On November 2, the Centers for Medicare & Medicaid Services (CMS) issued the Hospital Outpatient Prospective Payment (OPPS) and Ambulatory Surgical Center (ASC) Payment Systems final rule with comment period, which finalizes updates to the OPPS and the Medicare ASC payment system for calendar year (CY) 2024. See the press release here. CMS has provided a rule overview fact sheet and a hospital price transparency fact sheet. CMS additionally issued the Hospital Outpatient Prospective Payment System (OPPS): Remedy for the 340B-Acquired Drug Payment Policy for Calendar Years 2018-2022 Final Rule, addressed in the 340B section of the summary below. See the fact sheet here.

Among other finalized policies, these rules will:

• apply a payment update of 3.1 percent for CY 2024,
• continue the rural sole community hospital site-neutral payment exemption,
• make several price transparency changes with more generous timelines for enforcement,
• establish payment for intensive outpatient programs,
• update the hospital and ASC quality reporting programs,
• continue pass-through payment for certain drugs, biologicals, and pharmaceuticals,
• continue non-opioid pain management drug and biological payment policies,
• continue 340B payment at average sales price plus 6 percent and finalize payment remedy to 340B hospitals,
• add 9 services to the inpatient only (IPO) list,
• make rural emergency hospital policy changes for Indian Health Services and tribal facilities,
• make changes to community mental health centers’ conditions of participation, and
• approve four of six applications for device pass-through payment.

The OPPS and ASC rule also solicits comment on behavioral health topics under consideration for measure development.

The finalized policies in the OPPS and ASC final rule are effective January 1, 2024. Comments on the rule are due January 1, 2024.

CMS FINALIZES 3.1 PERCENT INCREASE IN OUTPATIENT AND ASC PAYMENT RATES

CMS finalizes an increase of 3.1 percent for OPPS payment rates in CY 2024, which is based on a market basket update of 3.3 percent reduced by a productivity adjustment of 0.2 percentage points.[1] The agency estimates this will result in a total of approximately $88.9 billion in payments to OPPS providers ($6.0 billion more than CY 2023). For CY 2024, CMS finalizes an OPPS conversion factor of $87.382 for hospitals that meet quality reporting requirements.

CMS finalizes an increase of 3.1 percent for ASC payment rates in CY 2024, which is consistent with CMS’s policy for CYs 2019 through 2023 to update the ASC payment system using the hospital market basket update.[2] CMS estimates this will result in a total of approximately $7.1 billion in payments to ASC suppliers ($207 million more than CY 2023). For CY 2024, CMS finalizes an ASC conversion factor of $53.514 for ASCs that meet quality reporting requirements.

CMS uses the most current cost report and claims data available (CY 2022) to calculate CY 2024 OPPS and ASC payment rates.

In addition, CMS will:

• continue the cancer hospital payment adjustment for CY 2024,
• keep outlier estimated payments at 1.0 percent of total OPPS payments for CY 2024,[3]
• continue the OPPS labor-related share as 60 percent of the national OPPS payment, and
• assign 229 dental service HCPCS codes to various clinical Ambulatory Payment Classifications in order to establish payment rates under the OPPS, consistent with dental payment policies finalized in the CY 2023 Physician Fee Schedule final rule.[4]

CMS ISSUES FINAL RULE WITH LUMP SUM PAYMENT REMEDY FOR 340B-ACQQUIRED DRUGS

On November 2, CMS also issued the final rule remedying the payment policy to hospitals for 340B-acquired drugs for CY 2018-2022, following the Supreme Court’s decision in American Hospital Association v. Becerra.[5] Previously, CMS finalized a policy in the CY 2018 OPPS/ASC final rule to reduce Medicare payment amounts for hospital outpatient drugs purchased under 340B Drug Pricing Program from ASP plus 6 percent to ASP-minus 22.5 percent.

In this rule, CMS finalizes that it will make a one-time lump-sum payment to each 340B-covered entity hospital that was paid less due to the now-invalidated policy for the remaining $9.0 billion owed to affected 340B providers for claims covering CYs 2018 through 2022. Approximately 1,700 340B covered entity hospitals were affected and will receive payments accordingly.

Beneficiary copayments make up approximately 20 percent of the payments affected 340B covered entity hospitals did not receive due to the now invalidated policy. Due to the lump-sum payment remedy, providers cannot bill beneficiaries for the cost sharing. To account for this, Medicare is accounting for beneficiary cost sharing within the one-time lump sum payment.

