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Medicare Proposed Rule for FY 2022: Outpatient Prospective Payment System (OPPS)

08.03.21

Release Date: July 19, 2021
Federal Register Publication Date: TBD 
Effective Date: Comments Due to CMS by September 17, 2021

OPPS/ASC Proposed Rule:

Update Factors*: Final FY21 Proposed FY22
Hospital Market Basket     2.4% 2.5%
Economy wide productivity adjustment (.0%) (.2%)
OPPS/ASC Payments rates 2.4% 2.3%

*Hospitals meet applicable quality reporting requirements. 

This year’s proposed rule Update updates and refines the requirements for the Hospital Outpatient Quality Reporting (OQR) Program and the ASC Quality Reporting (ASCQR) Program, updates Hospital Price Transparency requirements, and updates and refines the design of the Radiation Oncology Model.  Below are some takeaways from the proposed rule:

  • The proposed rule is proposing modifications to increase Hospital Price Transparency compliance beginning January 1, 2022.
    • Minimum Civil Monetary Penalty (CMP) of $300/day applicable to smaller hospitals with a bed count of 30 or fewer and apply a penalty of $10/bed/day for hospitals with a bed count greater than $30, not to exceed a maximum daily dollar amount of $5,500. For a full calendar year of noncompliance, the minimum total penalty amount would be $109,500 per hospital, and maximum total penalty amount would be $2,007,500 per hospital.
    • An online price estimator tool must provide a cost estimate to an individual that takes the individual’s insurance information into account with the estimate reflecting the amount the hospital will be paid for the shoppable service.
  • A new provider type called Rural Emergency Hospitals (REH) effective January 1, 2023.
    • REH are hospitals that convert from either a Critical Access Hospital (CAH) or a rural hospital with less than 50 beds that do not provide acute care inpatient services, with exception of skilled nursing facility services.
    • REH’s will be required to furnish emergency department services, observation care, and other outpatient medical services. 
  • Reverse phased elimination of the Inpatient Only (IPO) list. 
  • Section 340B allows participating hospitals and other providers to purchase certain covered outpatient drugs from manufacturers at discounted prices. CMS reexamined the Average Sales Price (ASP) plus 6 percent of drugs acquired through 340B program.
    • Proposing to maintain payment rate of ASP minus 22.5 percent for certain separately payable drugs acquired through the 340B Program.
    • Proposal have the following hospitals exceptsed the following hospitals from the policy: rural sole community, children’s hospitals, and PPS-exempt cancer hospitals. 
  • Radiation Oncology (RO) Model begin on January 1, 2022 with 5 year performance period as this would change the model’s timing.
    • Baseline period from 2016-2018 to 2017-2019.
    • Lower discounts to 3.5 percent (Professional Component) and 4.5 percent (Technical Component).
    • Revise the cancer inclusion criteria under the RO Model.
    • Exclude outpatient departments participating in the Community Transformation track in the RO Model. 
  • Quality Reporting Program proposed:
    • For Hospital Outpatient, CMS proposing to have three new measures which include COVID-19 Vaccination of Health Care Personnel, make reporting of two voluntary or suspended measures mandatory, remove two measures, and update validation policies. 
    • For Ambulatory Surgical Center, CMS proposing to adopt one new measure which is the COVID-19 Vaccination of Health Care Personnel, and make the reporting of six voluntary or suspended measures mandatory. 

Sources: CMS CY 2022 Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System Proposed Rule (CMS-1753-P)

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