clinic visit services furnished in off-campus PBDs that had previously been protected from site-neutral provisions under the Bipartisan Budget Act of 2015. For CY 2026, CMS will continue to pay for hospital outpatient clinic visit services furnished in grandfathered (excepted) off-campus PBDs at 40% of the OPPS payment amount. It also will continue to exempt excepted off-campus PBDs of rural sole community hospitals (SCHs) from this clinic visit payment policy.</p><h4>Proposed Use of the “Method to Control Unnecessary Increases in the Volume of Outpatient Services” to Establish Site-neutral Payment for Drug Administration Services in Grandfathered (Excepted) Off-campus PBDs</h4><p>CMS claims that financial incentives continue to drive service volume increases in HOPDs, particularly for drug administration services, leading to “unnecessary” Medicare spending and higher out-of-pocket costs for beneficiaries. The agency attributes this trend to site-of-service payment disparities and hospital acquisitions of physician practices, which enable billing at higher hospital-based rates.</p><p><strong>Therefore, starting in CY 2026, CMS proposes to again use the statutory authority described above to impose a site-neutral payment reduction. Under its proposal, it would pay the site-neutral rate of 40% of the OPPS rate for drug administration procedures furnished in grandfathered (excepted) off-campus PBDs. In addition, it discusses its interest in assessing additional service families for site-neutral payment, such as imaging without contrast, in future rulemaking.</strong></p><p>Consistent with its previous decision to exempt rural SCHs from site-neutral clinic visit payment policies, CMS also proposes to exempt rural SCHs from its proposed drug administration site-neutral policy. It bases this exemption on the unique challenges faced by rural SCHs, such as limited access to care, higher costs and the fact that they are often the sole outpatient provider in their communities. CMS notes that rural SCHs have not shown evidence of unnecessary volume increases for drug administration services and that applying lower PFS-equivalent rates could harm access. The exemption would maintain current full OPPS payment levels for drug administration services in grandfathered (excepted) rural SCHs, avoiding an estimated $16 million in savings that would result from implementing the policy without the exemption. CMS requests comments on this proposed exemption for rural SCHs, its potential impact and whether other hospital types should also be considered for similar exemptions.</p><p>The drug administration APCs to which this policy would apply are:</p><ul><li>APC 5691 (Level 1 Drug Administration).</li><li>APC 5692 (Level 2 Drug Administration).</li><li>APC 5693 (Level 3 Drug Administration).</li><li>APC 5694 (Level 4 Drug Administration).</li></ul><p>There are currently 61 HCPCS codes describing various drug administration procedures that map to the four APCs above. Once again, the site-neutral payment rate proposed by CMS would be 40% of the OPPS payment rate.</p><p><strong>As in CY 2019, CMS again proposes to implement this payment reduction in a non-budget-neutral manner. As such, the agency estimates that the proposal will reduce hospital payments by $280 million in CY 2026 and $10.88 billion over 10 years (CY 2026 to CY 2035).</strong></p><p>A summary of CMS’ rationale for this proposal follows.</p><h5>Utilization of Drug Administration Services</h5><p>CMS reports it has observed a significant increase in the volume of drug administration services provided in HOPDs, particularly at grandfathered (excepted) off-campus PBDs, which the agency claims is driven in part by the large payment differentials between HOPDs and physician offices. It claims that drug administration services can be safely performed in both settings, but notes that services have increasingly migrated to the HOPD setting. CMS therefore believes that applying its volume control methodology to drug administration services will curb unnecessary growth, improve efficiency and reduce beneficiary financial burden.</p><h5>Payment for Drug Administration Services at PBDs</h5><p>CMS analyzed claims data for the top 20 most frequently billed drug administration codes and found that the most commonly used codes are nearly identical, with only slight variations in the order based on volume between grandfathered (excepted) and non-grandfathered (non-excepted) off-campus PBDs. CMS argues that this suggests the lower site-neutral payment rate is sufficient and can support the provision of these services in an off-campus PBD.</p><p>The agency also compared PFS and OPPS payment rates for drug administration by creating a “PFS proxy” APC payment rate for each of the four drug administration APCs and found that the volume-weighted PFS payment for the drug administration APCs ranged from 24% to 33% of the OPPS payment. CMS concludes that this difference in payments creates financial incentives that unnecessarily shift services from lower-cost physician offices to higher-cost hospital outpatient settings. CMS asserts that such migration is unjustified when services can be safely delivered in less expensive settings and views the continued growth in OPPS drug administration volume as unnecessary and driven by payment incentives.</p><p>Finally, it notes that if the PFS payment rate for drug administration services ranges from 24% to 33% of the OPPS rate, then a site-neutral rate set at 40% of the OPPS amount should sufficiently cover the cost of these services. CMS concludes that the shift of services from the physician office to the HOPD is unnecessary if the beneficiary can safely receive the same services in a lower-cost setting but is instead receiving services in the higher-cost setting due to payment incentives.</p><h5>Patient Severity and Cost of Care</h5><p>In response to its previous rulemaking, CMS reports that some commenters argued that higher payments for services in HOPDs are justified due to the greater complexity of patients, higher operational costs, and the need to maintain emergency and standby capabilities. While CMS acknowledges that HOPDs serve more medically complex patients, it nevertheless does not support higher payments for services that it believes can also be safely and effectively provided in lower-cost settings, like physician offices and ASCs. CMS cites studies that it asserts demonstrate no quality differences in services delivered across these settings. Finally, while CMS acknowledges that HOPD patients have higher risk scores than in other settings, it argues that patient severity does not meaningfully affect the cost of care for low-complexity services such as drug administration.</p><h4>Request for Information (RFI): Expanding the Method to Control for Unnecessary Increases in the Volume of Covered HOPD Services to On-campus Clinic Visits</h4><p>CMS requests comments on whether its current site-neutral payment policy should be expanded to include on-campus clinic visits. The agency notes that over 60% of clinic visits still occur on campus and remain unaffected by its site-neutral payment policy. It believes clinic visits, which are the most commonly billed OPPS service, can often be safely performed in lower-cost settings such as physician offices, and seeks input on whether paying on-campus clinic visits at 40% of the OPPS rate would be appropriate. The agency also invites feedback on how to distinguish necessary from unnecessary clinic visits, the potential impact of this policy on hospitals (including rural and other specific hospital types), the implications for patient access and out-of-pocket costs, and whether additional costs justify higher payments for on-campus clinic visits. CMS indicates that these comments will inform future rulemaking efforts on this topic.</p><h4>RFI: Adjusting Payment Under the OPPS for Services Predominately Performed in the ASC or Physician Office Settings</h4><p>CMS is requesting feedback on potential payment reforms for OPPS services that are predominantly performed in lower-cost settings such as ASCs or physician offices. The agency notes that despite its efforts, it continues to observe growth in HOPD service volumes that it believes are influenced by financial differentials. Therefore, it is exploring a more systematic approach to adjusting payments based on where services are most frequently performed. The agency seeks input on a range of issues, including identifying services with unnecessary volume growth, using setting-specific volume to inform payment levels, determining appropriate data timeframes and sources, accounting for the geographic availability of care and addressing packaging differences across payment systems. CMS also asks whether exceptions should be made for services tied to emergency or trauma care, whether certain hospital types (e.g., rural hospitals) should be excluded, and whether other utilization controls, such as prior authorization, should be considered.</p><h3 id="paymentsfordrugs">Payments for Drugs, Biologicals and Radiopharmaceuticals</h3><h4>Proposed Packaging Policy for “Threshold-packaged” and “Policy-packaged” Drugs, Biologicals and Radiopharmaceuticals</h4><p>CMS pays for drugs, biologicals and radiopharmaceuticals that do not have pass-through status in one of two ways: packaged payment or separate payment (individual APCs). For CY 2026, CMS proposes to maintain the packaging threshold for “threshold-packaged” drugs, including non-implantable biologicals and therapeutic radiopharmaceuticals, of $140 per day. This means that such products with a per-day cost of $140 or less would have their cost packaged in the procedure with which they are billed.</p><p>There are exceptions to this threshold-based packaging policy for certain “policy-packaged” drugs, biologicals and contrast agents. CMS proposes to continue to package the costs of all anesthesia drugs; intraoperative items and services; drugs, biologicals and contrast agents and other drugs that function as supplies when used in a diagnostic test or procedure; and drugs and biologicals that function as supplies when used in a surgical procedure (e.g., skin substitutes), regardless of whether they meet the $140 per day threshold.</p><h4>Diagnostic Radiopharmaceuticals Separate Payment</h4><p>In the CY 2025 final rule, CMS established a policy to pay separately for diagnostic radiopharmaceuticals with per-day costs above a threshold of $630 — which was approximately two times the volume-weighted average cost amount then associated with diagnostic radiopharmaceuticals. It also finalized a policy to update the $630 threshold in subsequent years by the Producer Price Index for Pharmaceutical Preparations.</p><p>Using this methodology, CMS proposes setting the packaging threshold for diagnostic radiopharmaceuticals at $655 per day for CY 2026 and proposes to pay for diagnostic radiopharmaceuticals with a per-day cost above this threshold based on their Mean Unit Cost derived from OPPS claims data. In the proposed rule, the agency again encourages manufacturers to begin or continue reporting average sales price (ASP) data for potential future use.</p><h4>Separately Payable Drugs and Biologicals</h4><p>For CY 2026, CMS proposes to continue its current policy and pay for most separately payable non-pass-through Part B drugs and biologicals at the “statutory default rate” of ASP plus 6%.</p><h4>Payment for New Drugs Before ASP Data Is Available</h4><p>Consistent with policy in the PFS, CMS proposes to continue to pay for new non-pass-through Part B drugs and biologicals during an initial sales period (two quarters) for which ASP pricing data are not yet available at a rate of wholesale acquisition cost (WAC) plus 3%. Other drugs and biologicals where ASP data are not available will continue to be paid at WAC plus 6%, as required by statute. If ASP and WAC are unavailable, Medicare will pay 95% of the average wholesale price.</p><h4>Invoice Drug Pricing Proposal for CY 2026</h4><p>In the CY 2025 OPPS final rule, CMS finalized a policy, effective Jan. 1, 2026, for determining payment rates for separately payable drugs and biologicals when standard pricing data (such as ASP, WAC, average wholesale price or mean unit cost) is unavailable.</p><p>Under this policy, if a drug does not appear in Addendum B (meaning there is no CMS-provided rate), Medicare Administrative Contractors (MACs) will calculate payment based on provider invoice costs, defined as the net acquisition cost after subtracting rebates, chargebacks and post-sale concessions. Before setting a payment rate using invoices, MACs must verify that the drug is not policy-packaged and the per-day cost exceeds the applicable packaging threshold. However, CMS clarified that it, not the MACs, will determine whether the drug is policy-packaged, while MACs will still assess whether the per-day cost exceeds the threshold.</p><p>For drugs subject to ASP reporting, invoice pricing is expected to be temporary (lasting 2-3 quarters). For drugs not subject to ASP reporting (e.g., diagnostic pharmaceuticals), invoice pricing may be used for a longer duration. CMS also noted that the National Uniform Billing Committee has created Value Code 92 to facilitate reporting of drug invoice costs on hospital claims, aligning with this new invoice-based pricing policy.</p><h3 id="proposaltoexpedit">Proposal to Expedite Recoupment Timeline Under 340B Remedy Rule</h3><p>Beginning in CY 2018 through CY 2022, CMS instituted a policy to reduce payments for certain providers for separately payable Part B drugs purchased under the 340B Drug Pricing Program from ASP plus 6% to ASP minus 22.5%. Due to budget neutrality requirements, this nearly 30% payment cut was offset by increasing payments for non-drug services to all hospitals paid under the OPPS by 3.19%. Upon successful litigation led by the AHA, the Supreme Court unanimously ruled that the agency’s policy was unlawful. The agency subsequently finalized a remedy that would repay 340B hospitals in one-time lump sum payments totaling $10.6 billion, as well as seek recoupment of $7.8 billion in funds from all hospitals for the increased payments received for non-drug services. The intended goal was to undo the unlawful policy and restore all providers to the same position as if the policy had never been in place. The agency had finalized a recoupment strategy that would reduce the OPPS conversion factor by 0.5% annually beginning in CY 2026 until the full $7.8 billion was recouped, which was estimated to occur in CY 2041.</p><p>CMS is now proposing to expedite the timeline for this recoupment by adjusting the reduction in the OPPS conversion factor from 0.5% to 2%. As a result, the agency estimates that it will recoup the entire $7.8 billion by CY 2031, or about six years. <strong>Under this approach, the agency estimates an impact of $1.1 billion in reduced payments to all OPPS hospitals in CY 2026.</strong> The agency’s stated rationale for a shorter recoupment timeline is to minimize the impact of potential changes in non-drug services over time and ensure a more equitable impact on all hospitals. Specifically, CMS states “…the longer it takes for us to fully recover the $7.8 billion, the less likely that the relative burden on hospitals from the adjustments will match the relevant benefits those hospitals previously received.” Further, the agency notes that it will not seek any interest or account for any inflation on the $7.8 billion to be recouped.</p><p>CMS also noted that it is considering an alternative proposal that would expedite the timeline even further by adjusting the reduction in the OPPS conversion factor to 5% which would result in the full $7.8 billion being recouped in approximately three years. <strong>Under this approach, the agency estimates an impact of $2.7 billion in reduced payments to all OPPS hospitals in CY 2026.</strong></p><p>The agency also notes that the ASC standard rate setting methodology adopts OPPS payment rates for the device offset amount. Therefore, any changes to the OPPS conversion factor can have an indirect impact on ASC payment rates. To mitigate this impact, the agency proposes not applying any changes to the OPPS conversion factor to the ASC payment system for the device offset amount, as it would not accurately reflect the device costs of covered surgical procedures performed in the ASC setting.