CMS maintains that they must implement these payments in a budget neutral manner because it is required by statute. CMS will reduce future non-drug item and service payments by adjusting the OPPS conversion factor by -0.5 percent starting in CY 2026. The proposed rule would have started the offsets beginning in CY 2025. In response to the proposed rule, many stakeholders pushed back against CMS’s decision to implement repayment to 340B hospitals in a budget neutral manner that impacts payment to all hospitals.[6] In response to comments, CMS reiterated that it believes statute requires budget neutrality adjustments, and even if they were not statutorily required, it is an appropriate exercise of the agency’s authority.

For CY 2024, CMS will continue to pay average sales price (ASP) plus 6 percent for 340B acquired drugs and biologicals, consistent with the policy finalized in CY 2023.

CMS CONTINUES RURAL SOLE COMMUNITY HOSPITAL SITE-NEUTRAL PAYMENT EXEMPTION POLICY

For CY 2024, CMS continues its policy to except off-campus provider-based departments (PBDs) of rural sole community hospitals (SCHs) from site neutral clinic visit payment reductions. This means that CMS will pay the full OPPS payment rate, rather than the physician fee schedule-equivalent rate when a clinic visit (described by HCPCS code G0463) is provided in a rural SCH excepted off-campus PBD.

CMS FINALIZES SEVERAL PRICE TRANSPARENCY CHANGES

Under federal law, hospitals operating in the United States must establish, update, and make a public list available of their standard charges for items and services they provide. CMS finalizes several price transparency requirements for CY 2024 to promote greater awareness about hospital service charges, promote agency enforcement capabilities, and reduce hospitals’ compliance burden through the provision of CMS form templates.

CMS finalized its proposal to require hospitals to publicly display required standard charges data in a CMS template. This template would include a CSV “tall” or “wide” format or JSON schema.

CMS also finalized its proposal to require hospitals to affirm the accuracy and completeness of standard charges included in a machine-readable file (MRF). This requirement will go into effect on July 1, 2024. However, beginning January 1, 2024, hospitals must “make a good faith effort to ensure that the standard charge information encoded in the MRF is true, accurate, and complete as of the date indicated in the MRF.”[7]In addition, CMS finalized its proposal to require hospitals to encode all standard charge information corresponding to a set of required data elements in the MRF and expand data elements that must be included in the MRF.  This information must conform to CMS template layout, data, and other specifications relevant to hospital standard charge information encoding.

Further, CMS finalized several changes to improve data accessibility by requiring hospitals to include in their webpages .txt files with standardized fields that correspond to MRF information and include a webpage link in the footer on the hospital website labeled “Price Transparency” that links directly to a webpage from which the MRF may be accessed.

CMS did not finalize its proposed 60-day enforcement grace period for hospitals to adopt the CMS template format and encode new data elements. The Agency will instead provide hospitals with more generous timelines, which can be found in Tables 151A and 151B of the unpublished rule (page 1462). The majority of compliance dates are July 1, 2024, with the Estimated Allowed Amount standard charge data element not being required until January 1, 2025.

CMS FINALIZES PAYMENT FOR INTENSIVE OUTPATIENT PROGRAMS TO PROMOTE HEALTH EQUITY AND CARE ACCESS

In this final rule, CMS establishes payment for Intensive Outpatient Programs (IOPs) in various care settings beginning CY 2024 to address gaps in behavioral health coverage, promote access to necessary care, and improve treatment outcomes for beneficiaries.

Scope of Benefits for IOP

As mandated by the Consolidated Appropriations Act, 2023[8]  (CAA 2023), CMS defines the scope of benefits for IOP services. IOPs are structured outpatient program for individuals with acute mental illness or substance use disorder, consisting of specific behavioral health services. These services are paid on a per diem basis under the OPPS or other applicable payment system when provided in hospital outpatient departments, Community Mental Health Centers (CMHCs), Federally Qualified Health Centers (FQHCs), and Rural Health Clinics (RHCs). CMS finalizes a list of service codes to be included in IOP that are paid for by Medicare either as part of the PHP benefit or under the OPPS. CMS also adds service codes related to care coordination, discharge planning, and the role of caregivers and peer support specialists in Partial Hospitalization Programs (PHPs) and IOPs.

Physician Certification and Plan of Treatment Requirements for the IOP

The CAA 2023 requires a physician to determine that each patient needs a minimum of nine hours of IOP services per week. This determination must occur at least every other month. CMS finalizes its proposal to codify this requirement in the regulations for IOP across all settings.

