News Releases

CMS Final Payment Rules Include Outpatient and 340B Increases

The Centers for Medicare and Medicaid Services (CMS) last week released the final rule for the 2023 Medicare outpatient prospective payment system (OPPS) and ambulatory surgical center (ASC) payment system, which include an outpatient payment update of 3.8%.

CMS also finalized the payment policy for calendar year (CY) 2023 of average sales price (ASP) +6% for drugs and biologicals acquired through the 340B Program. This comes as a result of the unanimous U.S. Supreme Court decision in American Hospital Association v. Becerra.

The American Hospital Association (AHA) acknowledged the improvement in the OPPS payment update in the final rule compared to the proposed rule, which contained a 2.7% update, but expressed concern payments still fall short of the rising costs hospitals face.

In a statement AHA Executive Vice President Stacey Hughes said, “While the AHA is pleased that CMS will provide hospitals and health systems with an improved update to outpatient payments next year compared to the agency’s proposal in July, the increase is still insufficient given the extraordinary cost pressures hospitals face from labor, supplies, equipment, drugs and other expenses. As we urged, CMS will use more recent data in its calculations on the payment update, resulting in more accurate data that better reflects the historic inflation and tremendous financial pressures hospitals and health systems have confronted recently. However, hospitals are still dealing with a wide range of challenges in providing care, which is why the AHA is urging Congress for additional support by the end of the year.”

On the 340B update, CMS stated it would defer any proposal of a remedy for the 2018-2021 payment cuts until sometime before next year’s CY 2024 payment rule. During this delay, the AHA will continue to urge the United States District Court for the District of Columbia to order CMS to promptly reimburse those hospitals that were harmed by their unlawful cuts in previous years, while ensuring that the remainder of the hospital field is not penalized for the prior unlawful policy.

Final rules were also released on the physician fee schedule and home health services. The physician fee schedule rule will cut the conversion factor to $33.06 in CY 2023 from $34.61 in CY 2022, which reflects the expiration of the temporary 3% statutory payment increase; a 0.00% conversion factor update; and a budget-neutrality adjustment.

CMS also made updates to several policies for telehealth and opioid treatment programs. For telehealth, the final rule makes available at least through CY 2023 several services temporarily available as telehealth services for the COVID-19 public health emergency, and updates the originating site facility fee for CY 2023. The final rule also updates opioid treatment program payment rates.

The final rule for the home health prospective payment system increases payments by a net 0.7%, or $125 million, in 2023 relative to 2022.

Going into the final stretch of the legislative session, AHA is encouraging hospitals to reach out to their members of Congress and share the following messages:

• Prevent any further damaging cuts to health programs, including stopping the forthcoming 4% Statutory Pay-As-You-Go (PAYGO) sequester.
• Establish a temporary per diem payment targeted to hospitals to address the issue of hospitals not being able to discharge patients to post-acute care or behavioral facilities because of staffing shortages.
• Increase the number of Medicare-funded graduate medical education positions to address the need for additional physicians in the U.S.
• Extend, or make permanent, the Low-volume Adjustment and the Medicare Dependent Hospital programs — critical rural programs that are due to expire on Dec. 16.
• Make permanent the expansion of telehealth services and extend the hospital-at-home program.
• Finalize passage of the Improving Seniors Timely Access to Care Act, which streamlines prior authorization requirements under Medicare Advantage plans.
• Create a special statutory designation for certain hospitals that serve marginalized urban communities.

The Center for Health Affairs will be reaching out to the Northeast Ohio congressional delegation to advocate for hospitals on these points.