</p><h3 id="hospitaldrugacquisition">Hospital Drug Acquisition Cost Survey</h3><p>CMS announced a notice of intent to conduct an acquisition cost survey of all hospitals for covered outpatient drugs. This follows an April 18 Executive Order by President Trump (E.O. 14273), “Lowering Drug Prices by Once Again Putting Americans First,” that directed the HHS secretary to publish in the Federal Register a plan to conduct a hospital acquisition cost survey for covered outpatient drugs. The survey is anticipated to go live starting the end of CY 2025, and responses will be collected into early CY 2026. Results of the survey will be used to set payment rates for covered outpatient drugs in the CY 2027 rulemaking.</p><p>The survey will ask hospitals to report, by individual National Drug Code (NDC), the total number of units purchased and the total acquisition costs net of all rebates (including prompt pay discounts, wholesaler discounts, etc.). For 340B hospitals, the agency wants a separate accounting of the total number of units and total acquisition costs purchased under the 340B program and outside of the 340B program. CMS also stated that it will release the list of NDCs that will be included in the survey in advance of the survey going live. The agency estimates it will take 73.5 hours for a hospital to complete the survey at a cost of approximately $4,000 per hospital.</p><p>The agency is also considering various approaches to account for hospital non-responses to the survey to meet the statutory requirement of a large enough sample size and statistically significant results for its usability in setting and varying payment rates among hospitals. The agency outlines two primary reasons why hospitals may not respond to the survey: 1) because the hospital has minimal acquisition costs, or 2) because the hospital has lower acquisition costs than other hospitals, so it is “withholding its response strategically.” As a result, the agency lays out various options it could use to estimate acquisition costs for a non-responding hospital:</p><ol><li>Assume the lowest average acquisition cost reported by a similar responding hospital.</li><li>Use supplemental data sources such as pricing from the Federal Supply Schedule (FSS) or, for 340B drugs, use 340B ceiling price data from HRSA.</li><li>Apply a percentage of the drug’s ASP (e.g., ASP plus 0%) as the average acquisition cost for each NDC for a non-responding hospital.</li><li>Determine that for certain hospitals, drugs should be packaged as part of an Ambulatory Payment Classification (APC) rather than paid separately. This assumes that a hospital's non-response means it has minimal acquisition costs for certain drugs and could support viewing those drug costs as ancillary or supportive.</li></ol><p>The agency is specifically seeking comments on these and other possible methodologies to interpret hospital non-responses to the survey for the purpose of setting payment rates in future rulemaking.</p><h3 id="addonpayment">Add-on Payment for Radiopharmaceutical Technetium-99m</h3><p>Radioisotopes are widely used in modern medical imaging, particularly for cardiac imaging and predominantly for the Medicare population. Technetium-99m (Tc-99m), the radioisotope used in most of such diagnostic imaging services, is produced through the radioactive decay of molybdenum-99 (Mo-99). The United States makes-up roughly half of the global demand for Mo-99. However, 100% of this radioisotope is produced outside of the United States.</p><p>In the CY 2025 OPPS final rule, CMS noted that the Department of Energy had raised concerns about an issue affecting the domestic supply chain for Mo-99 and Tc-99 that, left unaddressed, could cause payment inequity among outpatient hospital providers. That is, foreign Mo-99 production has historically been subsidized by foreign governments, resulting in prices below the true cost of production. These artificially low, foreign government-subsidized prices have created a disincentive for domestic investments in Mo-99 production infrastructure and a barrier to entry for new producers, including U.S. companies, which in turn has resulted in unreliable production and periodic shortages. Unlike many foreign producers, U.S. companies must price their products high enough to cover the full cost of operating their production facilities. Based in part on these differences in pricing models, U.S. companies have experienced challenges in competing with foreign producers for customers in the past.</p><p>As a result, in the CY 2025 final rule, CMS addressed this payment inequity by establishing a new add-on payment, starting Jan. 1, 2026, of $10 per dose for radiopharmaceuticals that use Tc-99m derived from domestically produced Mo-99. While CMS recognizes that there may not be domestic production of Mo-99 and Tc-99m in CY 2026, it believes it is better to have a regulatory framework for this policy in place for when domestic production of Tc-99m radiopharmaceuticals begins. This is because providers will be knowledgeable about the availability of additional payments for domestically sourced Tc-99m radiopharmaceuticals, and producers of domestic Mo-99 will have certainty that the Medicare OPPS payment policy takes into account the additional costs of domestic production of Mo-99.</p><p>To qualify for this add-on payment, at least 50% of the Mo-99 used in the Tc-99m generator that produces a dose of Tc-99m must be domestically produced. CMS proposes to adopt criteria for “domestically produced Mo-99” developed by the Department of Energy’s National Nuclear Security Administration.</p><p>The agency further proposes establishing a new HCPCS C-code C917X to identify Tc-99m from domestically produced non-Highly Enriched Uranium Mo-99. CMS notes that it expects that hospitals requesting this additional payment will perform standard due diligence to ensure that their claims are supported by internal records, such as payment certification and tracking.</p><h3 id="paymentforintensive">Payment for Intensive Outpatient and Partial Hospitalization Programs</h3><p>Intensive Outpatient Programs (IOP) and Partial Hospitalization Programs (PHP) are distinct outpatient behavioral health treatment programs that involve several hours of hospital-based psychiatric and substance use treatment services without inpatient admission. In the CY 2024 OPPS final rule, CMS established regulatory requirements to implement a new Medicare benefit category for IOP services as directed by the Consolidated Appropriations Act of 2023. Beginning Jan. 1, 2024, CMS established distinct PHP and IOP APC per diem rates, differentiating hospital-based programs and programs delivered by Community Mental Health Centers (CMHCs). Payment rates are based on the geometric mean per diem costs of a service day consisting of either four or more services or three services or fewer. For further details on this methodology, see AHA’s CY 2024 OPPS Final Rule <a href="/advisory/2023-11-17-hospital-outpatient-ambulatory-surgical-center-final-rule-cy-2024">Regulatory Advisory</a>.</p><p>In this rule, CMS proposes payment updates for both hospital-based IOP and PHP based on methodologies established in previous rulemaking. For CY 2026, CMS proposes to continue to use the latest available cost information and CY 2024 OPPS claims to update the payment rates for the APCs finalized in last year’s rule.</p><p>The agency also proposes revising the methodology for calculating IOP and PHP rates for CMHCs, specifically by applying the 40% Medicare PFS Relativity Adjuster. Under this methodology, CMS would establish CMHC IOP and PHP APC payment rates at 40% of the rates for hospital-based IOP and PHP APCs. The agency believes this process would align with that used for other grandfathered (nonexcepted) OPPS services furnished by nonexcepted off-campus HOPDs (i.e., the application of the Medicare PFS Relativity Adjuster) and reflect the differences between PHP and IOP costs in the hospital and CMHC settings. CMS would use the same calculations for CMHC outlier policies as previously finalized.</p><p>The table below shows the proposed APCs and calculated geometric mean per diem costs for CY 2026; this data will be used to inform payment rates and copayments in the final rule.</p><h3>Proposed CY 2026 IOP Geometric Mean Per Diem Costs</h3><table><thead><tr><th>CY 2025 APCs</th><th>Group Title</th><th>Geometric Mean Per Diem Costs</th></tr></thead><tbody><tr><td>5851</td><td>Intensive Outpatient (3 services) for CMHCs</td><td>$136.36</td></tr><tr><td>5852</td><td>Intensive Outpatient (4 or more services) for CMHCs</td><td>$169.84</td></tr><tr><td>5861</td><td>Intensive Outpatient (3 services) for Hospital-based IOPs</td><td>$340.90</td></tr><tr><td>5862</td><td>Intensive Outpatient (4 or more services) for Hospital-based IOPs</td><td>$424.60</td></tr><tr><td>5853</td><td>Partial Hospitalization (3 services) for CMHCs</td><td>$136.36</td></tr><tr><td>5854</td><td>Partial Hospitalization (4 or more services) for CMHCs</td><td>$169.84</td></tr><tr><td>5863</td><td>Partial Hospitalization (3 services) for Hospital-based PHPs</td><td>$340.90</td></tr><tr><td>5864</td><td>Partial Hospitalization (4 or more services) for Hospital-based PHPs</td><td>$424.60</td></tr></tbody></table><hr><h3 id="areawageindex">Area Wage Index</h3><p>The area wage index adjusts payments to reflect differences in labor costs across geographic areas. For CY 2026, CMS proposes to continue its policy of applying a 60% labor-related share to determine hospital outpatient payments.</p><p>In addition, as it has done in previous years, CMS proposes to adopt the final fiscal year (FY) inpatient PPS post-reclassified wage index as the calendar year wage index for the OPPS. Thus, any policies or adjustments finalized in the FY 2026 inpatient PPS final rule would be reflected in the final CY 2026 OPPS wage index. For example, consistent with the FY 2026 inpatient PPS proposed rule, CMS is proposing to discontinue the low-wage index hospital policy under the OPPS for CY 2026 and subsequent years.</p><p>For hospitals paid under the OPPS but not the inpatient PPS, CMS proposes to continue its longstanding policy to assign the wage index that would be applicable if the hospital were paid under the inpatient PPS, based on its geographic location and any applicable wage index adjustments.</p><p>For more information on proposed wage index policies for 2025, see the AHA FY 2026 inpatient PPS proposed rule <a href="/advisory/2025-05-07-inpatient-pps-proposed-rule-fy-2026">Regulatory Advisory</a>.</p><h3 id="ruralschadjustment">Rural SCH Adjustment</h3><p>CMS proposes to continue increasing payments to rural SCHs, including essential access community hospitals, by 7.1% for all services paid under the OPPS, except for separately payable drugs and biologicals, brachytherapy sources, items paid at charges reduced to costs, and devices paid under the pass-through payment policy. The adjustment is budget neutral to the OPPS and applied before calculating outliers and coinsurance.</p><h3 id="cancerhospital">Cancer Hospital Payment Adjustment</h3><p>For CY 2026, CMS proposes to continue to provide additional payments to cancer hospitals so that a cancer hospital’s payment-to-cost ratio (PCR) after the additional payments is equal to the weighted average PCR for the other OPPS hospitals — the target PCR. The change in these additional payments from year to year is budget-neutral.</p><p>For CY 2026, CMS proposes a target PCR of 0.87, the same PCR as non-cancer hospitals using the most recently submitted or settled cost report data, to determine the CY 2026 cancer hospital payment adjustment to be paid at cost report settlement. That is, the payment adjustments would be the additional payments needed to result in a PCR equal to 0.87 for each cancer hospital. Table 7 in the proposed rule shows the estimated hospital-specific payment adjustment for each of the 11 dedicated cancer centers, with increases in OPPS payments for 2026 ranging from 11.9% to 51.6%.</p><h3 id="comprensiveapcs">Comprehensive APCs</h3><p>There are currently 72 comprehensive APCs (C-APCs) that package an expanded number of related items and services on the same claim into a single payment for a comprehensive primary service under the OPPS. Each year, CMS reviews and revises the services within each APC group and the APC assignments under the OPPS.</p><p>After its annual review, CMS does not propose to convert any additional standard APCs to C-APCs in CY 2026. Thus, it proposes that the number of C-APCs for CY 2026 would remain at 72. These 72 C-APCs are listed in Table 2 in the proposed rule and displayed in Addendum J to the proposed rule (available on the CMS website).</p><p>For CY 2026, CMS requests comments regarding making refinements to the current C-APC complexity adjustment criteria. Specifically, CMS seeks feedback on the expansion of code combinations for complexity adjustments and the identification of clinically appropriate service pairings or clusters that are not currently included in complexity adjustment determinations. If there is an expansion of the complexity adjustment criteria, CMS also seeks comments specific to the cost and frequency thresholds in identifying code clusters that accurately reflect complexity and resource consumption code combinations routinely performed in hospital outpatient departments.</p><h4>Exclusion of Cell and Gene Therapies from C-APC Packaging</h4><p>CMS considers all items and services reported on a C-APC claim as integral, ancillary, supportive, dependent, and adjunctive to the primary service, and representative of the comprehensive service components.</p><p>CMS finalized a proposal for CY 2025 and subsequent years to exclude specific cell and gene therapies from C-APC packaging when those therapies are not functioning as integral, ancillary, supportive, dependent, or adjunctive to the primary C-APC service. As such, CMS continues to propose adding product-specific HCPCS codes as they are developed to the C-APC exclusion list. The current list of qualifying cell and gene therapy products is reflected in Table 1 in the proposed rule. The complete list of proposed exclusion categories is available as part of Addendum J with this proposed rule.</p><h3 id="rfi">RFI: Payment Policy for Software as a Service</h3><p>In the proposed rule, CMS issues an RFI on payment policies related to Software as a Service (Saas). The agency acknowledges that technology continues to evolve with the integration of new software-based technologies, like artificial intelligence in outpatient and physician settings. Historically, SaaS services were considered ancillary services, and payment was included in the underlying clinical service. Recently, CMS paid separately for SaaS outpatient services through New Technology APCs, although the payment methodology has not been standardized.</p><p>Based on stakeholder interest in more consistent payment options, the agency seeks feedback on payment policies for SaaS. Specifically, CMS requests comments on the factors for consideration when setting SaaS payment rates, how the agency should assess SaaS costs, data sources, and how CMS can best assess the quality and efficacy of SaaS technologies. CMS issued a similar request for information in the CY 2026 Physician Fee Schedule proposed rule.</p><h3 id="virtualdirect">Virtual Direct Supervision of Certain Rehabilitation and Diagnostic Services Furnished to Hospital Outpatients</h3><p>In CY 2025, CMS extended virtual supervision flexibilities for cardiac rehabilitation, intensive cardiac rehabilitation services and pulmonary rehabilitation services and diagnostic services. Specifically, it allowed direct supervision to be furnished via two-way, audio/visual communication technology (excluding audio only) for these services. In this rule, CMS proposes to extend these virtual supervision flexibilities for OPPS <em>permanently.</em></p><h3 id="proposedelimination">Proposed Elimination of the IPO List</h3><p>The IPO list was created to identify services for which Medicare will make payment only when furnished in the inpatient hospital setting because of the invasive nature of the procedures, the underlying physical condition of the Medicare patient, or the need for at least 24 hours of postoperative recovery time or monitoring before the patient can be safely discharged.</p><p><strong>For CY 2026 and subsequent years, CMS proposes to eliminate the IPO list in a 3-year transition, completing the elimination by Jan. 1, 2029.