Payment Rates and Policy for Hospital Outpatient Departments and CMHCs

CMS finalizes its proposal to establish two IOP Ambulatory Payment Classifications (APCs) for each provider type based on the number of services per day. Payment rates for hospital-based and CMHC IOP services will be calculated using cost per day, utilizing a broader set of OPPS data that includes both PHP days and non-PHP days.

Federally Qualified Health Centers and Rural Health ClinicsCMS finalizes regulatory changes for RHCs and FQHCs to align with the scope of IOP benefits, certification requirements, and payment rules for IOP services outlined in the CAA 2023. Payment for RHCs will be based on the 3-services per day payment amount for hospital outpatient departments, while FQHCs will be paid the lesser of their actual charges or the 3-services per day payment amount for hospital outpatient departments. Grandfathered tribal FQHCs will receive payment based on the Medicare outpatient per visit rate as established by the Indian Health Service (IHS).

Opioid Treatment Program (OTP) Settings

CMS finalizes its proposal to extend IOP coverage to OTPs for the treatment of opioid use disorder. For IOP services provided by OTPs, a weekly payment adjustment will be applied via an add-on code, subject to certification, plan of care, and other applicable requirements. The payment adjustment will be updated annually based on the Medicare Economic Index and receive the Geographic Adjustment Factor.

Additionally, in response to public comments, CMS is finalizing a rate that is based on the payment rates being finalized for hospitals, RHCs, and FQHCs. CMS is not finalizing the proposal to deduct the payment rates for individual and group therapy services that are included in the existing OTP bundled payment.

CMS FINALIZES THE ASC COVERED PROCEDURES LIST FOR 2024

CMS allows surgical procedures that can be safely performed in the Ambulatory Surgical Center (ASC) setting for typical Medicare beneficiaries to be added to the ASC Covered Procedures List (CPL). In this final rule, CMS approves 26 dental surgical procedures to the ASC CPL as they are clinically similar to procedures on the list. CMS clarifies that statutory and regulatory limitations exist for Medicare coverage and payment of dental services. Further, CMS emphasizes that the addition of these dental procedures does not serve as a coverage determination for dental services performed under general anesthesia.

Additionally, CMS finalizes the addition of the HCPCS codes in Table 1, below, to the ASC CPL beginning in CY 2024.

Table 1.

HCPCS Code	Descriptor
C9734	Focused ultrasound ablation/therapeutic intervention, other than uterine leiomyomata, with magnetic resonance (MR) guidance
21194	Reconstruction of mandibular rami, horizontal, vertical, c, or l osteotomy; with bone graft (includes obtaining graft)
21195	Reconstruction of mandibular rami and/or body, sagittal split; without internal rigid fixation
23470	Arthroplasty, glenohumeral joint; hemiarthroplasty
23472	Arthroplasty, glenohumeral joint; total shoulder (glenoid and proximal humeral replacement (e.g., total shoulder))
27006	Tenotomy, abductors and/or extensor(s) of hip, open (separate procedure)
27702	Arthroplasty, ankle; with implant (total ankle)
29868	Arthroscopy, knee, surgical; meniscal transplantation (includes arthrotomy for meniscal insertion), medial or lateral
33289	Transcatheter implantation of wireless pulmonary artery pressure sensor for long-term hemodynamic monitoring, including deployment and calibration of the sensor, right heart catheterization, selective pulmonary catheterization, radiological supervision and interpretation, and pulmonary artery angiography, when performed
37192	Repositioning of intravascular vena cava filter, endovascular approach including vascular access, vessel selection, and radiological supervision and interpretation, intraprocedural roadmapping, and imaging guidance (ultrasound and fluoroscopy), when performed
60260	Thyroidectomy, removal of all remaining thyroid tissue following previous removal of a portion of thyroid

CMS FINALIZES QUALITY REPORTING PROGRAM CHANGES

To advance meaningful measurement and reporting for quality care, CMS finalizes changes to the Hospital Outpatient Quality Reporting Program (OQR), Ambulatory Surgical Center Quality Reporting (ASCQR), and Rural Emergency Hospital Quality Reporting (REHQR) Programs.

