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OPPS 2022 Final Rule Summary [PODCAST]

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The Hospital Finance Podcast

In this episode, we welcome back Josh Weissenborn, BESLER’s Reimbursement Services Manager, to give a summary of the 2022 OPPS Final Rule. Josh will focus on the key changes and how they may impact your facility.

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Highlights of this episode include:

  • Noteworthy changes from the OPPS Final Rule
  • Repeal of the elimination of the Inpatient Only list
  • How this repeal impacts providers
  • The five criteria to determine removal of procedures
  • Changes around price transparency

Mike Passanante: Hi, this is Mike Passanante and welcome back to the award-winning Hospital Finance podcast. Each year, CMS issues its OPPS final rule, and this year I’m joined by Josh Weissenborn, a senior manager on our reimbursement team here at Besler, to talk about some of the highlights of that rule. Josh, welcome back to the show.

Josh Weissenborn: Thanks, Mike. Appreciate you having me.

Mike: So as I just mentioned, the outpatient prospective payment system and ambulatory surgical center final rule is out. Were there any noteworthy changes this year, Josh?

Josh: Yeah. So there’s a couple of updates that I want to discuss in this podcast. So I’m going to focus on the most significant updates where we see providers experiencing the greatest impact, which will include the repeal of the elimination of the inpatient only list, as well as increased penalties for providers’ non-compliance with the pricing transparency rules.

Mike: Certainly two hotspots. So let’s start off by talking about the repeal of the elimination of the inpatient only list. Can you give me some background on the elimination and subsequent repeal of this elimination?

Josh: Yeah, absolutely. So I’m just going to start with a little bit of background in terms of what the inpatient only list is, and I’ll just refer to this as the IPO list going forward. And so what this is, it’s a list of procedures that Medicare will pay for when care takes place in a hospital inpatient setting. So you must establish this list to really control the quality of care that beneficiaries are receiving, and this is usually related to higher-risk procedures that require additional care. So if those procedures do not occur in the inpatient setting in, then Medicare wouldn’t pay for those services. So in the calendar year 2021 OPPS final rule, CMS made the decision to repeal the IPO list to give beneficiaries greater choices in the care that they receive, and this was to happen over a three year period. In 2021, CMS removed around 300 procedures. However, due to concerns from providers around patient safety by removing the IPO list, CMS decided to repeal this elimination in 2022. In addition, CMS has five long standing criteria that are relating to the removal of procedures from the list, which have now been codified.

Mike: Okay, so some additional specifics now. Has CMS added back everything that was removed from the IPO list initially?

Josh: So CMS has added back in majority of the services this year, which were removed from the list in 2021. And you can refer to table 45 in the final rule for those procedures that were added back to the IPO list in 2022, table 46 in the final rule for those procedures which will not be added back to the IPO list. And then you can also refer to table 48 in the final rule just for all the changes that were made to the list.

Mike: And Josh, how does this repeal impact providers?

Josh: Yeah, so in the 2021 OPPS final rule, CMS established a policy in which procedures removed from the IPO list beginning January 1st, 2021 would be indefinitely exempted from certain medical review activities which were related to the two-midnight policy. As part of this policy, procedures to remove on or after January 1st, 2021 from that IPO list would be exempt from certain recovery audit contractor or RAC reviews for patient stays, and this would be for two years. However, it was CMS bringing back the majority of these procedures to the inpatient only list. There will no longer be those exemptions from these reviews, and therefore providers should expect audit activity to resume for these procedures.

Mike: Josh, earlier you mentioned that CMS also decided to codify the five long standing criteria to determine removal of procedures from the IPO list. Can you tell us what those five criteria are?

Josh: Yeah, absolutely. So the criteria are going to be as follows. So the first one would be most outpatient departments are equipped to provide the services to the Medicare population. Two, the simplest procedure described by the code may be furnished in most outpatient departments. Three, the procedures related to codes that CMS has already removed from the IPO list. Four, a determination is made that the procedure being furnished in numerous hospitals on an outpatient basis. And last but not least, a determination is made that the procedure can get appropriately and safely furnished in ambulatory surgical center or ASC, and it’s on the list of approved ASC services or has been proposed by CMS for addition to the ASC list. And just keep in mind that a procedure is not required to meet all of those established criteria in order to be removed from the IPO list.

Mike: Okay, let’s switch gears and we’ll talk about price transparency now. So, if we jump into the changes around price transparency, which now establishes increased monetary penalties for non-compliant providers, can you tell me more about these changes?

Josh: Absolutely. So CMS has amended hospital pricing transparency policies to really encourage compliance with the pricing transparency rules. So currently, the penalties for non-compliance are $300 per day for all providers, regardless of provider size for number of beds, with a maximum penalty of $109,500 per year. And as finalized in the 2022 final rule, the following changes were made to the pricing transparency penalties, which will begin on January 1st, 2022. So the first category would be those smaller providers with a bed count of 30 beds or fewer. And that’s going to remain at that $300 per day penalty. But for providers with the bed count of greater than 30, there’s going to be a penalty of $10 per bed per day that will be applied. And this will not exceed a maximum daily daily dollar amount of $5,500 per day. The minimum total penalty amount would be $109,500 per hospital per year, and the maximum total penalty amount would be $2,007,500 per hospital per year. If the number of beds cannot be determined from the cost report data and a provider does not provide documentation to support the number of beds, then the private provider would automatically receive the maximum penalty. In addition, CMS prohibits the conduct in which providers create barriers to accessing the standard charge information. So CMS will update the list of activities that present barriers to accessing the machine readable files, and they’ll specifically require that the machine readable file is accessible to automated searches as well as direct downloads.

And then just kind of going back to something I mentioned in the Federal Fiscal Year 2020 IPPS Podcasts and Webinar, we do strongly believe that CMS is pushing this pricing transparency requirements to the cost report to ensure DRG payments are in line with other payers. In addition, although worksheet S12 is no longer a requirement on the cost report for the time being, we do believe that CMS will eventually move the pricing transparency reporting requirements to the cost report, which could also mean further monetary penalties for non-compliance beyond the penalties I just discussed, which would include the rejection of cost reports as well as the subsequent withholding of interim payments.

Mike: Are there any hospitals that would be exempt from the pricing transparency requirements?

Josh: Yes. So pricing transparency requirements are now not applicable for state forensic hospitals to provide treatment exclusively to individuals who are in the custody of penal authorities and do not offer services to the general public.

Mike: And are there any other considerations around price transparency in the rule?

Josh: Yeah. So hospitals may choose to use an online price estimator tool in lieu of posting their standard charges for around 300 or so shoppable services. And this would need to be done in a consumer friendly format. In the final rule CMS clarified the expected output of hospital online price estimator tools, and specifically, this online price estimator must provide a cost estimate to an individual that takes the individual’s insurance information into account. And in addition, that estimate must reflect the amount the hospital anticipates will be paid by the individual or really that out-of-pocket costs for that particular service.

Mike: And we really just scratched the surface of the OPPS final rule here in today’s podcast. On Wednesday, December 1st, Josh is going to be delivering a much more extensive webinar walking through more of the changes that you can find in the OPPS final rule. If you’d like to get the slides or watch a recording of that webinar, you can head up to besler.com, click on the insights tab, look for reimbursement and you’ll find it there. Josh, thanks so much for joining us today on the Hospital Finance podcast.

Josh: All right. Thank you, Mike. Appreciate it.

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