</strong> While in previous rulemakings, it agreed with commenters that the IPO list was necessary, it has now reconsidered comments from interested parties requesting that the IPO list be eliminated. CMS states that it no longer believes there is a need for the IPO list to identify services that require inpatient care. The agency agrees with past commenters’ views that a physician should use his or her clinical knowledge and judgment, together with consideration of the beneficiary’s specific needs, to determine whether a procedure can be performed appropriately in a HOPD or whether inpatient care is required, subject to the general coverage rules requiring that any procedure be reasonable and necessary. CMS also notes that this change would ensure maximum availability of services to beneficiaries in the outpatient setting.</p><p>Currently, there are 1,731 procedures/services included on the IPO list. <strong>The phase-out of the IPO list over three years would begin in CY 2026 with the removal of 285 services, mostly musculoskeletal, but also including 16 non-musculoskeletal services spanning cardiovascular, lymphatic, digestive, gynecological and endovascular procedures.</strong> Table 69 in the proposed rule presents the complete list of 285 services, including the CPT/HCPCS code, descriptors, proposed payment indicators, and APC. With this proposal, CMS further proposes establishing a 7-level Musculoskeletal Procedures APC series, allowing for the assignment of musculoskeletal procedures removed from the IPO list to an APC with a relevant range of estimated costs.</p><p>Additional related proposals upon which CMS solicits comments include:</p><ul><li>The elimination of the criteria used to determine whether procedures should be removed from the IPO list.</li><li>Whether three years is an appropriate timeframe for the transition.</li><li>Whether there are other services that CMS should consider for removal from the IPO list in the near term.</li><li>Whether to restructure or create any new APCs or C-APCs to allow for OPPS payment for services removed from the IPO list.</li></ul><h4>Effects on Beneficiary Cost Sharing</h4><p>CMS acknowledges stakeholder concerns that removing procedures from the IPO list and allowing them to be performed in outpatient settings under the OPPS could increase financial burdens for Medicare beneficiaries, particularly for complex services. Under current law, cost-sharing for each individual OPPS service (defined as a single APC) is capped at the Part A inpatient deductible for that year. However, some stakeholders have expressed concerns that if a beneficiary receives multiple separately payable outpatient services, the combined cost-sharing could exceed what would have been incurred had the care been provided in an inpatient setting.</p><p>In response, CMS notes that procedures removed from the IPO list are typically surgical and, when paid under OPPS, are usually assigned to a C-APC. This means they are treated as a single episode of care with one payment and one copayment, rather than generating multiple copayments for individual services. As a result, in most cases, beneficiaries should not face multiple copayments, and the inpatient deductible cap would apply to the overall claim.</p><h4>Two-midnight Rule Medical Review Activities Exemptions</h4><p>CMS proposes to continue its existing policy, which indefinitely exempts procedures removed from the IPO list from certain medical review activities related to the two-midnight policy. Per this policy, procedures removed from the IPO list are exempted from site-of-service claim denials and Beneficiary and Family-Centered Care Quality Improvement Organization referrals to Recovery Audit Contractors for noncompliance with the two-midnight rule, and RAC reviews of “patient status” (i.e., site-of-service). This exemption, which began in 2021, would remain in place for each procedure until the secretary determines it is more commonly performed in the outpatient setting than the inpatient setting. CMS is also seeking feedback on whether alternative exemption periods would be more appropriate.</p><p>CMS clarifies that while initial medical review contractors may still review these claims to educate providers, they would not deny claims based on noncompliance with site-of-service requirements under Medicare Part A. In addition, despite pausing some review activities, contractors will continue to respond to beneficiary quality-of-care complaints and assess the medical necessity of services, with the authority to deny claims if the service is found to be unreasonable or not medically necessary.</p><p>CMS believes that its enhanced ability to monitor outpatient safety and care quality supports the continuation of this exemption and is unlikely to negatively impact patient outcomes, but it invites public comments on any potential effects of eliminating the IPO list.</p><h3 id="proposednonopioid">Proposed Non-opioid Policy for Pain Relief Under the OPPS and ASC Payment System</h3><p>The Consolidated Appropriations Act of 2023 requires CMS to unpackage and provide separate payments for three years, beginning Jan. 1, 2025, for non-opioid treatments for pain relief. A non-opioid treatment for pain relief is defined as having “demonstrated the ability to replace, reduce, or avoid intraoperative or postoperative opioid use or the quantity of opioids prescribed in a clinical trial or through data published in a peer-reviewed journal.”</p><p>The agency proposes continuing the policies it finalized in the CY 2025 OPPS to provide temporary additional payments for certain non-opioid treatments for pain relief in the HOPD and ASC settings, without modification, through Dec. 31, 2027, consistent with statute.</p><p>CMS proposes that five drugs and six devices, listed in Table 82 in the proposed rule, would qualify as non-opioid treatments for pain relief. These products would be paid separately in both the HOPD and ASC settings. CMS requests comments and supporting documentation from interested parties on additional products that may qualify for separate payment under this provision.</p><h3 id="paymentforskin">Payment for Skin Substitute Products Under the OPPS</h3><p>Starting in CY 2026, CMS proposes to pay separately for certain groups of skin substitute products as supplies when they are used during a covered application procedure paid under the PFS in the non-facility setting or under the OPPS.</p><p>This proposal includes grouping skin substitutes that are not drugs or biologicals using three Food and Drug Administration (FDA) regulatory categories (PMAs, 510(k)s, and 361 HCT/Ps) to set payment rates. To accomplish this categorization and incorporation into OPPS payment policy, CMS proposes to create three new APCs for HCPCS codes describing skin substitute products organized by clinical and resource similarity and by their FDA regulatory pathway. CMS proposes an initial payment rate of $125.38 for each of the new proposed APCs.</p><p>The proposed APCs are:</p><ul><li>APC 6000 (PMA Skin Substitute Products).</li><li>APC 6001 (510(k) Skin Substitute Products).</li><li>APC 6002 (361 HCT/P Skin Substitute Products).</li></ul><h3 id="hospitaloutpatientoutlier">Hospital Outpatient Outlier Payments</h3><p>Outlier payments are added to the APC amount to mitigate hospital losses when treating high-cost cases. CMS again proposes establishing separate thresholds for hospitals and CMHCs. For CY 2026, CMS proposes setting the projected target for outlier payments at 1% of total OPPS payments. The agency proposes to allocate 0.01% of outlier payments to CMHCs for PHP and IOP outlier payments.</p><p>CMS continues to include both a fixed-dollar and a percentage outlier threshold. In CY 2026, it proposes to decrease the fixed-dollar threshold for outliers to $6,450 from $7,175 for CY 2025 to ensure that outlier spending does not exceed the outlier target.</p><p>Thus, to be eligible for an outlier payment in CY 2026, the cost of a hospital outpatient service would have to exceed 1.75 times the APC payment amount (the percentage threshold) and be at least $6,450 more than the APC payment amount. When the cost of a hospital outpatient service exceeds these applicable thresholds, Medicare would make an outlier payment that is 50% of the amount by which the cost of furnishing the service exceeds 1.75 times the APC payment rate.</p><h3 id="transitionalpassthrough">Transitional Pass-through Payments</h3><p>Congress created temporary additional, or “transitional pass-through payments,” for certain innovative medical devices, drugs and biologicals to ensure that Medicare beneficiaries have access to new technologies in outpatient care. For CY 2026, CMS projects that pass-through payments will be 0.59% of total OPPS payments (approximately $100 billion), or $587 million. This includes $571.8 million in pass-through payments for devices and $15.2 million for drugs and biologicals. These payments are implemented in a budget-neutral manner.</p><h3 id="beneficiarycoinsurance">Beneficiary Coinsurance</h3><p>Medicare law provides that the minimum coinsurance is 20% of the OPPS payment amount. The statute also limits a beneficiary’s actual cost-sharing amount for a service to the inpatient hospital deductible for the applicable year, which is yet to be determined for FY 2026. CMS estimates that the aggregate beneficiary coinsurance percentage will be 18.0% for all services paid under the OPPS in CY 2026.</p><h3 id="outpatientquality">Outpatient Quality Reporting Program</h3><p>CMS proposes several updates to the measure set used in the OQR, including the removal of four measures, the replacement of two measures with one new measure, and the modification of one measure to extend voluntary reporting. The table below summarizes finalized and proposed measures for the OQR Measure Set for the CYs 2026-2028 reporting periods, including each measure’s Consensus Based Entity (CBE) identifier (if the measure has been endorsed by a CBE).</p><h3>OQR Measures by Reporting Period</h3><table><thead><tr><th>Measure Name</th><th>CBE #</th><th>CY 2026</th><th>CY 2027</th><th>CY 2028</th></tr></thead><tbody><tr><td>OP-8: MRI Lumbar Spine for Low Back Pain</td><td>Endorsement Removed</td><td>X</td><td>Z</td><td> </td></tr><tr><td>OP-10: Abdomen CT – Use of Contrast Material</td><td>None</td><td>X</td><td>X</td><td>X</td></tr><tr><td>OP-13: Cardiac Imaging for Preoperative Risk Assessment for Non-Cardiac, Low-Risk Surgery</td><td>Endorsement Removed</td><td>X</td><td>Z</td><td> </td></tr><tr><td>OP-18: Median Time from ED Arrival to ED Departure for Discharged ED Patients</td><td>Endorsement Removed</td><td>X</td><td>X</td><td>Z</td></tr><tr><td>OP-22: Left Without Being Seen</td><td>Endorsement Removed</td><td>X</td><td>X</td><td>Z</td></tr><tr><td>OP-23: Head CT or MRI Scan Results for Acute Ischemic Stroke or Hemorrhagic Stroke who Received Heat CT or MRI Scan Interpretation within 45 Minutes of ED Arrival</td><td>0661</td><td>X</td><td>X</td><td>X</td></tr><tr><td>OP-29: Appropriate Follow-Up Interval for Normal Colonoscopy in Average Risk Patients</td><td>0658</td><td>X</td><td>X</td><td>X</td></tr><tr><td>OP-31: Cataracts: Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery</td><td>1536</td><td>X*</td><td>X*</td><td>X*</td></tr><tr><td>OP-32: Facility 7-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy</td><td>2539</td><td>X</td><td>X</td><td>X</td></tr><tr><td>OP-35: Admissions and ED Visits for Patients Receiving Outpatient Chemotherapy</td><td>3490</td><td>X</td><td>X</td><td>X</td></tr><tr><td>OP-36: Hospital Visits after Outpatient Surgery</td><td>2687</td><td>X</td><td>X</td><td>X</td></tr><tr><td>OP-37: OAS CAHPSa-e (five individual measures)</td><td>None</td><td>X</td><td>X</td><td>X</td></tr><tr><td>OP-38: COVID-19 Vaccination Coverage Among Health Care Personnel</td><td>3636</td><td>X</td><td>X</td><td>Z</td></tr><tr><td>OP-39: Breast Cancer Screening Recall Rates</td><td>None</td><td>X</td><td>X</td><td>X</td></tr><tr><td>OP-40: ST-Segment Elevation Myocardial Infarction (STEMI) eCQM</td><td>None</td><td>X</td><td>X</td></tr><tr><td>Risk-standardized Patient-reported Outcomes Following Elective Primary Total Hip and/or Total Knee Arthroplasty</td><td>None</td><td>X*</td><td>X*</td><td>X*</td></tr><tr><td>Excessive Radiation Dose or Inadequate Image Quality for Diagnostic Computed Tomography (CT) in Adults</td><td>3663e</td><td>X*</td><td>X**</td><td>X**</td></tr><tr><td>Patient Understanding of Key Information Related to Recovery After a Facility-Based Outpatient Procedure or Surgery PRO-PM</td><td>4210</td><td>X*</td><td>X</td><td>X</td></tr><tr><td>Hospital Commitment to Health Equity</td><td>None</td><td>Y</td><td>Y</td><td>Z</td></tr><tr><td>Screening for Social Drivers of Health (SDOH)</td><td>None</td><td>Y</td><td>Y</td><td>Z</td></tr><tr><td>Screen Positive Rate for SDOH</td><td>None</td><td>Y</td><td>Y</td><td>Z</td></tr><tr><td>Emergency Care Access & Timeliness</td><td>4625e</td><td> </td><td>Y*</td><td>Y</td></tr></tbody></table><p>X= Measure currently included in OQR</p><p>Y=Measure proposed for adoption</p><p>*=Voluntary reporting</p><p>**=Proposed for voluntary reporting</p><p>Z=Proposed for removal</p><hr><h4>Proposed Measure Removals</h4><p>CMS proposes to remove six measures from the OQR. Each of these measures, its proposed timeline for removal, and CMS’ rationale for its removal is listed below.</p><h5>COVID-19 Vaccination Coverage Among Healthcare Personnel</h5><p>CMS proposes to remove this measure beginning with the CY 2024 reporting period/CY 2026 payment determination. The measure was adopted in the CY 2022 OPPS/ASC final rule. Citing the end of the COVID-19 public health emergency as well as the decreasing number of deaths from the condition, CMS believes the costs and burdens of reporting this measure outweigh the benefits of its continued use in the program. If finalized, hospitals that did not report their CY 2024 reporting period data for this measure would not be penalized in the CY 2026 payment determination.</p><h5>Hospital Commitment to Health Equity</h5><p>CMS proposes to remove this measure beginning with the CY 2025 reporting period. The measure was adopted in the CY 2025 OPPS/ASC final rule. Citing the agency’s priority to re-focus quality reporting programs on measurable clinical outcomes as well as identifying quality measures on topics of prevention, nutrition and well-being, CMS believes that this structural measure results in more burden for hospitals than benefit. If finalized, hospitals that do not report their CY 2025 reporting period data would not be penalized in the CY 2027 payment determination.</p><h5>Screening for and Screen Positive Rate for SDOH</h5><p>CMS proposes to remove these two measures beginning with the CY 2025 reporting period. The measures were adopted in the CY 2025 OPPS/ASC final rule. Data collection for these measures was scheduled to begin voluntarily in 2025 and mandatory in 2026. However, citing the high costs of manual screening processes, data storage, staff training and workflow alterations, as well as the questionable usefulness of aggregated results gleaned by the measures, CMS believes the burdens associated with them outweigh their benefit. If finalized, hospitals would not be required to collect or submit data for these measures.</p><h5>Median Time for Discharged ED Patients and Left Without Being Seen</h5><p>CMS proposes to remove these two measures beginning with the CY 2028 reporting period. As described in the next section, the numerators overlap with those included in the proposed Emergency Care Access & Timeliness measure and would thus be duplicative. In addition, these two measures are informed by chart abstraction, which CMS believes is more burdensome than the proposed eCQM.</p><h4>Proposed Adoption of the Emergency Care Access & Timeliness eCQM</h4><p>CMS proposes to adopt this measure related to ED throughput into the OQR beginning with voluntary reporting in CY 2027 and mandatory reporting in CY 2028 and beyond. An eCQM, the measure is informed by data extracted electronically from the hospital’s EHR.</p><p>The measure calculates the proportion of all ED encounters during a 12-month period where the patient experiences any one of the following:</p><ol><li>Waited more than one hour after arrival in the ED to be placed in a treatment room/area for evaluation.</li><li>Left the ED without being evaluated.</li><li>Boarded in the ED for longer than four hours, as defined by the time between the Decision to Admit order and ED Departure for admitted patients, excluding encounters with ED observation stays.