Hospital Outpatient Quality Reporting and Ambulatory Surgical Center Quality Reporting Programs

The Hospital Outpatient Quality Reporting (Hospital OQR) Program and Ambulatory Surgical Center Quality Reporting (ASCQR) Program are quality programs that require hospitals and ambulatory surgical centers (ASCs) to meet reporting requirements to maintain their annual payment updates. CMS finalizes several proposed modifications and additions to the measures within these programs. Additionally, CMS sought comments on quality measure topic areas of patient safety, sepsis, behavioral health (including mental health and suicide risk), and telehealth.

CMS finalizes its proposals to modify the following measures across the Hospital ORQ and ASCQR:

• COVID-19 Vaccination Coverage Among Healthcare Personnel (HCP) measure, modified to align with updated CDC National Healthcare Safety Network specifications.
  • Cataracts: Improvement in Patient’s Visual Function Within 90 Days Following Cataract Surgery, modified measure survey instrument requirements to standardize data collection and reduce facility burden.
  • Alignment of the Appropriate Follow-Up Interval for Normal Colonoscopy in Average Risk Patients measure, modified to align with updated clinical guidelines.

With modification, CMS finalizes its proposal to adopt a new measure, Risk-Standardized Patient-Reported Outcomes Following Elective Primary Total Hip and/or Total Knee Arthroplasty, to provide insight into the quality of care for common procedures. The modification extends the voluntary reporting period to three years, beginning with the CY 2025 reporting period followed by mandatory reporting beginning with the CY 2028 reporting period.

Citing stakeholder feedback that CMS reconsider what data is collected, CMS does not finalize its proposal to re-adopt the Hospital Outpatient /ASC Facility Volume Data on Selected Outpatient Surgical Procedures measures. CMS is reassessing how volume data is publicly displayed to ensure it is meaningful and relevant. CMS also does not finalize its proposal to remove the Left Without Being Seen measure, noting that left without being seen rates are worsening.

For the Hospital QRP, CMS finalizes the adoption of the Excessive Radiation Dose or Inadequate Image Quality for Diagnostic Computed Tomography (CT) in Adults electronic clinical quality measure (eCQM) to promote patient safety, with a modification to extend voluntary reporting to two years total prior to requiring mandatory reporting begin with the CY 2027 reporting period.

CMS responded to comments on quality measure topic areas of patient safety, sepsis, behavioral health (including mental health and suicide risk), and telehealth. Regarding patient safety, CMS acknowledged the “critical but complicated nature of AI technology”[9] and appreciated stakeholder feedback on the topic. Comments on safety quality measurement, outpatient behavioral quality health measurement, and telehealth quality measurement will be considered in future rulemaking.

Rural Emergency Hospital Quality Reporting (REHQR) Program

CMS finalizes the adoption and formalization of standard quality program reporting policies for the REH Quality Reporting (REHQR) Program, as well as the adoption of four initial measures. These measures consist of a combination of claims-based measures and chart-abstracted measures, including:

• Abdomen CT Use of Contrast Material,
• Median Time from Emergency Department (ED) Arrival to ED Departure for Discharged ED Patients,
• Facility 7 Day Risk Standardized Hospital Visit Rate after Outpatient Colonoscopy, and
• Risk-Standardized Hospital Visits Within Seven Days After Hospital Outpatient Surgery.

CMS also sought comment on the use of eCQMs, care coordination measures, and a tiered approach for quality measures and reporting requirements to incentivize reporting by Rural Emergency Hospitals (REHs). CMS will consider stakeholder feedback on these topics as it evaluates the REHQR Program.

CMS TO CONTINUE EXISTING PASS-THROUGH POLICIES FOR CERTAIN DRUGS, BIOLOGICALS, AND RADIOPHARMACEUTICALS

Under current law,[10] CMS provides temporary additional payments or “transitional pass-through payments” for certain drugs and biological agents. Under the statute, transitional pass-through payments can be made for at least 2 years but not more than 3 years.

CMS will continue existing pass-through payment policies for drugs, biologicals, and radiopharmaceuticals in CY 2024 for 42 drugs and biologicals which were approved for pass-through payment status with effective dates beginning between April 1, 2022, and April 1, 2023.[11]

CMS will also end pass-through payment status in CY 2024 for 25 drugs and biologicals which were initially approved for pass-through payment status between April 1, 2021, and January 1, 2022.[12]

CMS TO CONTINUE NON-OPIOID PAIN MANAGEMENT DRUG AND BIOLOGICAL POLICY AND PLANS FOR CY 2025-2027 PAYMENT POLICY

Under current law,[13] the Department of Health and Human Services (HHS) Secretary must review payments for opioids and evidence-based non-opioid alternatives for pain management (including drugs and devices, nerve blocks, surgical injections, and neuromodulation) with a goal of ensuring that there are not financial incentives to use opioids instead of non-opioid alternatives. In the CY 2022 OPPS/ASC final rule, CMS finalized its proposal that CMS would provide for separate payment for non-opioid pain management drugs and biologicals that function as supplies in the ASC setting when those products are approved by the Food and Drug Administration (FDA), have an FDA-approved indication for pain management or as an analgesic, and have a per-day cost above the OPPS drug packaging threshold, as determined by CMS.

