Hospital Pros and Cons of the CY 2022 OPPS Proposed Rule

Pro: IPO list changes

The American Hospital Association (AHA) is giving a big thumbs up to CMS for proposing to halt the elimination of the Inpatient-Only (IPO) list, which dictates the services that are only payable by Medicare if performed in the inpatient setting.

CMS was phasing out the list under the CY 2021 OPPS final rule by removing nearly 300 services from the 1,700-service list. The agency said the IPO list may have restricted patient choice when it came to surgery.

However, the agency plans to roll back the IPO list’s elimination after receiving many comments from stakeholders. The CY 2022 OPPS proposed rule would also add back the services taken off the list in 2021, if finalized as is.

Similarly, CMS is proposing to reinstate safety criteria for services that can be performed in ASCs. The rule would also remove 267 procedures from the ASC Covered Procedures List that were added in CY 2021.

“We are pleased that CMS recognizes the unique role that hospital outpatient departments serve in caring for patients, and that it proposes to roll back two problematic policies it advanced last year,” AHA’s executive vice president Stacey Hughes, said in a statement. 

“Hospital outpatient departments are held to higher regulatory standards and are often the best setting for patients with the most severe chronic conditions,” Hughes continued.

Bruce Siegel, MD, MPH, president and CEO of America’s Essential Hospitals, added in a statement, “We welcome the agency’s proposals to halt the elimination of the IPO list and to take a more transparent and thoughtful approach that ensures patient safety is maintained and avoids added complexity for providers.”

Con: Higher penalties for price transparency noncompliance

A major sticking point for hospital groups is CMS’ proposal to increase penalties imposed on hospitals that are not compliant with new price transparency requirements. The CY 2022 OPPS rule would implement a minimum civil monetary penalty of $300 per day for smaller hospitals with a bed count of 30 or fewer and $10 per bed per day for hospitals with a bed count greater than 30, up to a daily dollar amount of $5,500. This means the maximum penalty per hospital would increase from about $110,000 per year to over $2 million per year.

“More stringent penalties for noncompliance with rules whose potential effects even the administration cannot quantify is the wrong direction for this policy,” said Siegel of America’s Essential Hospitals. “Further, as the ongoing COVID-19 public health emergency strains providers, the agency’s price transparency proposals, including a baseless increase in penalty amounts for noncompliant hospitals that targets hospitals with higher bed counts, would burden a workforce already under immense pressure.”

Hospitals have cited ongoing pressures from COVID-19 as a reason why CMS should delay price transparency requirements. Compliance with the requirements has been low since the requirements went into effect at the start of this year, with recent data showing that an overwhelming majority of randomly selected hospitals were not compliant with at least one major requirement.

“We will closely review the agency’s regulations related to price transparency and advocate that any final policies meet this objective. However, we are deeply concerned about the proposed increase in penalties for non-compliance, particularly in light of substantial uncertainty in the interpretation of the rules,” AHA’s Hughes stated.

Con: 340B payment rate methodology

Much to the disappointment of hospitals, CMS is proposing to maintain a payment rate methodology that has resulted in significant cuts to hospital outpatient reimbursement for drugs acquired through the 340B Drug Pricing Program. The CY 2022 OPPS proposed rule would keep rates at average sales price (ASP) minus 22.5 percent for qualifying outpatient drugs—the rate at the center of a Supreme Court case brought on by hospital groups.

“We are deeply disappointed that CMS has proposed perpetuating this inequitable payment policy that originated during the previous administration,” Maureen Testoni, 340B Health President and CEO, said publicly.

“The payment cuts of nearly 30 [percent] that have been in place since 2018 have made it more difficult for these hospitals to provide critical health services and support to these patients in need. The reductions have forced some of these hospitals to cut services or cancel care expansion plans to maintain other core services for their patients and communities.”

America’s Essential Hospitals and Premier also decried the proposed policy for similar reasons.

“We are disappointed that CMS continues its misguided 340B drug pricing policy, eliminating savings that hospitals use to provide support in underserved areas,” explained Blair Childs, senior vice president of public affairs at Premier.

Pro: Health equity, access to care requests

While not policy yet, CMS is calling on stakeholders in the CY 2022 OPPS proposed rule to provide more information on ways the agency can advance health equity and access to care for rural patients. Specifically, the proposed rule would set forth a request for information on ways to report health disparities based on social risk factors and a separate request for information on policy proposals for CY 2023 that would establish a new type of rural emergency hospital.

“We also welcome the request for information on the Rural Emergency Hospital model, which will help rural hospitals continue to serve as an access point to care in their communities,” AHA’s Hughes stated. “The pandemic has been especially challenging to rural facilities and this model will help to ensure that patients continue to have the access they need.”

The COVID-19 pandemic has shone a light on the shortcomings of rural access to care and health disparities. Hospitals are making both top priorities in order to ensure access to care and health equity in a post-pandemic environment. The new proposed rule indicates that CMS is also making these top priorities and health policy is soon to follow.