2024 Medicare Outpatient Prospective Payment System Proposed Rules


The OPPS proposal lacked any mention of several prominent issues that industry leaders have eagerly awaited reforms on. Yesterday, federal officials introduced two sets of proposed rules, which included possible revisions to the Medicare Physician Fee Schedule (PFS) and Outpatient Prospective Payment System (OPPS) for the 2024 calendar year.

Within the PFS proposed rule alone, the Centers for Medicare & Medicaid Services (CMS) announcement emphasized several key points. These included rate updates, efforts to promote health equity, and initiatives to broaden access to essential medical services, including behavioral healthcare and specific oral health services. Additionally, the PFS proposed rule aligned with the Biden-Harris Administration’s “Cancer Moonshot” mission, aimed at accelerating the battle against cancer.

In a statement, CMS Administrator Chiquita Brooks-LaSure expressed our mission at CMS, which revolves around increasing healthcare accessibility and providing meaningful health coverage to those we serve. The proposed physician payment rule includes CMS’s initiatives to aid Medicare beneficiaries in navigating cancer treatment and gaining access to a broader range of behavioral health providers. It also aims to reinforce primary care services and, notably, proposes Medicare payment for services delivered by community health workers for the first time

CMS’s dedication to advancing health equity and enhancing the Medicare program remains unwavering,” said the CMS Deputy Administrator and Director of the Center for Medicare. “The proposals put forth in this rule, if finalized, will ensure that the individuals we serve receive coordinated care that addresses their comprehensive well-being. This approach takes into account each person’s distinct background and personalized requirements, encompassing physical health, behavioral health, oral health, and social determinants of health. Notably, it also recognizes the vital role of caregivers, all of which are integral to delivering the exceptional care that people with Medicare rightly deserve.

According to officials, the proposed payment amounts under the PFS would see a reduction of 1.25 percent compared to 2023, in compliance with factors mandated by law. Notably, CMS has suggested increasing payments for several visit services, including primary care, which requires corresponding offsetting adjustments to maintain budget-neutrality for all other services paid under the PFS. The proposed conversion factor for the 2024 PFS is set at $32.75, signifying a decrease of $1.14 or 3.34 percent from the 2023 value.

Within the proposed rule, there are provisions for making adjustments to coding and payment for various new services aimed at aiding underserved populations. Officials have highlighted the importance of “addressing unmet health-related social needs that may hinder the diagnosis and treatment of medical conditions.” This involves a proposal to provide payment for specific caregiver training services in specified situations, along with the introduction of distinct coding and payment structures for community health integration services. The goal is to enhance support for vulnerable individuals and communities by addressing social determinants of health that can impact their overall well-being and access to appropriate medical care.

The Cancer Moonshot provision aims to ensure that every individual diagnosed with cancer receives access to services designed to assist patients in navigating cancer treatment and other severe illnesses. This includes care provided by peer support specialists. As part of these changes, the proposed rule also includes provisions for coding and payment availability concerning social determinants of health (SDoH) risk assessments. These assessments could be incorporated as an add-on to an annual wellness visit or in conjunction with an evaluation and management (E&M) visit.

In the press release about the proposed rule, CMS also highlighted newly proposed access to oral and dental health services for beneficiaries, along with a commitment to support patients’ emotional and mental well-being through enhanced behavioral healthcare. Additionally, the proposed rule aligns with the U.S. Department of Health and Human Services (HHS) Initiative to Strengthen Primary Care, furthering efforts to improve the overall quality and accessibility of primary care services.

According to the release, CMS is actively promoting comprehensive whole-person care within the Medicare Shared Savings Program, the nation’s largest Accountable Care Organization (ACO) program. To achieve this, CMS is proposing changes to the assignment methodology, aiming to enhance access to accountable care for individuals seeking primary care services from nurse practitioners, physician assistants, and clinical nurse specialists. Additionally, the agency plans to revise the financial benchmarking methodology to encourage greater participation from ACOs serving complex populations. As a result of these proposals, it is anticipated that participation in the Shared Savings Program will increase by approximately 10 to 20 percent, creating additional opportunities for beneficiaries to receive coordinated care from ACOs.

