Wed. Oct 5th, 2022

Hospital outpatient providers could see a $6.2 billion increase in Medicare reimbursements next year under a proposed rule issued Friday.

In addition, the draft regulation provides more details on the agency’s new rural emergency hospital program, which is designed to help facilities in remote areas remain open.

Medicare would pay 2.7% more for outpatient and ambulatory surgical center services in 2023 under the proposed rule. The agency also would extend reimbursement for behavioral telehealth care beyond the COVID-19 pandemic and would offer higher payments when providers purchase U.S.-made N95 respirators, which typically are costlier than foreign-made products. The rule offers insight into how CMS may respond to a recent Supreme Court decision on 340B payment cuts as well.

CMS proposed conditions of participation for the new rural emergency hospital designation last month that include eliminating acute care inpatient services. The draft outpatient payment regulation offers more insight into how the agency wants to run the rural emergency hospital program, which is designed to help facilities in remote areas remain open. Some rural hospital leaders are skeptical the program will have much impact.

Facilities designated as rural emergency hospitals would be eligible for a 5% Medicare reimbursement boost for covered outpatient services. The outpatient payment rule proposes that this not translate into higher coinsurance costs for beneficiaries. The regulation states that all outpatient services these hospital provide would be deemed rural emergency hospital services. Rural emergency hospitals can provide other services, although they wouldn’t receive extra payments for them. Under the proposal, rural emergency hospitals would get monthly facility payments that rise annually based on the hospital market basket.
CMS proposes extending exceptions under the self-referral law to allow physician ownership or investment interests in rural emergency hospitals. The statute known as the Stark law after late Rep. Pete Stark (D-Calif.) prevents physicians from directing Medicare patients to providers in which they have financial stakes. CMS suggests revising the policy to make existing exemptions applicable to compensation agreements to which rural emergency hospitals are parties, according to the fact sheet.
CMS also wants to reduce the administrative burden for critical access hospitals seeking rural emergency hospital status, which the agency believes could help ease provider enrollment into the new program.
The agency plans to release the final conditions of participation and payment policies for rural emergency hospitals in a single final rule this fall.

Additionally, CMS indicated it will get rid of payment cuts for drugs acquired through the 340B program in 2023. The Supreme Court last month decided that CMS improperly cut payment for 340B drugs when it changed its payment policy in 2018.

CMS wasn’t able to adjust its proposed continuation of the cuts for 2023 due to the timing of the Supreme Court decision, but it plans to remove the cuts in its final policy, the agency said in the rule. CMS also asked for comments on the best way to remedy the payment cuts implemented between 2018 and 2022. The earlier policy was budget-neutral and the agency already redistributed the savings from the 2018 cuts to hospitals.

Hospital outpatient departments could also deliver behavioral health services remotely beyond the COVID-19 public health emergency under the proposal. Outpatient departments can currently offer telehealth behavioral health services under Medicare due to waivers that will expire with the emergency declaration.

“If beneficiaries cannot continue to receive these services in their homes from hospital clinical staff, they may not be able to continue receiving behavioral health services, which may lead to loss of access to care, particularly in rural and/or underserved areas,” CMS said in a fact sheet.

CMS proposes allowing outpatient departments to be reimbursed for telehealth or audio-only behavioral health services so long as the beneficiary is seen in-person within six months before starting remote care, and seen in-person at least every 12 months after. CMS would allow certain exceptions to the in-person visit requirement.

The agency also suggests offering a pay boost to compensate for the extra costs of buying domestically-produced N95 respirators. Payments would be given biweekly as a lump sum to the hospital, and reconciled in cost reports.

CMS asked for feedback on measures that should be included in the Rural Emergency Hospital Quality Reporting Program, as well as considerations for reporting quality measure results stratified by patient social risk factors and demographics. CMS also wants to know if it should release further data on provider mergers, acquisitions, consolidations and ownership changes. The agency released data on hospital and nursing home ownership earlier this year.

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