</li><li>Had an ED length of stay longer than eight hours, as defined by the time from ED arrival to ED physical departure, excluding encounters with ED observation stays.</li></ol><p>Raw measure scores are standardized by ED case volume using z-scores; this process provides a comparison to the average for EDs with similar volumes (in strata of 20,000 ED visits). For CMS Certification Numbers with more than one ED, the adjusted scores are combined as a weighted average. Results are stratified into four groups based on age (18 years and older, under 18 years) and whether or not the patient received a principal diagnosis of mental illness (not including substance use disorder diagnoses).</p><p>The measure received conditional endorsement by a CBE in February 2025. The conditions included monitoring of outcomes by the measure developer within three years, such as unintended consequences to patients and providers, and identification of data elements that may address challenges with the measure.</p><h4>Proposed Modification of Excess Radiation Dose eCQM</h4><p>CMS proposes extending the voluntary reporting period for this measure indefinitely. The measure was originally adopted in the CY 2024 OPPS/ASC final rule, beginning with voluntary reporting in CY 2025 and mandatory reporting beginning in CY 2027. CMS makes this proposal in response to concerns from the field about the financial burden and operational infeasibility of translating CT radiology data into standardized eCQM-consumable data for the measure.</p><h4>Proposed Extraordinary Circumstances Exception (ECE) Policy Updates</h4><p>CMS can grant exceptions to data submission deadlines and requirements for quality reporting programs in the event of extraordinary circumstances beyond the control of the facility (hospital, REH or ASC), such as natural disasters. In this rule, CMS proposes to update regulations to specify that the agency can provide an extension of time to comply with data reporting requirements as part of an ECE. Under this proposal, a facility may request an ECE within 30 calendar days of the date of the extraordinary circumstance; this is a change from the current 90-day window for these programs. Additionally, CMS proposes to be able to grant an ECE to facilities that have not requested one if the agency determines that either a systemic CMS problem or an extraordinary circumstance has affected an entire region or locale.</p><h4>RFI: Measure Concepts Under Consideration for Future Years — Well-Being and Nutrition</h4><p>CMS seeks comments on tools and measures that assess overall health, happiness, and satisfaction in life, and optimal nutrition and preventive care. The agency intends to use this input to inform future measure development efforts.</p><h2 id="cy2026asc">CY 2026 ASC Proposed Rule Changes</h2><h3 id="ascpaymentupdate">ASC Payment Update</h3><p>For CYs 2019 through 2023, CMS adopted a policy to update the ASC payment system using the hospital market basket. In light of the impact of the COVID-19 public health emergency on health care utilization, the agency extended this policy through CYs 2024 and 2025. In this proposed rule, the agency proposes extending the utilization of the hospital market basket update as the update factor for the ASC payment system for one additional year, through CY 2026.</p><p>As such, CMS proposes to increase payment rates by 2.4% for ASCs that meet the quality reporting requirements under the ASC QRP. ASCs that fail to meet their quality reporting requirements would have a 2.0 percentage point reduction to this market basket update for CY 2026, resulting in a 0.4% update. The proposed CY 2026 ASC conversion factor is $56.207 for ASCs that successfully meet the quality reporting requirements. For ASCs not meeting quality reporting requirements, CMS proposes a conversion factor of $55.109.</p><h3 id="proposedchangestothelist">Proposed Changes to the List of ASC-covered Surgical Procedures</h3><p>CMS proposes revising the regulatory criteria used to evaluate potential additions to the ASC covered procedures list (CPL). This would include modifying the general standard criteria and eliminating five of the general exclusion criteria and instead moving them into a new section as nonbinding physician considerations for patient safety.</p><p>Utilizing these revised criteria, CMS proposes adding, beginning in CY 2026, 276 procedure codes spanning the musculoskeletal, respiratory, cardiovascular, digestive, genitourinary, endocrine and nervous systems to the ASC CPL. It would also add an additional 271 procedure codes to the ASC CPL that are proposed for removal from the IPO list for CY 2026. These codes, including their long descriptors and proposed payment indicator assignments, are listed in Tables 80 and 81 with this proposed rule.</p><h3 id="ascqualityreporting">ASC Quality Reporting Program</h3><p>CMS proposes adopting the same three health equity-focused measures in the ASCQR as proposed for the OQR and adopting one new measure. In addition, CMS issues a RFI on the development of new frameworks for quality reporting in ASCs.</p><p>The table below summarizes finalized measures for the ASCQR Measure Set for the CY 2025-CY 2026 payment determinations, including each measure’s CBE identifier (if the measure has been endorsed by a CBE).</p><h3>Proposed and Finalized ASCQR Measures by Reporting Year</h3><table><thead><tr><th>Measure Name</th><th>CBE #</th><th>CY 2026</th><th>CY 2027</th><th>CY 2028</th></tr></thead><tbody><tr><td>ASC-1: Patient Burn</td><td>Endorsement Removed</td><td>X</td><td>X</td><td>X</td></tr><tr><td>ASC-2: Patient Fall</td><td>Endorsement Removed</td><td>X</td><td>X</td><td>X</td></tr><tr><td>ASC-3: Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure, Wrong Implant</td><td>Endorsement Removed</td><td>X</td><td>X</td><td>X</td></tr><tr><td>ASC- 4: All-Cause Hospital Transfer/Admission</td><td>Endorsement Removed</td><td>X</td><td>X</td><td>X</td></tr><tr><td>ASC-9: Endoscopy/Polyp Surveillance: Appropriate Follow-Up Interval for Normal Colonoscopy in Average Risk Patients</td><td>0658</td><td>X</td><td>X</td><td>X</td></tr><tr><td>ASC-11: Cataracts: Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery</td><td>Endorsement Removed</td><td>X*</td><td>X*</td><td>X*</td></tr><tr><td>ASC-12: Facility 7-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy</td><td>2539</td><td>X</td><td>X</td><td>X</td></tr><tr><td>ASC-13: Normothermia Outcome</td><td>None</td><td>X</td><td>X</td><td>X</td></tr><tr><td>ASC-14: Unplanned Anterior Vitrectomy</td><td>None</td><td>X</td><td>X</td><td>X</td></tr><tr><td>ASC-15a-e: OAS CAHPS (five individual measures)</td><td>None</td><td>X</td><td>X</td><td>X</td></tr><tr><td>ASC-17: Hospital Visits after Orthopedic ASC Procedures</td><td>3470</td><td>X</td><td>X</td><td>X</td></tr><tr><td>ASC-18: Hospital Visits after Urology ASC Procedures</td><td>3366</td><td>X</td><td>X</td><td>X</td></tr><tr><td>ASC-19: Facility-Level 7-Day Hospital Visits after General Surgery Procedures Performed at ASCs</td><td>3357</td><td>X</td><td>X</td><td>X</td></tr><tr><td>ASC-20: COVID-19 Vaccination Coverage Among Health Care Personnel</td><td>3636</td><td>X</td><td>X</td><td>Z</td></tr><tr><td>Risk-Standardized PRO-PM Following Elective THA/TKA in the ASC</td><td>None</td><td>X*</td><td>X*</td><td>X*</td></tr><tr><td>Facility Commitment to Health Equity</td><td>None</td><td>Z</td><td>Z</td><td>Z</td></tr><tr><td>Screening for Social Drivers of Health</td><td>None</td><td>Z</td><td>Z</td><td>Z</td></tr><tr><td>Screen Positive Rate for Social Drivers of Health</td><td>None</td><td>Z</td><td>Z</td><td>Z</td></tr><tr><td>Patient Understanding of Key Information Related to Recovery After a Facility-Based Outpatient Procedure or Surgery</td><td>4210</td><td> </td><td>Y*</td><td>Y*</td></tr></tbody></table><p>X= Measure included</p><p>Y= Measure proposed for adoption</p><p>Z= Measure proposed for removal</p><p>*=Voluntary reporting</p><hr><h4>Proposed Measure Removals</h4><p>CMS proposes to remove the same three health equity-related measures from the ASCQR as proposed for the OQR. Beginning with the CY 2025 reporting period, CMS would no longer use the Facility Commitment to Health Equity, Screening for SDOH, and Screen Positive Rate for SDOH measures. The proposals are identical to those for the OQR (see above).</p><h4>Proposed Adoption of the Patient Understanding of Key Information Related to Recovery After a Facility-Based Outpatient Procedure or Surgery Patient Reported Outcome-Based Performance Measure</h4><p>CMS proposes to adopt this patient-reported outcome measure with voluntary reporting in CY 2027 and CY 2028 and mandatory reporting beginning in CY 2029. The measure was adopted for the OQR in the CY 2025 OPPS/ASC final rule.</p><p>The measure reports the average score of a patient’s ratings on a three-domain, nine-item post-operative survey regarding the clarity of clinical information given before, during, and after an outpatient surgery or procedure. The domains include:</p><ol><li>Applicability to patient needs: whether the information the patient received about their recovery considered their health needs, such as medical conditions, and personal situation, such as transportation needs and financial status (on a scale of yes, somewhat, or no).</li><li>Medications: how clear the information the patient received about their recovery was regarding the purpose, potential side effects, and course of new medications (on a scale of very, somewhat, or not clear or does not apply).</li><li>Daily activities: how clear the information the patient received about their recovery was regarding changes to diet and physical activities, when they could return to work, and when they could drive (on a scale of very, somewhat, or not clear or does not apply).</li></ol><p>Data would be collected via web-based (email or text message) survey administered two to seven days after the surgery or procedure; patients would have 65 days to respond for responses to be considered valid. CMS notes that ASCs could administer the survey directly or work with authorized third-party vendors, although the survey is currently specified to be anonymous. CMS acknowledges the issues with anonymous surveys, including limited ability to follow up and potentially necessitating the use of a third-party vendor. The measure has been tested in English and Spanish and was endorsed by the CBE in 2024.</p><p>ASCs would submit their data in aggregate numerators and denominators by May 15 of the year prior to the applicable payment determination year in CMS’ online system. ASCs would be required to collect at least 200 completed surveys to ensure measure reliability; if the ASC is unable to do so, it would be required to submit data on survey responses from all completed surveys received. If the ASC has a large patient population and anticipates collecting more than 200 completed surveys, it would be allowed to perform random sampling of its patient population to administer the survey; otherwise, ASCs would be required to offer all patients meeting the measure’s denominator specifications the opportunity to complete the survey.</p><h2 id="otherqualityrelated">Other Quality-Related Proposals</h2><h3 id="proposedmodifications">Proposed Modifications to the Overall Star Rating Methodology to Emphasize Safety of Care</h3><p>To calculate a hospital’s Overall Star Rating, CMS uses hospital performance on measures in five categories: Safety, Mortality, Readmissions, Patient Experience, and Timely & Effective Care. To have a score calculated for each category (or “group”), a hospital must report at least three measures in that category; in addition, to have an Overall Star Rating, a hospital must report at least three measures in either the Safety or Mortality group. For details on how the Overall Star Ratings are calculated, see AHA’s 2022 <a href="/2022-07-13-hospital-star-ratings-details-help-you-prepare-july-update?check_logged_in=1">Member Advisory</a>.</p><p>In the CY 2025 OPPS/ASC proposed rule, CMS requested feedback on how it could more heavily emphasize the Safety measure group.</p><p>Based on analysis of the July 2024 calculation of Overall Star Ratings, CMS found that there was generally a strong relationship between hospital performance on measures in the Safety group and the hospital’s Overall Star Rating (i.e., hospitals that had good scores on measures related to patient safety tended to also have higher star ratings, and vice versa). However, the agency found that a small number of hospitals (14, or 0.5 percent of all rated hospitals) had scores in the bottom quartile of performance on Safety measures and still received the highest Overall Star Rating of five stars. CMS interprets this information to mean that it is possible for a hospital to be rated highly while delivering unsafe patient care and thus believes that a methodological change to increase the importance of the Safety measure group is appropriate.</p><p>To address this issue, CMS proposes making methodological updates to the Star Ratings in two phases. First, in 2026, CMS would limit hospitals in the lowest quartile of scores in the Safety group that were eligible to receive a score for that group (that is, hospitals that reported at least three measures in that group) to a maximum of 4 stars. Using this cap on stars as a transition to a permanent change, CMS would implement a blanket reduction in score of 1 star for hospitals in the lowest quartile of scores in the Safety group that were eligible to receive a score beginning in 2027. The minimum possible Overall Hospital Star Rating would remain one star.</p><p>Based on a simulation using 2024 data, just 14 hospitals would be affected by the first stage of the methodological change (cap on Stars), while 459 hospitals (out of 2,847 receiving a Star Rating) would be affected by the second stage (blanket 1-Star reduction). According to CMS’ analysis, affected hospitals would more likely be urban, large (more than 100 beds), and non-specialty; this follows the methodology for the Overall Star Rating, as these hospitals are more likely able to report data for all measures and thus be eligible for scores in the Safety group.</p><h3 id="rehquality">REH Quality Reporting Program</h3><p>The Consolidated Appropriations Act of 2021 established requirements for a new type of provider, the REH, for payment beginning Jan. 1, 2023. As part of this program, an REH must submit quality measure data for the REH Quality Reporting Program (REH QR). In this rule, CMS proposes to remove several of the same measures proposed for removal from the OQR and ASCQR, establish new requirements for REH reporting of eCQMs, and adopt one new eCQM beginning CY 2027. Proposed and Finalized REHQR Measures by Reporting Year</p><table><thead><tr><th>Measure Name</th><th>CBE #</th><th>CY 2026</th><th>CY 2027</th><th>CY 2028</th></tr></thead><tbody><tr><td>Abdomen Computed Tomography (CT) – Use of Contrast Material</td><td>None</td><td>X</td><td>X</td><td>X</td></tr><tr><td>Median Time from ED Arrival to ED Departure for Discharged ED Patients</td><td>None</td><td>X</td><td>X*</td><td>X*</td></tr><tr><td>Risk Standardized Hospital Visits within 7 Days After Hospital Outpatient Surgery</td><td>2687</td><td>X</td><td>X</td><td>X</td></tr><tr><td>Facility 7-Day Risk-Standardized Hospital Visit Rate After Outpatient Colonoscopy</td><td>2539</td><td>X</td><td>X</td><td>X</td></tr><tr><td>Hospital Commitment to Health Equity</td><td>None</td><td>Z</td><td>Z</td><td>Z</td></tr><tr><td>Screening for Social Drivers of Health</td><td>None</td><td>Z*</td><td>Z</td><td>Z</td></tr><tr><td>Screen Positive Rate for Social Drivers of Health</td><td>None</td><td>Z*</td><td>Z</td><td>Z</td></tr><tr><td>Emergency Care Access & Timeliness</td><td>4625e</td><td> </td><td>Y*</td><td>Y*</td></tr></tbody></table><p>X= Measure included in program</p><p>Y= Measure proposed for adoption</p><p>Z= Measure proposed for removal</p><p>*=Voluntary or Optional reporting</p><hr><h4>Proposed Measure Removals</h4><p>CMS proposes to remove the same three health equity-related measures from the REHQR as proposed for the OQR and ASCQR. Beginning with the CY 2025 reporting period, CMS would no longer use the Hospital Commitment to Health Equity, Screening for SDOH, and Screen Positive Rate for SDOH measures. The proposals are identical to those for the OQR (see above).