October 14, 2021

Once Again, CMS Retracts Major Policy Decision

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Key Takeaways

  • CMS continues to reverse some policy decisions with its release of the outpatient prospective payment system proposed rule.
  • CMS released its Physician Fee Schedule proposed rule for 2022.
  • CMS also proposes increasing the Merit-based Incentive Payment System performance threshold score, allowing physician assistants to bill Medicare directly.

For more information about this blog post, please contact Khaled J. KleleRyan M. MageeLabinot Alexander Berlajolli, or Brianna J. Santolli

CMS Continues to Reverse Some Policy Decisions With Its Release of the Outpatient Prospective Payment System Proposed Rule

Centers for Medicare & Medicaid Services ("CMS") released its Outpatient Prospective Payment System ("OPPS") proposed rule for 2022, which reverses some of last year's major policy changes that were applauded by ambulatory surgery centers ("ASCs"). Significantly, CMS proposes reinstatement of the inpatient‑only ("IPO") list. Under the proposed rule, the 298 services removed from the IPO list this year would be added back to the IPO list in 2022. CMS also proposes eliminating the 258 procedures added to the ASC covered procedures list in January 2021.

The proposed rule continues with more bad news for hospitals. For example, CMS decided to increase the penalties for failure to comply with its price transparency rule. Hospitals with more than 30 beds in violation of the rule would pay $10 per day for each bed, up to $5,500 per day. Hospitals with 30 beds or fewer would continue to pay up to $300 per day. This would make the annual penalty at least $109,500.  The penalties could go as high as $2 million a year for large hospitals. Making matters worse, the proposed rule is continuing its lower payment rates for 340B drugs by proposing to pay hospitals 22.5 percent less than the average sales price for 340B-acquired drugs. 

The proposed rule is set to increase the OPPS rates by 2.3 percent in 2022, which would yield an estimated $82.7 billion in payments to providers, up about $10.8 billion from 2021. 

Comments are due September 17, 2021.

CMS Releases Physician Fee Schedule Proposed Rule

86 FR 39104 - CMS released its Physician Fee Schedule ("PFS") proposed rule for 2022. Controversially, at a time where physicians' practices have been severely impacted by the COVID‑19 pandemic, resulting in a logjam of patients in need of surgical care, the proposed rule decreases the conversion factor to $33.58, down from $34.89 in 2021. CMS also noted that the 3.75 percent payment increase from the Consolidated Appropriations Act of 2021 is set to expire at the end of this year, which will result in reduced payments to physicians.

The rule proposes further expansion of telehealth, including, but not limited to, reimbursing providers for certain mental and behavioral healthcare services, allowing Medicare patients to access telehealth services from their homes, eliminating certain geographic restrictions, and using audio‑only communication technology for the diagnosis, evaluation, or treatment of mental health disorders. Additionally, CMS proposes extending coverage of certain services added to the Medicare telehealth list during the pandemic through December 31, 2023, to give CMS more time to evaluate whether the services should be permanently added to the telehealth list.

CMS also proposes increasing the Merit-based Incentive Payment System performance threshold score, allowing physician assistants to bill Medicare directly, and giving accountable care organizations more time to transition to electronic reporting.

Comments are due September 13, 2021.

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