CMS Proposes 2022 OPPS Rates, Higher Hospital Price Transparency Penalty

CMS is seeking greater hospital price transparency enforcement through the newly proposed Medicare Outpatient Prospective Payment System (OPPS) rule for calendar year (CY) 2022.

The rule proposed earlier today would increase the monetary penalty CMS can impose on hospitals that fail to comply with the price transparency requirements that took effect on January 1, 2021. Those requirements include publishing payer-specific negotiated rates and other pricing information on the hospital’s public website and providing a consumer-friendly list of prices for shoppable services.

If the rule is finalized as is, the penalties would increase to 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, for a full calendar year of noncompliance, hospitals could be penalized a maximum of $2,007,500. The minimum for a full calendar year of noncompliance would be $109,500 per hospital.

Hospital price transparency compliance has been inconsistent and spotty despite a CMS notice late last year that said the agency would audit and penalize hospitals if they were found to be non-compliant with the requirements. The penalty at the time was up to $300 per day.

“As President Biden made clear in his executive order promoting competition, a key to price fairness is price transparency,” HHS Secretary Xavier Becerra said in an announcement. “No medical entity should be able to throttle competition at the expense of patients. I have fought anti-competitive practices before, and strongly believe health care must be in reach for everyone. With today’s proposed rule, we are simply showing hospitals through stiffer penalties: concealing the costs of services and procedures will not be tolerated by this Administration.”

The CY 2022 OPPS proposed rule would also boost hospital Medicare reimbursement next year by 2.3 percent. The increase is based on the projected hospital market basket increase of 2.5 percent reduced by 0.2 percentage points for the productivity adjustment.

Meanwhile, ambulatory surgical centers (ASCs) are also slated to see a 2.3 percent increase in Medicare reimbursement next year as long as the facilities meet relevant quality reporting requirements.

Additionally, CMS proposed to maintain the payment rate of average sales price (ASP) minus 22.5 percent for certain separately payable drugs or biologicals acquired through the 340B Drug Pricing Program. The payment rate was implemented in 2018 and significantly cut hospital reimbursement for facilities participating in the federal program.

The American Hospital Association and other national industry groups have challenged the new payment rate methodology for 340B drugs. The Supreme Court has agreed to hear their case in court when they return for the term starting October 2021.

The proposed rule would also update the Radiation Oncology Model, halt the phased elimination of the Inpatient-Only (IPO) list, and revise exemptions for procedures removed from the IPO list last year, among dozens of other health policies.

To read the complete proposed rule, click here. CMS has also provided a fact sheet on the proposed rule, which can be found here.

Coverage of this proposed rule is ongoing. Please check back for updates.