</p><h4>Proposed Adoption of the Emergency Care Access & Timeliness eCQM</h4><p>CMS proposes to adopt this measure related to ED throughput into the REHQR beginning with optional reporting in CY 2027. The same measure is being proposed for adoption in the OQR and is described above.</p><p>Unlike in the OQR, CMS proposes that REHs may choose to report this measure or the Median Time for Discharged ED Patients measure. The measure was tested at only one REH; further, CMS acknowledges the differences in EHR infrastructure across REHs. Accordingly, CMS believes allowing REHs to choose between reporting the new eCQM or the chart-abstracted measure currently used in the program will provide greater flexibility for facilities.</p><h4>eCQM Submission Requirements</h4><p>With the proposed introduction of eCQMs into the REHQR, CMS proposes to establish corresponding eCQM data submission and reporting requirements. These requirements would apply to the proposed Emergency Care Access & Timeliness measure if adopted as proposed, and align with requirements of the OQR, Inpatient Quality Reporting Program, and Medicare Promoting Interoperability Program.</p><p>Policies include:</p><ul><li>Utilization of technology certified to the Office of National Coordinator for Health Information Technology’s health IT most recent certification criteria for all available eCQMs under the REHQR program.</li><li>Submission of eCQM data via the QRDA Category I file format, either by using third parties to submit files on their behalf or by using abstraction or pulling data from non-certified sources to input into certified EHR technology for reporting.</li><li>Submission of zero denominator qualifies as a successful submission.</li><li>Case threshold exemption declaration if an REH’s EHR system has five or fewer outpatient encounters or discharges per quarter or 20 or fewer per year across Medicare and Medicaid.</li><li>Data submission by May 15 of the following year for the applicable reporting period.</li><li>Application of the review and corrections period to eCQM data.</li></ul><h2 id="otherproposals">Other Proposals</h2><h3 id="marketbasedweights">Market-based Weights for the Inpatient PPS</h3><p>In the FY 2021 inpatient PPS final rule, CMS finalized a requirement that hospitals report the median payer-specific charge negotiated by Medicare-severity diagnosis-related group (MS-DRG) with Medicare Advantage organizations (MAOs) on their Medicare cost reports. This information was intended to be used to set the inpatient PPS relative weights beginning in FY 2024. These policies were repealed one year later.</p><p>However, CMS is now proposing to collect market-based payment rate data on the Medicare cost report for cost reporting periods ending on or after Jan. 1, 2026. Hospitals would use the payer-specific negotiated charges from their most recent machine-readable file (MRF) published prior to the submission of their cost report to report the median payer-specific negotiated charge that they negotiated with their MAOs. CMS cites the requirements in sections 1815(a) and 1833(e) of the Act as the authority under which it is requiring this information to be furnished. These provisions provide that no Medicare payments will be made to a provider unless it has furnished the information, as may be requested by the secretary, to determine the amount of payments due to the provider under the Medicare program.</p><p>The proposed rule provides a 4-step process for determining the weighted median payer-specific negotiated charge by MAO by MS-DRG from the hospital’s most recent MRF. If the payer-specific negotiated charge is based on a percentage or algorithm, the hospital would substitute the dollar amount for the percentage or algorithm. Negotiated charges that represent capitated payment are excluded. If the payer-specific negotiated charge is not by MS-DRG, the hospital would reclassify the case to an MS-DRG rate using the MS-DRG Grouper (software that uses information on each claim to classify or group a case to an MS-DRG).</p><p>These requirements would apply to subsection (d) hospitals in the 50 states and Puerto Rico. As such, they would not apply to, for example, critical access hospitals, rural emergency hospitals, children’s hospitals or cancer hospitals. Maryland hospitals would be subject to these reporting requirements once the Maryland Total Cost of Care Model ends.</p><h3 id="changestothehospitalprice">Changes to the Hospital Price Transparency Requirements</h3><p>CMS proposes several changes to the Hospital Price Transparency requirements, specifically related to the machine-readable files (MRFs) and enforcement processes.</p><p>These changes include four new required data elements for payer-specific negotiated charges based on a percentage or algorithm:</p><ul><li>Median allowed amount.</li><li>10th percentile allowed amount.</li><li>90th percentile allowed amount.</li><li>Count of all allowed amounts.</li></ul><p>CMS also proposes two new general data elements:</p><ul><li>The name of the hospital leader responsible for overseeing MRF creation and attesting to the file’s completeness and accuracy.</li><li>The hospital’s National Provider Identifier(s).</li></ul><p>In addition, CMS proposes a new attestation statement and an optional change to the civil monetary penalty process. These changes build on CMS’ previous updates to these requirements, including the substantial changes finalized in the CY 2024 OPPS/ASC rule.</p><h4>New Allowed Amount Data Elements</h4><p>CMS proposes requiring several new MRF data elements in instances when payer-specific negotiated charges are based on a percentage or algorithm, beginning Jan. 1, 2026. The new data elements would be the median allowed amount, the 10th percentile allowed amount, the 90th percentile allowed amount, and a count of all allowed amounts. These data elements would replace the “estimated allowed amount” in the machine-readable files, which was added in the final CY 2024 OPPS/ASC rule and went into effect Jan. 1, 2025. CMS argues these changes are necessary to address ongoing confusion around the “estimated allowed amount,” citing recent audits and public feedback received since the value went into effect. CMS also notes that these changes are consistent with the recent <a href="/advisory/2025-02-26-administration-releases-executive-order-health-care-price-transparency">executive order on price transparency</a>.</p><p>To create more consistency across calculations, CMS proposes requiring a specific methodology to calculate these values, including a set lookback period and data source.</p><h5>Methodology</h5><p>To calculate each of the new data elements, CMS would require hospitals to calculate a <em>total allowed amount,</em> defined as the total amount a hospital was reimbursed by a third-party payer for an item, service or service package. This value is necessary for the calculations but would not need to be encoded in the machine-readable files.</p><p>For the <em>count of allowed amounts,</em> hospitals would encode the total number of non-zero allowed amounts within the claims transaction data set (discussed in more detail below). This count would not include claims where the payment amount is zero, for example, when the service is provided in conjunction with a mix of other services. CMS argues that including the count will provide necessary context for patients and researchers assessing the median, 10th percentile, and 90th percentile data elements.</p><p>For the <em>median, 10th percentile,</em> and <em>90th percentile allowed amounts,</em> the hospital would need to calculate the median, 10th percentile and 90th percentile of the total allowed amount using the count of allowed amounts. Should these calculations fall between two observed allowed amounts (i.e., in instances when the count of allowed amounts is an even number), the encoded value should be the higher of the observed allowed amount values. In other words, if the allowed amounts were: $20, $20, $30, $40, the median allowed amount for this purpose would be $30, not $25. CMS expects that providing this range of numbers will give patients and researchers valuable insights into what to expect in terms of a final payment amount, while keeping the range narrow enough to exclude most outlier payments.</p><p>Should a hospital have no valid claims remittance history for an item, service or service package for a particular payer and plan, they should encode 0 as the <em>count of allowed amounts</em> value and leave the <em>median, 10th percentile and 90th percentile</em> fields blank. In this instance, the hospital should explain why there is insufficient data to calculate the data elements in the <em>additional notes</em> field. In instances when hospitals cannot calculate the value due to a new or revised payer contract, CMS proposes requiring hospitals to encode “new or recently revised payer contract” in the <em>additional notes</em> field.</p><h5>Data Source</h5><p>CMS proposes to require hospitals to use electronic data interchange (EDI) 835 electronic remittance advice (ERA) transaction data to calculate the new data elements.</p><h5>Lookback Period</h5><p>CMS proposes to require hospitals to base their calculations, whenever possible, on EDI 835 ERA transaction data from the period 12 months prior to posting the MRF. However, in instances when the contract terms change during the 12-month period, the lookback period should only include the months that include allowed amounts based on the current contract terms. CMS acknowledges that transaction data can lag at times and notes that hospitals are only expected to use the data available at the time the MRF is created.</p><p>CMS seeks comment on these new data elements, as well as the methodology, data source, and lookback period. In particular, CMS questions whether a range of counts would suffice, rather than encoding the exact count. CMS also ask whether the 10th and 90th percentiles are the correct outer bounds of the allowed amount range to provide a reasonable expectation of variance while eliminating outliers.</p><h4>Updated Attestation Language</h4><p>CMS also proposes updating the required affirmation statement that hospitals must attest to in their machine-readable files, beginning Jan. 1, 2026. The new attestation would state: “The hospital has included all applicable standard charge information in accordance with the requirements of § 180.50, and the information encoded is true, accurate, and complete as of the date in the file. The hospital has included all payer-specific negotiated charges in dollars that can be expressed as a dollar amount. For payer-specific negotiated charges that cannot be expressed as a dollar amount in the machine-readable file or not knowable in advance, the hospital attests that the payer-specific negotiated charge is based on a contractual algorithm, percentage or formula that precludes the provision of a dollar amount and has provided all necessary information available to the hospital for the public to be able to derive the dollar amount, including, but not limited to, the specific fee schedule or components referenced in such percentage, algorithm or formula.”</p><p>If finalized, this affirmation statement would replace the current affirmation statement declaring that a hospital has made a good faith effort to ensure that the machine-readable file data is true, accurate and complete. CMS argues that updating the affirmation statement language would provide greater assurance to CMS auditors, patients, and researchers that the machine-readable files are complete and accurate. CMS also states that this language establishes CMS’ expectation that hospitals include all available information needed to derive payer-specific negotiated rates in their machine-readable files.</p><p>In addition, CMS proposes to add a new general data element to the machine-readable file, <em>attester name,</em> which would be defined as the hospital CEO, president, or alternative senior official designated to oversee the creation of the machine-readable file and attest to its accuracy and completeness.</p><p>CMS notes that the new attestation language and data element do not change monitoring or enforcement of these requirements and that the False Claims Act is outside of the scope of these proposed changes.</p><p>CMS seeks comments on these proposals.</p><h4>New National Provider Identifier (NPI) General Data Element</h4><p>CMS proposes to require hospitals to encode a new NPI general data element in their machine-readable files, beginning Jan. 1, 2026. Specifically, CMS would require hospitals to include any active Type 2 NPI(s) that have a primary taxonomy code beginning with “28” or “27” in their machine-readable file. CMS argues that including a standard identifier would better allow for cross-comparison between the hospital machine-readable files and other data sources, including the insurer machine-readable files. CMS seeks comments on this proposal, including whether another standard identifier should be considered.</p><h4>Changes to Civil Monetary Penalties (CMP)</h4><p>CMS proposes that the CMP amount be reduced by 35% in certain instances when a hospital admits to a price transparency violation and waives its right to an administrative law judge (ALJ) hearing. CMS notes that the CMP reduction would not be available should the violation continue. The right to an ALJ hearing would still be waived, however, and would not be available to the hospital. In addition, hospitals would be ineligible to receive the reduced CMP if the violation is due to the hospital failing to disclose a machine-readable file and/or a shoppable service list or price estimator tool.</p><p>CMS argues that this change would help to expedite CMP payments. In the proposed rule, CMS expresses concerns that 20 out of the 27 hospitals that have received a CMP notice to date have appealed the decision to an ALJ, which has delayed payment of the CMPs. CMS also argues that this opportunity would be beneficial to hospitals as they would incur a lower CMP and would avoid expending resources on the ALJ process.</p><p>CMS seeks comments on this proposal.</p><h4>Burden Estimate</h4><p>CMS estimates that hospitals will only incur a one-time cost of $478.08 per hospital to implement the proposed changes to the machine-readable files. This estimate is based on CMS’ assumption that hospitals have already built the necessary infrastructure to easily create the new required data elements. In total, CMS calculates a total national cost of $3,545,441.28 ($478.08 × 7,416 hospitals).</p><h3 id="medicarepartbdrugs">Medicare Part B Drugs Without a Medicaid National Drug Rebate Agreement</h3><p>CMS proposes that manufacturers or labelers of identified covered outpatient drugs who do not have in effect a Medicaid National Drug Rebate Agreement (NDRA) and who do not enter into one will no longer receive Medicare Part B payment for the drugs, which includes payment made under the OPPS and ASC payment systems. Per statutory requirements, to receive a payment for a covered outpatient drug under Medicare Part B, the manufacturer must have a Medicaid NDRA in effect.</p><p>In their review, CMS identified 20 HCPCS codes describing single-source drugs, biologicals and radiopharmaceuticals that are manufactured by labelers without a Medicaid NDRA. If manufacturers do not enter a Medicaid NDRA, HCPCS codes will be assigned a non-payable status by Medicare (i.e., OPPS status indicator of E1 and ASC payment indicator of B5). CMS lists these single-source drugs, biologicals, and radiopharmaceuticals in Table 66 in the proposed rule. No effective date is specified for this policy.</p><h3 id="graduatemedicaleducation">Graduate Medical Education Accreditation</h3><p>To receive direct graduate medical education (GME) and indirect medical education payments from Medicare, hospitals must be in an “approved medical residency training program.” A GME program may be an approved medical residency training program if it is accredited by the Accreditation Council on Graduate Medical Education (ACGME).</p><p>In this rule, CMS indicates that ACGME has identified “diversity, equity, and inclusion” as a primary value of the organization and a central component of its vision for graduate medical education. The rule states that many such diversity, equity and inclusion programs unlawfully discriminate against Americans based on race. Therefore, the agency says to ensure compliance with federal law, it proposes that accreditors may not require, as part of accreditation, or otherwise encourage institutions to put in place, diversity, equity and inclusion programs that encourage unlawful discrimination based on race, beginning Jan. 1, 2026. In addition, the rule indicates that CMS may recognize other organizations that meet or exceed Medicare’s requirements as accreditors to increase the potential for competition in the accreditation space and improve the quality of the accreditation process.