CMS Releases 2021 OPPS Final Rule, Eliminates Inpatient Only List

CMS has released the Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) final rule for 2021 in an effort to give Medicare beneficiaries more choices around surgical services.

The OPPS final rule released earlier today will start eliminating the inpatient only list starting on January 1, 2021, as part of the agency’s efforts to increase choices around surgery.

The inpatient only list is a series of 1,700 procedures for which Medicare will only pay when performed in the hospital inpatient setting. But CMS has raised concerns that the list has restricted patient choice when it comes to surgery and recently proposed to phase out the list.

The OPPS final rule will do just that over the next three years, starting with around 300 primarily musculoskeletal-related services in 2021. The elimination of the list will make the services payable when furnished in the hospital outpatient setting when outpatient care is appropriate.

CMS agency also finalized the addition of 11 procedures to the ASC covered procedures list. Under the ASC final rule, Medicare will pay providers for furnishing common services like total hip arthroplasty in ASCs.

The agency also intends to add more services to the ASC covered procedures list next year under new criteria finalized in the ASC final rule. Under the revised criteria, 267 surgical procedures will be added to the list starting January 1.

The policies should help lower costs for Medicare beneficiaries by allowing services to be performed in lower-cost settings compared to the inpatient setting. They should also help hospitals facing capacity issues because of the COVID-19 pandemic, CMS explained in the rule.

“President Trump’s term in office has been marked by an unrelenting drive to level the playing field and boost competition at every turn,” CMS Administrator Seema Verma said about the rules. “Today’s rule is no different. It allows doctors and patients to make decisions about the most appropriate site of care, based on what makes the most sense for the course of treatment and the patient without micromanagement from Washington.”

Additionally, CMS moved forward with reducing hospital reimbursement for drugs acquired under the 340B Drug Pricing Program.

Under the 2021 OPPS final rule, CMS will pay for 340B-acquired drugs at the average sales prices of the drug minus 22.5 percent versus an older payment methodology in which CMS paid the average sales price plus 6 percent.

The agency decided to continue with the new payment formula after the Court of Appeals for the D.C. Circuit shot down attempts made by hospitals to challenge it.

CMS stated in the final OPPS final rule that the updated payment formula for 340B-acquired drugs is slated to save Medicare beneficiaries nearly $300 million in drug costs next year, bringing total savings to $1 billion over the last three years.

However, hospitals are expected to see a 2.4 percent increase in Medicare outpatient reimbursement despite the payment cuts for 340B-acquired drugs.

CMS also finalized a 2.4 percent increase in reimbursements to ASCs in 2021.

Other key provisions in the rule include:

• Changes to the Hospital Quality Star Rating system, including the combination of three existing process measure groups into a new Timely and Effective Care group and the use of a simple average methodology for calculating measure group scores
• Updates to the Hospital Outpatient Quality Reporting Program and ASC Quality Reporting Program
• Approval of five new pass-through applications for BAROSTIM NEO™ System, Hemospray® Endoscopic Hemostat, the SpineJack® Expansion Kit, CUSTOMFLEX® ARTIFICIALIRIS, and EXALT™ Model D Single-Use Duodenoscope
• Prior authorization requirement for cervical fusion with disc removal and implanted spinal neurostimulators starting July 1, 2021
• Flexibilities for physician-owned hospital compliance with the Stark Law

To view the complete final rule, click here. Comments will be available once the final rule is published on the Federal Register and will last for 60 days.