HHS Reopens Provider Relief Fund for Certain Providers, and CMS’ Proposed Outpatient Prospective Payment System Makes Some Significant Changes to Payment Rates and Policies

For more information about this blog post, please contact Khaled J. KleleRyan M. MageeLabinot Alexander BerlajolliBrianna J. Santolli, or Daniel J. Parziale.

For those Medicaid, Children's Health Insurance Program (“CHIP”) and dental providers who missed out on the $20 billion second tranche from the general Provider Relief Fund, the Department of Health and Human Services (“HHS”) recently announced that it would reopen the application process.  Do not assume you will not receive funds. The Provider Relief Fund has been a valuable source of funding for many providers during COVID-19 so apply when it reopens.

Just as important, the Centers for Medicare & Medicaid Services ("CMS") released its proposed Outpatient Prospective Payment System (“OPPS”) for 2021, which makes some significant to moderate changes to payment rates and policies, especially for ambulatory surgery centers. 

HHS Reopens Provider Relief Fund for Medicaid, CHIP and Dental Providers

HHS has announced that eligible Medicaid, CHIP and dental providers will now have until August 28, 2020 to apply for funding distribution from the $15 billion that was specifically allocated to these providers back in June 2020 from the Provider Relief Fund. These providers can receive up to 2 percent of reported revenue from patient care. The initial deadline of July 20, 2020, was extended to August 3, 2020, based on feedback by providers that they learned about the program too close to the deadline and needed more time to complete their application. HHS believes that a second extension would be beneficial and hopes that the new August 28 deadline will provide ample time to providers. 

Also, HHS intends to reopen the portal to these providers for the Medicare General Distribution Fund. Starting the week of August 10, HHS will permit Medicaid, CHIP and dental providers that missed the opportunity to apply for additional funding from the $20 billion second tranche of the $50 billion Medicare General Distribution. HHS has also decided to open this fund up to providers who experienced a change in ownership who were previously prevented from applying. The portal will close August 28. 

For more information regarding the application process, review the fact sheet published by HHS.

Outpatient Prospective Payment System Proposed Rule

CMS released its Outpatient Prospective Payment System (“OPPS”) proposed rule for 2021. The proposed rule, comprising 785 pages of updated payment policies and payment rates for services, is open to public comment until October 5, 2020. This proposed rule makes some significant to moderate changes to payment rates and policies for outpatient services, including the following:

1. Increase in Payment Rate: CMS increased the payment rates under the hospital OPPS by a factor of 2.6 percent, which should increase payments to providers by approximately $7.5 billion from 2020.

2. Inpatient Only ("IPO") List: The IPO list refers to procedures and services that CMS has identified as typically only provided in the inpatient setting and therefore not paid under OPPS. Many procedures on the IPO list are surgical procedures that may be complex.  In this proposed rule, CMS seeks to eliminate the IPO list over the course of three years beginning with the removal of approximately 300 services. By eliminating the IPO list, CMS is allowing physicians to decide the setting to perform the procedure. This may increase procedures performed in ambulatory surgery centers, but CMS would need to either eliminate the ASC payable list and begin reimbursing ASCs for the procedures or, alternatively, add the procedures to the ASC payable list. 

3. Physician-Owned Hospitals: To further encourage physician-owned hospitals, the proposed rule removes unnecessary regulatory restrictions on high Medicaid facilities defined as those serving more Medicaid inpatients than other hospitals in their counties. For example, CMS proposes eliminating the cap on the number of additional operating rooms, procedure rooms, and beds that could be approved as an exception to the moratorium on physician-owned hospitals.

4. Partial Hospitalization: CMS proposes to maintain the unified rate structure established in 2017, with a single Partial Hospitalization Program ("PHP") Ambulatory Payment Classifications ("APC") for each provider type for days with three or more services. 

5. Review of Medicare Part A Admissions: The proposed rule continues a 2-year exemption from Beneficiary and Family-Centered Care Quality Improvement Organizations ("BFCC-QIOs") referrals to Recovery Audit Contractors ("RACs") and RAC review for “patient status” for procedures that are removed from the IPO list.

6. 340B Acquired Drugs: CMS is cutting the payment rate for 340B drugs, by paying hospitals 28.7% less than the average sales price for certain drugs purchased through the program.

7. Comprehensive APCs: The proposed rule creates two new Comprehensive APCs: Level 8 Urology and Related Services and Level 5 Neurostimulator and Related Procedures.

8. Outpatient Therapeutic Services Supervision: CMS proposes to change the minimum default level of supervision for non-surgical extended duration therapeutic services to general supervision for the entire service. It also includes the virtual presence of a supervising physician for pulmonary rehabilitation, cardiac rehabilitation, and intensive cardiac rehabilitative services.

9. Cancer Hospital Payment Adjustment: The proposed rule reduces additional payments to cancer hospitals by 1.0 percentage point.

10. Changes to the ASC Payment Rates

a. CMS proposes to increase the payment rate by 2.6% if quality reporting requirements are met. Based on this update, CMS estimates $5.45 billion in total payments to ASCs for 2021—an increase of $160 million compared to 2020. The rule also proposes an ASC conversion factor of $48.984 compared to the proposed hospital outpatient department conversion factor of $83.697. The conversion factor is essentially a base payment amount that is adjusted using relative weights.  

b. CMS proposes to add eleven procedures to the ASC covered procedures list: (1) 0266T (Implt/rpl crtd sns dev total); (2) 0268T (Implt/rpl crtd sns dev gen); (3) 0404T (Trnscrv uterin fibroid abltj); (4) 21365 (Opn tx complx malar fx); (5) 27130 (Total hip arthroplasty); (6) 27412 (Autochondrocyte implant knee); (7) 57282 (Colpopexy extraperitoneal); (8) 57283 (Colpopexy intraperitoneal); (9) 57425 (Laparoscopy surg colpopexy); (10) C9764 (Revasc intravasc lithotripsy); and (11) C9766 (Revasc intra lithotrip-ather).

c. CMS also proposes to change the way it adds codes to the ASC payable list in the future. Specifically, CMS proposes establishing a nomination process that would engage external stakeholders to recommend procedures for the ASC payable list. Similarly, CMS proposes revising the criteria for the ASC payable list by eliminating five of the general exclusion criteria and adding 270 potential surgery or surgery-like codes to the payable list.

11. Outpatient Quality Reporting ("OQR") and Ambulatory Surgery Center Quality Reporting ("ASCQR") Programs: The rule proposes to revise and codify existing administrative procedures with the purpose of furthering meaningful measurement and reporting for quality of care.

12. Hospital Quality Star Ratings: The rule changes the methodology to calculate overall hospital quality star ratings beginning with 2021 and for subsequent years.

13. Prior Authorizations: CMS added two categories of services to the prior authorization process, effective July 1, 2021: (1) cervical fusion with disc removal; and (2) implanted spinal neurostimulators.

14. Clinical Laboratory Date of Service Policy: CMS proposes to exclude cancer-related protein-based Multianalyte Assays with Algorithmic Analyses ("MAAAs") from the OPPS packaging policy and adds them to the laboratory DOS provisions.