</p><h3 id="allinclusive">All-inclusive Rate Add-on Payment for High-Cost Drugs Provided by Indian Health Services and Tribal Facilities</h3><p>Currently, the Indian Health Service (IHS) and tribal outpatient departments are excluded from the Medicare OPPS and are paid the Medicare outpatient hospital all-inclusive rate (AIR). The IHS determines the AIR from cost reports and updates the rate annually. However, IHS and tribal hospitals have increasingly provided higher-cost drugs along with more complex and expensive services, such as cancer-related services. Therefore, beginning on Jan. 1, 2025, CMS began separately pay IHS and tribal hospitals for high-cost drugs furnished in hospital outpatient departments through an add-on payment in addition to the AIR. CMS proposes to continue this policy in CY 2026.</p><h2 id="furtherquestions">Further Questions</h2><p>CMS will accept comments on the proposed rule until Sept. 15, 2025. The final rule will be published around Nov. 1, and the policies and payment rates will generally take effect Jan. 1, 2026.</p><p>If you have further questions, contact Roslyne Schulman, AHA’s director of outpatient payment policy, at <a href="mailto:rschulman@aha.org?subject=RE: Regulatory Advisory: Hospital Outpatient, Ambulatory Surgical Center Proposed Rule for CY 2026">rschulman@aha.org</a>.</p></div><div class="col-md-4"><a href="/system/files/media/file/2025/07/Regulatory-Advisory-Hospital-Outpatient-Ambulatory-Surgical-Center-Proposed-Rule-for-CY-2026.pdf" target="_blank" title="Click here to download the Regulatory Advisory: Hospital Outpatient, Ambulatory Surgical Center Proposed Rule for CY 2026 PDF."><img src="/sites/default/files/inline-images/Page-1-Regulatory-Advisory-Hospital-Outpatient-Ambulatory-Surgical-Center-Proposed-Rule-for-CY-2026.png" data-entity-uuid="da7c207b-59a3-4297-81e9-d5d5c971be9f" data-entity-type="file" alt="Hospital Outpatient, Ambulatory Surgical Center Proposed Rule for CY 2026 page 1." width="695" height="900"></a></div></div></div> table, th, td { border: 1px solid; } tr:nth-child(even) { background-color: #b9d9eb33; } th { background-color: #002855; color: white; } div.sticky { position: sticky; top: 0; } .meta.custom-lock-position { position: relative; top: 0px; right: inherit; display: block; float: right; } .views-field-title { font-weight: bold; } .views-field-created { color: #000000 !important; } .views-row { margin-bottom: 20px; } .toc-indent { margin-left: 20px; } Mon, 28 Jul 2025 13:43:00 -0500 Ambulatory Surgical Center (ASC) /special-bulletin/2024-11-04-special-bulletin-cms-outpatient-pps-and-asc-final-rule-cy-2025 <div class="container"><div class="row"><div class="col-md-8"><p>The Centers for Medicare & Medicaid Services (CMS) Nov. 1 released its calendar year (CY) 2025 outpatient prospective payment system (OPPS) and ambulatory surgical center (ASC) <a href="https://www.federalregister.gov/public-inspection/2024-25521/medicare-and-medicaid-programs-hospital-outpatient-prospective-payment-and-ambulatory-surgical" target="_blank">final rule</a>. The rule increases OPPS rates by a net 2.9% in CY 2025 compared to CY 2024.</p><p>The policies and payment rates in the rule will generally take effect on Jan. 1, 2025.</p><div class="panel module-typeC"><div class="panel-heading"><h3 class="panel-title">Key Highlights</h3></div><div class="panel-body"><p>CMS’ final rule will:</p><ul><li>Increase Medicare hospital OPPS rates by a net 2.9% in CY 2025.</li><li>Pay separately for diagnostic radiopharmaceuticals with per-day costs above $630.</li><li>Exclude qualifying cell and gene therapies from comprehensive ambulatory payment classification (C-APC) packaging.</li><li>As required by law, implement temporary additional payments for certain non-opioid treatments for pain relief dispensed in the hospital outpatient department (HOPD) and ASC settings.</li><li>Adopt three measures related to health equity for the Outpatient, ASC and Rural Emergency Hospital (REH) Quality Reporting Programs (QRP) and extend voluntary data reporting for two hybrid measures in the Inpatient Quality Reporting Program.</li><li>Establish a new Condition of Participation (CoP) for hospitals and critical access hospitals (CAHs) offering obstetrical services, and update quality assessment performance improvement (QAPI), emergency services and discharge planning CoPs.</li><li>Cover and pay for HIV Pre-Exposure Prophylaxis (PrEP) drugs and related services in HOPDs as additional preventive services under the OPPS.</li></ul></div></div><h2>AHA Take</h2><p>According to a statement by AHA Senior Vice President of Public Policy Analysis and Development Ashley Thompson, “Medicare's sustained and substantial underpayment of hospitals has stretched for almost two decades, and today's final outpatient rule only worsens this chronic problem. The agency's final increase of less than 3% for outpatient hospital services will make the provision of care, investments in the health care workforce, and addressing new challenges, such as cybersecurity threats, more difficult. These inadequate payments will have a negative impact on patient access to care, especially in rural and underserved communities nationwide.</p><p>“The AHA fully shares CMS’ goals of improving maternal health outcomes and reducing inequities in maternal care,” said Thompson. “While we appreciate that the final rule provides hospitals with additional implementation time and greater flexibility in how they meet certain requirements, we remain concerned about CMS’ excessive use of Conditions of Participation to drive its policy agenda and the potential risk for these requirements to inadvertently reduce access to maternal care. We believe a less punitive and more collaborative approach would be more effective given that the key drivers of maternal health outcomes are highly complex and involve multiple stakeholders. The AHA remains committed to working with the Administration and other stakeholders to advance a full range of solutions to improve maternal outcomes.”</p><p>Highlights of the CY 2025 OPPS/ASC final rule follow.</p><h2>CY 2025 OPPS Final Rule Changes</h2><h3>Payment Update</h3><p>CMS updates OPPS rates by a net 2.9% for CY 2025. This includes a market-basket update of 3.4% and a statutorily required productivity cut of 0.5 percentage points. These payment adjustments, in addition to other changes in the rule, are estimated to result in a net increase in OPPS payments of 3.2% in CY 2025 compared to CY 2024. For hospitals that do not publicly report quality measure data, CMS will continue to impose the statutory 2.0 percentage point additional reduction in payment, resulting in a 0.9% OPPS update.</p><p>CMS estimates that the total increase in Federal Government expenditures under the OPPS for CY 2025, compared to CY 2024, due to the changes to the OPPS in the final rule, will be approximately $1.98 billion. Taking into account estimated changes in enrollment, utilization and case mix for CY 2025, CMS estimates that OPPS expenditures for CY 2025, including beneficiary cost-sharing, would be approximately $87.7 billion, which is approximately $4.7 billion higher than estimated OPPS expenditures in CY 2024.</p><p>CMS increases the conversion factor to $89.169 in CY 2025 compared to $87.382 in CY 2024. This update reflects several factors: the 2.9% OPPS payment update, the wage index budget neutrality adjustment, the 5% annual cap for individual hospital wage index reductions budget neutrality adjustment, the cancer hospital payment budget neutrality adjustment and an increase of 0.10 percentage points for the difference in pass-through spending. CMS will use a reduced conversion factor of $87.439 in the payment calculation for hospitals that fail to meet the Hospital Outpatient QRP.</p><h3>Data Used in CY 2024 OPPS/ASC Rate Setting</h3><p>CMS used the CY 2023 claims data and the most updated cost report extract from the Healthcare Cost Report Information System, which primarily includes cost reports from CY 2022, to set OPPS and ASC payment rates.</p><h3>Packaging Policy for “Threshold-packaged” and “Policy-packaged” Drugs, Biologicals and Radiopharmaceuticals</h3><p>CMS pays for drugs, biologicals and radiopharmaceuticals that do not have pass-through status in one of two ways: packaged payment or separate payment (individual Ambulatory Payment Classifications (APCs)). For CY 2025, CMS maintains the packaging threshold for “threshold-packaged” drugs, including non-implantable biologicals and therapeutic radiopharmaceuticals, of $140 per day. This means that such products with a per-day cost of $140 or less will have their cost packaged in the procedure with which they are billed.</p><p>There are exceptions to this threshold-based packaging policy for certain “policy-packaged” drugs, biologicals and contrast agents. CMS will continue to package the costs of all anesthesia drugs; drugs, biologicals, and contrast agents and other drugs that function as supplies when used in a diagnostic test or procedure; and drugs and biologicals that function as supplies when used in a surgical procedure (e.g., skin substitutes), regardless of whether they meet the $140 per day threshold.</p><h4>Diagnostic Radiopharmaceuticals Separate Payment</h4><p>CMS finalizes its proposal to pay separately for diagnostic radiopharmaceuticals with per-day costs above $630 —approximately two times the volume-weighted average cost amount currently associated with diagnostic radiopharmaceuticals in the Nuclear Medicine APCs. It will update the $630 threshold in CY 2026 and subsequent years by the Producer Price Index for Pharmaceutical Preparations. Finally, CMS will pay for separately payable diagnostic radiopharmaceuticals based on their mean unit cost derived from OPPS claims for CY 2025.</p><h4>Exclusion of Cell and Gene Therapies from C-APC Packaging</h4><p>CMS finalizes its proposal to exclude qualifying cell and gene therapies from C-APC packaging.</p><h4>Add-on Payment for Radiopharmaceutical Technetium-99m (Tc-99m)</h4><p>For CY 2025, CMS will continue its current policy to apply an add-on payment to radiopharmaceuticals that use Tc-99m produced without the use of highly enriched uranium. However, for CY 2026, CMS finalizes its proposal to replace this add-on payment with an add-on payment for radiopharmaceuticals that use Tc-99m derived from domestically produced Mo-99.</p><h4>Payment for HIV PrEP in HOPDs</h4><p>CMS finalizes its proposal to cover and pay for HIV PrEP drugs and related services as additional preventive services under the OPPS, as described by CMS through a National Coverage Determination issued and effective Sept. 30, 2024.<a href="#fn1"><sup>1</sup></a> Covered services include the HIV PrEP drugs, drug administration, HIV and hepatitis B screening, and individual counseling performed by physicians or certain other health care practitioners.</p><h3>Intensive Outpatient and Partial Hospitalization Programs</h3><p>CMS will maintain the existing rate structures for Intensive Outpatient Program (IOP) and Partial Hospitalization Program (PHP) services as established in the previous rulemaking. The agency will calculate cost information using CY 2023 claims data and the OPPS data set to identify services eligible for payment under the IOP and PHP benefits.</p><h3>Cancer Hospital Payment Adjustment</h3><p>CMS will continue providing additional payments to cancer hospitals so that a cancer hospital’s payment-to-cost ratio (PCR) after the additional payments is equal to the weighted average PCR for the other OPPS hospitals using the most recently submitted or settled cost report data. Current law also requires this weighted average PCR to be reduced by 1.0 percentage points. Therefore, for CY 2025, CMS will use a target PCR of 0.87 to determine the CY 2025 cancer hospital payment adjustment to be paid at cost report settlement. That is, the payment adjustments will be the additional payments needed to result in a PCR equal to 0.87 for each cancer hospital.</p><h3>Quality Reporting Programs</h3><p>For the Inpatient QRP, CMS will continue voluntary reporting of certain data elements for the Hybrid Hospital-wide Mortality and Readmissions measures that will impact the fiscal year (FY) 2026 payment determination as proposed and already communicated to hospitals outside of the rulemaking process; in response to public comment, the agency finalizes an additional year of voluntary reporting of these data elements so that data reporting also will not affect FY 2027 payment.</p><p>For the Hospital Outpatient QRP, CMS finalizes its proposal to adopt a patient-reported outcome measure of the patient’s understanding of information related to recovery after outpatient surgery beginning with voluntary reporting in CY 2025 and mandatory reporting beginning CY 2026. The agency will also remove two measures found to have little to no effect on patient outcomes.</p><p>CMS makes programmatic updates to the ASC QRP and the REH QRP regarding data reporting requirements upon conversion to REH status and the reporting period for one existing quality measure in the program.</p><p>For the Outpatient, ASC and REH QRPs, CMS finalizes the adoption of three measures related to health equity as proposed; these measures have already been adopted in the Inpatient QRP. These include the Hospital Commitment to Health Equity measure, with mandatory reporting beginning CY 2025, Screening for Social Drivers of Health measure and Screen Positive Rate for Social Drivers of Health, with voluntary reporting in CY 2025 and mandatory reporting beginning CY 2026.</p><h3>Remote Outpatient Therapy, Diabetes Self-management Training and Medical Nutrition Therapy</h3><p>Barring congressional action, providers can no longer bill for remote outpatient therapy, diabetes self-management training and medical nutrition therapy beginning Jan. 1, 2025. CMS reiterates that extensions of statutory waivers expanding the list of telehealth-eligible providers are necessary for CMS to update these billing policies.</p><h3>Periodic In-person Visits for Mental Health Services Furnished Remotely by Hospital Staff to Beneficiaries in their Homes</h3><p>In previous rulemaking, CMS finalized a requirement that payment for remote mental health services may only be made if the beneficiary receives an in-person service within six months prior to the provision of remote service and then annually. CMS reiterates that these in-person visit requirements are currently set to take effect for services furnished on or after Jan. 1, 2025. Congress would need to extend previous statutory waivers to continue to waive the in-person visit requirements beyond Jan. 1, 2025.</p><h3>Changes to the Inpatient-only List</h3><p>For CY 2025, CMS finalizes the addition of three liver allograft services to the inpatient-only list. The American Medical Association CPT Editorial Panel for CY 2025 created the CPT codes for these three services. Additionally, CMS finalizes removing a pelvic fixation code from the inpatient-only list for CY 2025.</p><h3>Access to Non-opioid Treatments for Pain Relief</h3><p>As directed by the Consolidated Appropriations Act of 2023, CMS implements temporary additional payments for specific non-opioid treatments for pain relief dispensed in the HOPD and ASC settings from Jan. 1, 2025, through Dec. 31, 2027. CMS finalizes a calculation methodology to determine the payment limitation as required by statute. The agency finalizes six drugs and five devices that qualify for these payments, which will be paid separately.</p><p>The qualifying drugs have FDA-approved indications to reduce post-operative pain or produce postsurgical analgesia, and the qualifying medical devices have demonstrated through evidence that they reduce opioid usage when used in the postoperative setting.</p><h3>Changes to the Review Timeframes for the HOPD Prior Authorization Process</h3><p>CMS reduces the permissible review timeframe for prior authorization requests for relevant covered outpatient department services from 10 business days to seven calendar days for standard reviews.