In a related announcement, CMS highlighted its efforts to strengthen the Medicare Diabetes Prevention Program (MDPP) Expanded Model and improve access in underserved communities. The proposal includes extending Public Health Emergency (PHE) flexibilities for four years, allowing all MDPP suppliers to continue offering MDPP services virtually through distance learning delivery until 2027, provided they maintain an in-person Centers for Disease Control and Prevention (CDC) organization code.

Regarding the OPPS proposed rule, there will be a 60-day comment period that is set to conclude in mid-September, followed by the issuance of a final rule expected in November. Alongside proposing payment rates, the rule also includes policy proposals that share some similarities with the PFS plan. These proposed policies revolve around several key objectives, including promoting health equity, expanding access to behavioral healthcare, enhancing transparency in the health system, advocating for safe, effective, and patient-centered care, and addressing issues related to medical product shortages.

Officials have indicated that the OPPS policies will impact around 3,500 hospitals and approximately 6,000 Ambulatory Surgical Centers (ASCs). Moreover, the proposed policies on hospital price transparency are expected to have an effect on over 7,000 institutions that hold hospital licenses.

The new OPPS payment rates will result in a net increase of 2.8% for hospitals that meet the relevant quality reporting requirements.

According to a fact sheet from CMS, the CY 2019 OPPS/ASC final rule with a comment period included a policy to apply the productivity-adjusted hospital market basket update to ASC payment system rates for an interim period of five years (CY 2019 through CY 2023). The purpose of this period was to assess whether there would be a shift in procedures from the hospital setting to the ASC setting due to the use of the productivity-adjusted hospital market basket update.

However, the profound impact of the COVID-19 Public Health Emergency (PHE) on healthcare utilization, particularly in CY 2020, resulted in a significant decrease in elective surgeries as beneficiaries avoided healthcare settings when possible to reduce the risk of infection. As a result, CMS is now proposing to extend the five-year interim period for an additional two years, covering CY 2024 and CY 2025. The extension allows for the collection of more claims data removed from the COVID-19 PHE, enabling a more accurate analysis of whether the application of the hospital market basket update to the ASC payment system influenced the migration of services from hospitals to ASCs.

Furthermore, the OPPS proposed rule introduces a proposal to establish an Intensive Outpatient Program (IOP) under Medicare. This program would include a defined scope of benefits, physician certification requirements, coding and billing guidelines, and payment rates. If finalized, IOP services would be offered in hospital outpatient departments, Community Mental Health Centers (CMHCs), Federally Qualified Health Centers (FQHCs), and Rural Health Clinics (RHCs). The introduction of IOP benefits aims to address one of the primary gaps in behavioral health coverage within the Medicare system.
In a related development, CMS is putting forth a proposal to create two IOP Ambulatory Payment Classifications (APCs) for each provider type. These classifications include one for days with three services per day and another for days with four or more services per day.

However, there are several noticeable omissions in the OPPS announcement, which some industry stakeholders had hoped would be addressed. The proposed rule, as explained by the Vice President of the Regulations and Education Group for R1 RCM Inc., and a regular contributor to the Monitor Mondays weekly Internet radio broadcast and RACmonitor, does not introduce any significant changes. Notably, there are no modifications to the Two-Midnight Rule, no mention of the case-by-case exception, no removals from the Inpatient-Only List (IOL), and only a few codes are proposed to be added to the IOL, specifically for newly assigned codes such as HCPCS 0646T for trans-catheter tricuspid valve implantation.

On a different note, it appears that CMS is expressing dissatisfaction with the efforts hospitals have made to comply with the price transparency rules. As a result, significant changes to the requirements and enforcement methods are being proposed by CMS in response to this concern.