CY 2021 OPPS/ASC Final Rule Summary - hfma

1 Medicare Program: 2021 Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs Interim Final Rule Summary The Centers for Medicare & Medicaid Services (CMS) released the calendar year 20211 Final rule with comment for Medicare s hospital outpatient prospective payment system (OPPS) and ambulatory surgical center (ASC) payment system on December 2, 2020. Policies in the Final rule will generally go into effect on January 1, 2021 unless otherwise specified. The Final rule will be published in the December 29, 2020 issue of the Federal Register.

2 Comments are limited to: Payment classifications assigned to the interim APC assignments and/or statusindicators of new or replacement Level II healthcare common procedure (HCPCS)codes. The public comment period for these issues will end on January 4, 2021. Reporting COVID-19 therapeutic inventory, usage and acute respiratory illness public comment period for this issue will end on February 2, Final rule would normally be published by November 2, 2020 to allow for a 60-day delay for the rule to be effective on January 1, 2021 in accord with the Congressional Review Act.

3 In the proposed rule, CMS waived the 60-day delay because of the COVID-19 public health emergency (PHE). In the Final rule, CMS is also waiving the 30-day delay in the effective date required under the Administrative Procedures Act. The Final rule updates OPPS payment policies that apply to outpatient services provided to Medicare beneficiaries by general acute care hospitals, inpatient rehabilitation facilities, inpatient psychiatric facilities, long-term acute care hospitals, children s hospitals, and cancer hospitals, as well as for partial hospitalization services in community mental health centers (CMHCs).

4 Also included is the annual update to the ASC payment system and updates and refinements to the requirements for the Hospital Outpatient Quality Reporting (OQR) Program and the ASC Quality Reporting (ASCQR) Program. Finally, changes are made to the methodology for calculating the Overall Hospital Quality Star Rating for Hospital Compare. Addenda containing relative weights, payment rates, wage indices and other payment information are available only on the CMS website at: CMS-1736-FC | CMS. Unless otherwise noted, this weblink can be used to access any information specified as being available on the CMS website.

5 TABLE OF CONTENTS Topic Page I. Overview 3 A. Estimated Impact on Hospitals 3 B. Estimated Impact on Beneficiaries 5 II. Updates Affecting OPPS Payments 5 A. Recalibration of Ambulatory Payment Classification (APC) Relative Payment Weights 5 B. Conversion Factor Update 13 1 Henceforth in this document, a year is a calendar year unless otherwise indicated. Healthcare Financial Management Association1 Topic Page C. Wage Index Changes 14 D. Statewide Average Default Cost-to-Charge Ratios (CCRs) 14 E. Sole Community Hospital (SCH) Adjustment 15 F. Cancer Hospital Adjustment 15 G.

6 Outpatient Outlier Payments 16 H. Calculation of an Adjusted Medicare Payment 16 I. Beneficiary Coinsurance 17 III. APC Group Policies 17 A. Treatment of New and Revised HCPCS Codes 17 B. Variations Within APCs 19 C. New Technology APCs 20 D. APC-Specific Policies 27 IV. Payment for Devices 40 A. Pass-Through Payments for Devices 40 B. Device-Intensive Procedures 51 V. Payment Changes for Drugs, Biologicals, and Radiopharmaceuticals 54 A. Transitional Pass-Through Payment: Drugs, Biologicals, and Radiopharmaceuticals 54 B. Payment for Non-Pass-Through Drugs, Biologicals, and Radiopharmaceuticals 55 VI.

7 Estimate of Transitional Pass-Through Spending 68 VII. Hospital Outpatient Visits and Critical Care Services 69 VIII. Partial Hospitalization (PHP) Services 69 A. Background 69 B. PHP APC Update for 2021 69 C. PHP Service Utilization 71 D. Outlier Policy for CMHCs 72 E. Impact 72 IX. Inpatient Only (IPO) List 72 X. Nonrecurring Changes 78 A. Supervision of Outpatient Therapeutic Services 78 B. Medical Review of Certain Inpatient Hospital Admissions 80 XI. OPPS Payment Status and Comment Indicators 84 XII. Medicare Payment Advisory Commission (MedPAC) Recommendations 84 XIII.

8 Ambulatory Surgical Center (ASC) Payment System 85 A. Background 85 B. ASC Treatment of New and Revised Codes 86 C. Update to ASC Covered Surgical Procedures and Covered Ancillary Services Lists 91 D. Payment Update to ASC Covered Surgical Procedures and Covered Ancillary Services 102 E. New Technology Intraocular Lenses (NTIOLs) 103 F. ASC Payment and Comment Indicators 103 G. Calculation of the ASC Payment Rates and the ASC Conversion Factor 103 XIV. Hospital Outpatient Quality Reporting (OQR) Program 106 A. Codifications and Updates to Regulatory Text 106 B. Alignment of Deadlines 107 C.

9 Expansion of Review and Corrections Period to Include Web-Based Measures 107 D. Summary Table of OQR Program Measures 107 E. Payment Reduction for Hospitals That Fail to Meet the OQR Program Requirements 108 XV. Ambulatory Surgical Center Quality Reporting (ASCQR) Program 109 A. Updates to Regulatory Text 109 Healthcare Financial Management Association2 Topic Page B. Alignment of Deadlines 109 C. Creation of Review and Corrections Period 110 D. Summary Table of ASCQR Program Measures 110 E. Payment Reduction for ASCs That Fail to Meet the ASCQR Program Requirements 111 XVI.

10 Overall Hospital Quality Star Rating Methodology 111 A. Background 111 B. Codification of the Overall Star Rating 112 C. Inclusion of CAHs and Veterans Hospitals in the Overall Star Rating 113 D. Overview of Changes to the Overall Star Rating Methodology 114 E. Modified Overall Star Rating Methodology 115 F. Preview Period 123 G. Overall Star Rating Suppressions 123 H. Impact of Changes to the Overall Star Rating Methodology 124 XVII. Prior Authorization 125 XVIII. Revisions to the Laboratory Date of Service (DOS) Policy 129 XIX. Physician-Owned Hospitals 132 XX.