</p><h2>CY 2025 ASC Final Rule Changes</h2><h3>ASC Payment Update</h3><p>For CYs 2019 through 2023, CMS adopted a policy to update ASC payment rates using the hospital market basket. In light of the impact of the COVID-19 public health emergency on health care utilization, the agency extends this policy through CYs 2024 and 2025. As such, it will increase payment rates by 2.9% for ASCs that meet the quality reporting requirements under the ASC QRP.</p><h3>Changes to the List of ASC-covered Surgical Procedures</h3><p>CMS evaluates the ASC-covered procedures list (CPL) each year to determine whether procedures should be added to or removed from the list. For CY 2025, the agency finalized, with modification, the addition of 21 medical and dental procedures to the ASC CPL based on its existing regulatory criteria.</p><h2>other Final Rule Policies</h2><h3>Health and Safety Standards for Obstetrical and Other Services in Hospitals and CAHs</h3><p>CMS finalizes a new obstetrical services CoP for hospitals and CAHs as part of its efforts to improve maternal health outcomes. This new CoP encompasses organization and supervision of services, delivery of care and staff training. CMS also finalized updates to the QAPI and emergency services CoPs. In addition, the final rule includes an update to the hospital discharge planning CoP.</p><h3>Obstetrical Services</h3><h4>Organization, Supervision of Services and Delivery of Care</h4><p>Beginning Jan. 1, 2026, hospitals and CAHs offering obstetrical services must offer such services in a “well-organized” fashion and per “nationally recognized standards of practice” for both physical health and behavioral health (including mental health and substance use disorders). The final CoP also requires that hospitals delineate obstetrical privileges for all practitioners per the competencies of each practitioner and requires all units providing obstetrical services to be supervised by an experienced, trained professional.</p><p>In a departure from the proposed rule, hospitals and CAHs with obstetrical care units must keep certain supplies readily available instead of maintaining equipment for each patient care room. In addition to a call-in system, cardiac monitor, and fetal doppler or monitor, hospitals and CAHs must maintain and keep readily available protocols and provisions, including equipment, supplies and medications necessary to treat obstetric emergencies.</p><h4>Staff Training</h4><p>Beginning Jan. 1, 2027, hospitals and CAHs offering obstetrical services must train relevant staff on selected topics that reflect the services’ scope and complexity, including facility-identified evidenced-based protocols to improve care delivery in the hospital or CAH.</p><h4>QAPI</h4><p>Under the final rule, hospitals and CAHs offering obstetrical services must regularly assess and work to improve maternal health disparities and outcomes among patients. Effective Jan. 1, 2027, hospitals and CAHs must track and analyze maternal health data, quality indicators and outcomes as part of their QAPI plans and use these findings to inform and update the staff training required under the obstetrical services CoP. CMS also requires the leadership of hospital obstetrical services to engage in QAPI activities, including data collection and monitoring. Finally, hospitals and CAHs must conduct at least one QAPI project focused on improving maternal health outcomes and disparities each year. Hospitals and CAHs in state, tribal or local jurisdictions with a maternal mortality review committee must also maintain a process to incorporate publicly available data into the hospital or CAH’s QAPI program.</p><h4>Emergency Services Readiness</h4><p>CMS has also finalized updates to the existing emergency services CoP for all hospitals and CAHs that offer emergency services, regardless of whether such hospital or CAH offers obstetrical services. Effective July 1, 2025, hospitals and CAHs must maintain adequate provisions and protocols to meet the emergency needs of patients per the offered emergency services’ complexity and scope, including but not limited to obstetrical emergencies. For hospitals, these provisions must include readily available equipment, supplies and medication necessary for treating emergency cases and a call-in system for each patient; no changes were made to existing requirements for equipment, supplies and medications for CAHs. For both hospitals and CAHs, applicable staff must be trained on these protocols and provisions annually, and findings from the hospital or CAH’s QAPI program should inform training topics and updates or other revisions to the training program.</p><h4>Transfer Protocols</h4><p>Beginning July 1, 2025, CMS will require hospitals to develop and maintain policies for transferring patients to the appropriate level of care, including among units within a facility and transfers to other hospitals. Relevant staff must receive annual training on these protocols. CMS did not change discharge planning requirements for CAHs.</p><h3>Changes to Medicaid Clinic Services Four Walls Exceptions</h3><p>CMS finalizes its proposal to add three exceptions to the four walls requirements for Medicaid clinic services: a mandatory exception for Indian Health Service (IHS) and Tribal clinics and optional exceptions for behavioral health clinics and clinics located in rural areas. Medicaid clinic services are distinct and separate from services provided in a Federally-Qualified Health Center (FQHC) or FQHC look-alike. In finalizing provisions related to clinics in rural areas, CMS allows states to adopt a definition of rural in use by certain federal agencies or a state’s rural policy-making agency and requires the state to attest that the definition best captures the rural population.</p><h3>IHS and Tribal Hospitals All-inclusive Rate</h3><p>Currently, IHS and tribal outpatient departments are excluded from the Medicare OPPS and are paid the Medicare outpatient hospital all-inclusive rate (AIR). IHS determines the AIR from cost reports and updates these rates annually. IHS and tribal hospitals have increasingly provided higher-cost drugs along with more complex and expensive services, such as cancer-related services. CMS believes that the AIR may no longer be adequate for these hospitals’ costs to provide these complex services and finalizes its proposals to pay an add-on to the AIR for certain high-cost drugs for people with Medicare who receive care at IHS or tribal hospitals.</p><h2>Further Questions</h2><p>The policies and payment rates in the final rule will take effect Jan. 1, 2025. Watch for a more detailed analysis of the final rule in the coming weeks.</p><p>If you have further questions, contact Roslyne Schulman, AHA’s director of outpatient payment policy, at <a href="mailto:rschulman@aha.org?subject=RE: Special Bulletin: CMS Outpatient PPS and ASC Final Rule for CY 2025 ">rschulman@aha.org</a>.</p><hr><ol><li id="fn1">The final National Coverage Determination can be found at <a href="https://www.cms.gov/medicare-coverage-database/view/ncacal-decision-memo.aspx?proposed=N&ncaid=310&fromTracking=Y&" target="_blank">NCA - Preexposure Prophylaxis (PrEP) Using Antiretroviral Therapy to Prevent Human Immunodeficiency Virus (HIV) Infection (CAG-00464N) - Decision Memo</a>.</li></ol></div><div class="col-md-4"><p><a href="/system/files/media/file/2024/11/Special-Bulletin-CMS-Issues-Hospital-Outpatient-Ambulatory-Surgical-Center-Final-Rule-for-CY-2025.pdf" target="_blank" title="Click here to download the Special Bulletin: CMS Outpatient PPS and ASC Final Rule for CY 2025 PDF."><img src="/sites/default/files/inline-images/Page-1-Special-Bulletin-CMS-Issues-Hospital-Outpatient-Ambulatory-Surgical-Center-Final-Rule-for-CY-2025.png" data-entity-uuid="350cb966-8e0d-481d-b427-38503d8bfd7f" data-entity-type="file" alt="Special Bulletin: CMS Issues Hospital Outpatient, Ambulatory Surgical Center Final Rule for CY 2025 page 1." width="696" height="900"></a></p></div></div></div> Mon, 04 Nov 2024 15:20:37 -0600 Ambulatory Surgical Center (ASC) /lettercomment/2024-09-09-aha-comments-cms-outpatient-ambulatory-surgery-center-cy-2025-proposed-payment-rule <div class="container"><div class="row"><div class="col-md-8"><p>September 9, 2024</p><p>The Honorable Chiquita Brooks-LaSure<br>Administrator<br>Centers for Medicare & Medicaid Services<br>Hubert H. Humphrey Building<br>200 Independence Avenue, S.W., Room 445-G<br>Washington, DC 20201</p></div><div class="col-md-4"><div class="external-link spacer"><a class="btn btn-wide btn-primary" href="/system/files/media/file/2024/09/AHA-Comments-on-CMS-Outpatient-Ambulatory-Surgery-Center-CY-2025-Proposed-Payment-Rule.pdf" target="_blank" title="Click here to download the AHA Comments on CMS Outpatient, Ambulatory Surgery Center CY 2025 Proposed Payment Rule letter PDF.">Download the Full Letter PDF</a></div></div></div><div class="row"><div class="col-md-8"><p><em><strong>Re: CMS–1809–P: Medicare and Medicaid Programs: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems; Quality Reporting Programs, Including the Hospital Inpatient Quality Reporting Program; Health and Safety Standards for Obstetrical Services in Hospitals and Critical Access Hospitals; Prior Authorization; Requests for Information; Medicaid and CHIP Continuous Eligibility; Medicaid Clinic Services Four Walls Exceptions; Individuals Currently or Formerly in Custody of Penal Authorities; Revision to Medicare Special Enrollment Period for Formerly Incarcerated Individuals; and All-Inclusive Rate Add-On Payment for High-Cost Drugs Provided by Indian Health Service and Tribal Facilities (Vol. 89, No. 140), July 22, 2024.</strong></em></p><p>Dear Administrator Brooks-LaSure:</p><p>On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, and our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and the 43,000 health care leaders who belong to our professional membership groups, the ���������� Association (AHA) appreciates the opportunity to comment on the Centers for Medicare & Medicaid Services’ (CMS) hospital outpatient prospective payment system (OPPS) and ambulatory surgical center (ASC) payment system proposed rule for calendar year (CY) 2025.</p><p>We support many of the OPPS proposed rule provisions, including unpackaging and paying separately for certain high-cost diagnostic radiopharmaceuticals, unpackaging from the comprehensive ambulatory payment classifications (C-APCs) and paying separately for certain cell and gene therapy products, and establishing new add-on payment for hospitals that use Technetium-99m (Tc-99m) derived from domestically produced Molybdenum-99 (Mo-99). We also appreciate that in response to comments from AHA and its members, the agency is considering reducing the reporting burden of its policy that helps offset the marginal costs that hospitals face in procuring domestically made surgical N95 respirators.</p><p>At the same time, the AHA continues to have strong concerns about the shortcomings in the annual payment update for hospital outpatient departments (HOPDs), in particular the market basket forecast and update. This is especially concerning considering past underwhelming market basket increases, specifically from CYs 2022 through 2024. Indeed, the forecasts on which CMS relies have consistently under-predicted cost growth, and the actual market basket increases are falling well short of inflation. <strong>Therefore, AHA urges CMS to consider whether adjustments are necessary in its approach to annual market basket updates to ensure that beneficiaries continue to have access to high-quality outpatient care. We also urge CMS to eliminate the productivity cut for CY 2025, as detailed below.</strong></p><p><strong>Further, the AHA shares CMS’ commitment to improving maternal health outcomes. However, we are concerned that CMS’ proposed CoPs fail to address the root causes behind poor maternal outcomes and may further reduce access to safe, high-quality obstetric care.</strong> Any potential solution to this crisis must consider the entire maternal health continuum and should prioritize the needs of pregnant and postpartum women. Instead of issuing duplicative and unnecessary regulations, the AHA urges CMS to partner with patients and the hospitals and health systems that serve them to address maternal morbidity and mortality causes. We believe a collaborative approach focused on patients not facilities will lead to meaningful patient outcome improvements while preserving access to safe, high-quality maternal health care.</p><p>We appreciate your consideration of these issues. Our detailed comments are attached. Please contact me if you have questions or feel free to have a member of your team contact Roslyne Schulman, AHA’s director for policy, at <a href="mailto:rschulman@aha.org?subject=RE: AHA Comments on CMS Outpatient, Ambulatory Surgery Center CY 2025 Proposed Payment Rule">rschulman@aha.org</a>.</p><p>Sincerely,</p><p>/s/</p><p>Ashley B. Thompson<br>Senior Vice President<br>Public Policy Analysis and Development</p><p><a href="/system/files/media/file/2024/09/AHA-Comments-on-CMS-Outpatient-Ambulatory-Surgery-Center-CY-2025-Proposed-Payment-Rule.pdf" target="_blank" title="Click here to download the AHA Comments on CMS Outpatient, Ambulatory Surgery Center CY 2025 Proposed Payment Rule letter PDF.">Download the complete letter PDF.</a></p></div><div class="col-md-4"><div class="external-link spacer"><a href="/system/files/media/file/2024/09/AHA-Comments-on-CMS-Outpatient-Ambulatory-Surgery-Center-CY-2025-Proposed-Payment-Rule.pdf" target="_blank" title="Click here to download the AHA Comments on CMS Outpatient, Ambulatory Surgery Center CY 2025 Proposed Payment Rule letter PDF."><img src="/sites/default/files/inline-images/Page-1-AHA-Comments-on-CMS-Outpatient-Ambulatory-Surgery-Center-CY-2025-Proposed-Payment-Rule.png" data-entity-uuid="3db1f84b-c317-425e-aa5a-f5e73a1f41b2" data-entity-type="file" alt="AHA Comments on CMS Outpatient, Ambulatory Surgery Center CY 2025 Proposed Payment Rule letter page 1." width="761" height="900"></a></div></div></div></div> Mon, 09 Sep 2024 15:07:48 -0500 Ambulatory Surgical Center (ASC) /webinar-recordings/2024-08-29-cy-2025-outpatient-ppsasc-payment-system-proposed-rule-webinar Thu, 29 Aug 2024 15:16:09 -0500 Ambulatory Surgical Center (ASC) /special-bulletin/2024-07-10-cms-issues-hospital-outpatient-ambulatory-surgical-center-proposed-rule-cy-2025 <div class="container"><div class="row"><div class="col-md-8"><p>The Centers for Medicare & Medicaid Services (CMS) July 10 released its calendar year (CY) 2025 outpatient prospective payment system (OPPS) and ambulatory surgical center (ASC) <a href="https://public-inspection.federalregister.gov/2024-15087.pdf">proposed rule</a>. The rule would increase OPPS rates by a net 2.6% in CY 2025 compared to CY 2024. </p><p>CMS will accept comments on the proposed rule through Sept. 9.</p><div class="panel module-typeC"><div class="panel-heading"><h2>KEY HIGHLIGHTS</h2><p>CMS’ proposed policies would:</p><ul><li>Increase Medicare hospital OPPS rates by a net 2.6% in CY 2025.</li><li>Pay separately for diagnostic radiopharmaceuticals with per-day costs above a threshold of $630.</li><li>Exclude qualifying cell and gene therapies from comprehensive ambulatory payment classification (C-APC) packaging.</li><li>As required by law, implement temporary additional payments for certain non-opioid treatments for pain relief dispensed in the hospital outpatient department (HOPD) and ASC settings.</li><li>Adopt three measures related to health equity for the Outpatient, ASC and rural emergency hospital (REH) Quality Reporting Programs, and extend voluntary data reporting for two hybrid measures in the Inpatient Quality Reporting Program.</li><li>Establish new conditions of participation (CoPs) for hospitals and critical access hospitals (CAHs) focused on obstetrical services and maternal care.</li></ul></div></div><h2>AHA TAKE</h2><p>According to a statement by AHA Senior Vice President of Public Policy Analysis and Development Ashley Thompson, “CMS has yet again proposed an inadequate update to hospital payments. This proposed increase for outpatient hospital services of only 2.6% comes despite the fact that many hospitals across the country continue to operate on negative or very thin margins that make providing care and investing in their workforce very challenging. Hospitals’ and health systems’ ability to continue caring for patients and providing essential services for their communities may be in jeopardy, and we urge CMS to provide additional support in the final rule.” </p><p>“The AHA fully shares CMS’ goals of improving maternal health outcomes and reducing inequities in maternal care. However, we are deeply concerned by CMS’ continued and excessive use of Conditions of Participation to drive its policy agenda. We believe a less punitive and more collaborative and flexible approach is far superior. We will carefully review CMS’ proposals to determine whether they are feasible, sufficiently flexible for the wide variety of hospitals to which they would apply and do not inadvertently exacerbate maternal care access challenges.”