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2021 OPPS final rule summary [PODCAST]

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The Hospital Finance Podcast

In this episode, we are joined by Jimmy Mendez, Senior Manager at BESLER, to discuss highlights from the recently published 2021 OPPS final rule.  

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Highlights of this episode include:

  • Updates on the 2021 OPPS and ASC payment rates.
  • Details on the changes to Section 340B of the Public Health Service Act.
  • What is the fate of the inpatient-only list as of January 1st, 2021?
  • Notable changes regarding coverage of ASC procedures.
  • And more…

Mike Passanante: Hi, this is Mike Passanante and welcome back to the award-winning Hospital Finance Podcast®. The OPPS final rule for 2021 has published, and to review some highlights of that new rule I’m joined by Jimmy Mendez, who’s a senior manager on our reimbursement team here at BESLER. Jimmy, welcome back to the show.

Jimmy: Thank you, Mike, it’s good to be here.

Mike: So Jimmy, we’re going to go through just a few of the items that appeared in this rule. Let’s start off. What can we expect regarding the OPPS payment rate and the ASC payment rate?

Jimmy: Mike, the increase will be 2.4% for the OPPS payment rate. Based on this update, CMS estimates the total payments to OPPS providers for calendar year 2021 will be approximately $84 billion, which represents an increase of seven and a half billion from the previous year. The statutory 2% reduction in payments for hospitals that failed to meet the hospital outpatient quality reporting requirements will continue. Now, CMS has adopted a policy to update the ASC payments system using the hospital market basket update. The ASC payment rate update will also be 2.4% as a result for hospitals that meet applicable quality reporting requirements. CMS feels this update will help to promote site neutrality between hospitals and ASCs and encourage the migration of services from the hospital setting to the lower cost ASC setting. Total payments to ASCs are projected to be around $5.4 billion, which is an increase of $120 million from last year.

Mike: And Jimmy, every year it seems like the 340B program is a hot button issue. Are there any changes regarding that program this year?

Jimmy: Well, Mike, as you know, Section 340B of the Public Health Service Act allows participating hospitals and other providers to purchase certain covered outpatient drugs from manufacturers at discounted prices. In the previous year CMS was paying the average sales price, or ASP, minus 22 and a half percent. They initially proposed to change that to ASP minus 28.7%, but in the end they decided to keep it at ASP minus 22 and a half percent. CMS believes that maintaining the current payment policy is appropriate in order to maintain consistent and reliable payment during this public health emergency we are in. The 340B payment policy continues to exempt rural, sole-community hospitals, children’s hospitals, and PPS-exempt cancer hospitals will continue to be paid at ASP plus 6%. Hospitals have challenged CMS in court in efforts to reduce the payment reduction but have been unsuccessful.

Mike: Let’s talk a little bit about the inpatient-only list. Can you describe that for us and explain what the plans are for that?

Jimmy: Sure. The impatient-only list is a series of 1,700 procedures for which Medicare will only pay when performed in the hospital inpatient setting. However, CMS has raised concerns that this list has restricted patient choice when it comes to surgery and recently proposed to phase out the list altogether. The phase out period will take three years and will commence on January 1st, 2021, beginning with around 300 primarily musculoskeletal related services.

Mike: Were there any notable changes regarding coverage of ASC procedures?

Jimmy: Well, there appears to be a theme of facilitating the shifting the procedures from an inpatient setting to an ASC setting. This includes the addition of 267 surgical procedures to the covered procedures list starting on January 1st, 2021. A list of these can be found in table 60 on page 852 of the 2021 OPPS final rule.

Mike: Thanks, Jimmy. And we’ve really just scratched the surface here; there are obviously a number of other aspects to the OPPS final rule, and Jimmy has just delivered a webinar with a lot more detail on it about the OPPS final rule. You can find a recording of that webinar at Just head up to the Insights button in the upper right-hand corner, click on the reimbursement button on the next page, and you will see the webinar that Jimmy delivered on this topic. Jimmy, thanks so much for coming back to the podcast today.

Jimmy: You’re welcome, Mike.



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