</p><p>Highlights of the CY 2025 OPPS/ASC proposed rule follow.</p><h2>CY 2025 OPPS Proposed Rule Changes</h2><h3>Proposed Payment Update</h3><p>CMS proposes to update OPPS rates by a net 2.6% for CY 2025. This includes a proposed market-basket update of 3.0% and a statutorily required productivity cut of 0.4 percentage points. These payment adjustments, in addition to other proposed changes in the rule, are estimated to result in a net increase in OPPS payments to hospitals of 2.4% compared to CY 2024 payments.<strong> </strong>For hospitals that do not publicly report quality measure data, CMS would continue to impose the statutory 2.0 percentage point additional reduction in payment, resulting in a 0.6% OPPS update. CMS estimates that total payments to hospitals (including enrollment, utilization, case-mix and beneficiary cost sharing) would increase by approximately $5.2 billion in CY 2025 compared to CY 2024.</p><p>CMS proposes to increase the conversion factor to $89.379 in CY 2025, as compared to $87.382 in CY 2024. This update reflects several proposed factors: the 2.6% OPPS payment update, the wage index budget neutrality adjustment of 1.0026, the 5% annual cap for individual hospital wage index reductions adjustment of 0.9982, the cancer hospital payment adjustment of 1.0006 and a decrease of 0.44 percentage point for the difference in pass-through spending. CMS proposes to use a reduced conversion factor of $87.636 in the calculation of payments for hospitals that fail to meet the Hospital Outpatient Quality Reporting (OQR) Program.</p><h3>Data Proposed for Use in CY 2024 OPPS/ASC Ratesetting</h3><p>To set proposed OPPS and ASC payment rates, CMS would use the most updated cost reports and claims data available. Therefore, the agency proposes to use the CY 2023 claims data and the most updated cost report extract available from the Healthcare Cost Report Information System. This extract primarily includes cost reports with cost reporting periods from CY 2022.</p><h3>Proposed Packaging Policy for “Threshold-packaged” and “Policy-packaged” Drugs, Biologicals and Radiopharmaceuticals</h3><p>CMS pays for drugs, biologicals and radiopharmaceuticals that do not have pass-through status in one of two ways: packaged payment or separate payment (individual Ambulatory Payment Classifications (APCs)). For CY 2025, CMS proposes to maintain the packaging threshold for “threshold-packaged” drugs, including non-implantable biologicals and therapeutic radiopharmaceuticals, of $140 per day. This means that such products with a per-day cost of $140 or less would have their cost packaged in the procedure with which they are billed.</p><p>There are exceptions to this threshold-based packaging policy for certain “policy-packaged” drugs, biologicals and contrast agents. CMS proposes to continue to package the costs of all anesthesia drugs; drugs, biologicals, and contrast agents and other drugs that function as supplies when used in a diagnostic test or procedure; and drugs and biologicals that function as supplies when used in a surgical procedure (e.g., skin substitutes), regardless of whether they meet the $140 per day threshold.</p><p><u>Diagnostic Radiopharmaceuticals Separate Payment.</u> CMS proposes to pay separately for diagnostic radiopharmaceuticals with per-day costs above a threshold of $630 — which is approximately two times the volume-weighted average cost amount currently associated with diagnostic radiopharmaceuticals. It also proposes to update the $630 threshold in CY 2026 and subsequent years by the Producer Price Index for Pharmaceutical Preparations. Finally, CMS proposes to pay for separately payable diagnostic radiopharmaceuticals based on their Mean Unit Cost derived from OPPS claims.</p><p><u>Exclusion of Cell and Gene Therapies from Comprehensive APCs (C-APC) Packaging.</u> CMS proposes to exclude qualifying cell and gene therapies from C-APC packaging.</p><p><u>Add-on Payment for Radiopharmaceutical Technetium-99m (Tc-99m).</u> For CY 2025, there is an add-on payment that applies to radiopharmaceuticals that use Tc-99m produced without use of highly enriched uranium (HEU). CMS proposes that for CY 2026 it would replace the add-on payment for radiopharmaceuticals produced without the use of Tc-99m derived from non-HEU sources with an add-on payment for radiopharmaceuticals that use Tc-99m derived from domestically produced Mo-99.</p><p><u>Payment for HIV Pre-Exposure Prophylaxis (PrEP) in HOPDs.</u> For CY 2025, CMS proposes to cover and pay for HIV PrEP drugs and related services under the OPPS, if covered by CMS through a National Coverage Determination.<sup>1</sup> This proposed coverage would include coverage for the HIV PrEP drugs, drug administration, HIV and hepatitis B screening, and individual counseling performed by physicians or certain other health care practitioners.</p><h3>Intensive Outpatient and Partial Hospitalization Programs</h3><p>CMS proposes to maintain the existing rate structures for Intensive Outpatient Program (IOP) and Partial Hospitalization Program (PHP) services as established in previous rulemaking. To calculate cost information, the agency would use CY 2023 claims data and the OPPS data set to identify services eligible for payment under the IOP and PHP benefits.</p><h3>Proposed Cancer Hospital Payment Adjustment</h3><p>CMS proposes to continue providing additional payments to cancer hospitals so that a cancer hospital’s payment-to-cost ratio (PCR) after the additional payments is equal to the weighted average PCR for the other OPPS hospitals using the most recently submitted or settled cost report data. Current law also requires that this weighted average PCR be reduced by 1.0 percentage point. Therefore, for CY 2025, CMS proposes to use a target PCR of 0.87 to determine the CY 2025 cancer hospital payment adjustment to be paid at cost report settlement. That is, the payment adjustments will be the additional payments needed to result in a PCR equal to 0.87 for each cancer hospital.</p><h3>Quality Reporting Programs</h3><p>For the Inpatient Quality Reporting Program (IQR), CMS proposes to continue voluntary reporting of certain data elements for two hybrid quality measures that would impact the FY 2026 payment <a>determination</a><a href="#_msocom_1" id="_anchor_1" language="JavaScript">[TA1]</a> .</p><p>For the OQR, CMS proposes to adopt a patient-reported outcome measure of the patient’s understanding of information related to recovery after outpatient surgery beginning with voluntary reporting in CY 2025 and mandatory beginning CY 2026. The agency also proposes to remove two measures that were found to have little to no effect on patient outcomes.</p><p>CMS proposes to make programmatic updates to the ASC Quality Reporting Program (ASCQR) and seeks comment on a request for information regarding a new framework for ASC quality data reporting.</p><p>The agency also proposes certain programmatic updates for the Rural Emergency Hospital Quality Reporting Program (REHQR) regarding data reporting requirements upon conversion to REH status and the reporting period for one existing quality measure in the program.</p><p>For the OQR, ASCQR and REHQR, CMS proposes to adopt three measures related to health equity that have already been adopted in the IQR. These include the Hospital Commitment to Health Equity measure, with mandatory reporting beginning CY 2025, and Screening for Social Drivers of Health measure and Screen Positive Rate for Social Drivers of Health, with voluntary reporting in CY 2025 and mandatory reporting beginning CY 2026.</p><p>Finally, CMS seeks feedback on several aspects of the Overall Hospital Quality Star Rating methodology but does not propose to change the methodology.</p><h3>Remote Outpatient Therapy, Diabetes Self-management Training and Medical Nutrition Therapy</h3><p>CMS states that extensions of statutory waivers expanding the list of telehealth-eligible providers will be necessary for providers to continue billing for remote therapy services (including physical therapy, occupational therapy and speech language pathology), Diabetes Self-Management Training (DMST) and Medical Nutrition Therapy (MNT) when administered via telehealth. Barring Congressional action, providers will no longer be able to bill for remote outpatient therapy, DMST and MNT beginning Jan. 1, 2025.</p><h3>Periodic In-person Visits for Mental Health Services Furnished Remotely by Hospital Staff to Beneficiaries in their Homes</h3><p>CMS states that extensions of statutory waivers will be necessary to continue the in-person visit requirements waiver for mental health services. In-person visit requirements are currently set to take effect for services furnished on or after Jan. 1, 2025, unless Congress extends these waivers.</p><h3>Proposed Changes to the Inpatient-only List</h3><p>For CY 2025, CMS proposes to add three services (for which codes were newly created by the AMA CPT Editorial Panel for CY 2025) to the IPO list. </p><h3>Access to Non-opioid Treatments for Pain Relief</h3><p>As directed by the Consolidated Appropriations Act of 2023, CMS proposes to implement temporary additional payments for specific non-opioid treatments for pain relief dispensed in the HOPD and ASC settings from Jan. 1, 2025, through Dec. 31, 2027. CMS proposes a calculation methodology to determine the payment limitation as required by statute. The agency proposes seven drugs and one device that would qualify for these payments, which would be paid separately.</p><h3>Proposed Changes to the Review Timeframes for the HOPD Prior Authorization Process</h3><p>CMS proposes to change the current review timeframe for prior authorization requests for HOPD services from 10 business days to seven calendar days for standard reviews.</p><h2>CY 2025 ASC PROPOSED RULE CHANGES</h2><h3>ASC Payment Update</h3><p>For CYs 2019 through 2023, CMS adopted a policy to update the ASC payment system using the hospital market basket update. In light of the impact of the COVID-19 public health emergency on health care utilization, the agency extended this policy through CYs 2024 and 2025. As such, it proposes to increase payment rates by 2.6% for ASCs that meet the quality reporting requirements under the ASC Quality Reporting (ASCQR) Program.</p><h3>Proposed Changes to the List of ASC-covered Surgical Procedures</h3><p>CMS evaluates the ASC-covered procedures list (CPL) each year to determine whether procedures should be added to or removed from the list. For CY 2025, the agency proposes to add 20 medical and dental procedures to the ASC CPL based on its existing regulatory criteria.</p><h2>OTHER PROPOSALS</h2><h3>Proposed Health and Safety Standards for Obstetrical Services in Hospitals and CAHs</h3><p>CMS proposes new and updated CoPs for hospitals and CAHs as part of its efforts to improve maternal health outcomes. The new and updated CoPs encompass organization, staffing and delivery of care; staff training; quality assessment and performance improvement (QAPI); emergency services readiness; and transfer protocols.</p><p><u>Organization, staffing and delivery of care.</u> For hospitals and CAHs offering obstetrical services, CMS’ proposed CoP would require such services to be well organized and provided per nationally recognized standards of practice for both physical health and behavioral health (including mental health and substance use disorders). Hospitals and CAHs would be required to maintain a roster of all practitioners providing obstetrical care specifying the competencies of each practitioner. CMS also would require all units providing obstetrical services to be supervised by an experienced, trained professional. The agency also would require obstetrical care units to maintain certain supplies for obstetrical emergencies, complications, immediate post-delivery needs and other health and safety events.</p><p><u>Staff training.</u> Hospitals and CAHs offering obstetrical services would be required to train on selected topics that reflect the scope and complexity of the services offered.</p><p><u>QAPI.</u> Hospitals and CAHs offering obstetrical services would be required to include analyses of maternal health data, quality indicators and outcomes in their QAPI plans. CMS also would require hospitals to use the findings of the analyses to assess and improve maternal health outcomes, reduce disparities and inform staff training. Lastly, CMS would require the leadership of hospital obstetrical services to engage in QAPI activities.</p><p><u>Emergency services readiness.</u> CMS proposes an update to the existing emergency services CoP which would apply to all hospitals and CAHs that offer emergency services, regardless of whether such hospital or CAH offers obstetrical services. This update would require facilities to maintain protocols to meet emergency needs per the complexity and scope of emergency services offered at a hospital or CAH. Such protocols would include mandatory annual training for certain staff and maintenance of certain emergency medications and supplies.</p><p><u>Transfer protocols.</u> CMS proposes to require hospitals and CAHs to develop and maintain policies for transfers among units within a facility as well as transfers to other hospitals. Staff would be required to be trained on these protocols.</p><h3>Proposed Changes to Medicaid Clinic Services Four Walls Exceptions</h3><p>CMS proposes to add three exceptions to the four walls requirements for Medicaid clinic services: a mandatory exception for Indian Health Service/Tribal clinics and optional exceptions for behavioral health clinics and clinics located in rural areas. CMS is seeking input on defining rural areas, including whether to defer to states to define what areas are considered rural.</p><h3>Indian Health Service (IHS) and Tribal Hospitals All-Inclusive Rate (AIR)</h3><p>Currently, IHS and tribal outpatient departments are excluded from the Medicare OPPS and are paid the Medicare outpatient hospital AIR. IHS determines the AIR from cost reports and updates these rates annually. However, IHS and tribal hospitals have increasingly provided higher-cost drugs along with more complex and expensive services, such as cancer-related services. Therefore, CMS believes that the AIR may no longer be adequate to cover these hospitals’ costs of providing these complex services and is proposing to pay an add-on to the AIR for certain high-cost drugs for people with Medicare who receive care at IHS or tribal hospitals.</p><p>Additionally, CMS is seeking comments from stakeholders related to making all IHS and tribal hospitals eligible for payment at the IHS Medicare outpatient AIR. Specifically, the agency is requesting information on the types of clinics and costs of services in these provider settings. It notes that this is a similar request for information in the CY 2022 physician fee schedule proposed rule.</p><h2>FURTHER QUESTIONS</h2><p>CMS will accept comments on the proposed rule through Sept. 9. The final rule will be published around Nov.1, and the policies and payment rates will take effect Jan. 1, 2025. Watch for a more detailed analysis of the proposed rule in the coming weeks.</p><p>If you have further questions, contact Roslyne Schulman, AHA’s director of outpatient payment policy, at <a href="mailto:rschulman@aha.org">rschulman@aha.org</a>.</p><p>__________</p><p><small class="sm"><sup>1</sup> The final National Coverage Determination has not been issued as of the issuance of this proposed rule.</small><br> </p></div><div class="col-md-4"><a href><img src="/sites/default/files/inline-images/cover-image-cms-issues-hospital-outpatient-ambulatory-surgical-center-proposed-rule-for-cy-2025-bulletin-7-10-24.png" data-entity-uuid="60e00226-1568-41d2-a7d3-a47c07089157" data-entity-type="file" alt="Special Bulletin Cover Page" width="643" height="830"></a></div></div></div> Wed, 10 Jul 2024 17:19:23 -0500 Ambulatory Surgical Center (ASC)