Relying upon criteria finalized in the CY 2023 OPPS/ASC final rule, CMS reevaluated products that receive separate payment and determined that the following four products will continue to receive separate payment for CY 2024:

• Exparel (HCPCS C9290, Injection, bupivacaine liposome, 1 mg),
• Dextenza (HCPCS code J1096, Dexamethasone, lacrimal ophthalmic insert, 0.1 mg),
• Omidria (HCPCS code J1097, Phenylephrine 10.16 mg/ml and ketorolac 2.88 mg/ml ophthalmic irrigation solution, 1 ml), and
• Xaracoll (HCPCS code C9089, Bupivacaine, collagen-matrix implant, 1 mg).

In addition, in the proposed rule, CMS solicited public comments to inform on implementation of section 4135 (Access to Non-Opioid Treatments for Pain Relief) of the CAA 2023 which provides for temporary additional payments for non-opioid treatments for pain relief furnished on or after January 1, 2025, and before January 1, 2028, in the OPPS and ASC settings. CMS solicited input on any HOPD specific payment issues CMS should consider for CY 2025, any drug, biological, or medical device that should be included in this policy, and the approach for calculating the payment limitation for each treatment.

In the final rule, CMS indicated it received many comments regarding implementing the temporary payment provisions for non-opioid treatments in section 4135 of the Consolidated Appropriations Act, 2023 particularly comments suggesting drugs, biologicals, medical devices, and other modalities that could be utilized as non-opioid alternatives for pain management as well as the criteria CMS should use to evaluate these therapies. CMS clarified in their response that the current non-opioid payment policy outlined at § 416.174 is different from the policy contained within section 4135 of the CAA 2023. In addition, the agency noted it did not respond to all comments because it plans to make a proposal for the implementation of section 4135 and discuss the interaction of this proposal with their current policy (§ 416.174) in the CY 2025 OPPS/ASC proposed rule.

CMS ADDS NINE NEWLY CREATED SERVICES TO THE IPO LIST FOR 2024

The Inpatient Only (IPO) list identifies specific medical procedures, services, and surgeries that are typically only performed on a hospital inpatient basis. While CMS does not remove any procedures from the IPO list for CY 2024, CMS finalizes its proposal for nine newly created services to be added to the IPO list effective January 1, 2024. These new services are described by the CPT codes 0790T, 22836, 22837, 22838, 61889, 76984, 76987, 76988, and 76989 (described by placeholder codes X114T, 2X002, 2X003, 2X004, 619X1, 7X000, 7X001, 7X002, and 7X003, respectively, in the CY 2024 OPPS/ASC proposed rule). Upon clinical review, it was determined that these services require a hospital inpatient admission or stay and are not suitable for payment under the OPPS. Therefore, these services will be assigned to status indicator “C” (Inpatient Only) for CY 2024.

Further, CMS finalizes its proposal reassign CPT code 0646T from status indicator “E1” (not payable by Medicare) to status indicator “C” for CY 2024.

CMS FINALIZES RURAL EMERGENCY HOSPITAL PAYMENT POLICY FOR INDIAN HEALTH SERVICE FACILITIES AND TRIBAL FACILITIES

REHs are healthcare facilities that have been transformed from either a critical access hospital (CAH) or a rural hospital with fewer than 50 beds. These hospitals are not equipped to offer acute care inpatient services, apart from skilled nursing facility services provided in a separate unit. The establishment of REHs as a new category of healthcare provider was authorized by the Consolidated Appropriations Act (CAA), 2021,^[14] and implemented on January 1, 2023.

In response to concerns from Tribal and IHS hospitals regarding financial impacts associated with conversion to REHs, CMS finalizes its proposal to make payment for IHS and tribal hospitals that convert to REHs under the same All-Inclusive Rate (AIR) payment as IHS and tribal facilities that are not REHs. CMS also finalizes that IHS and tribal hospitals that convert to REH facilities would receive the REH monthly payment consistent with how payment is applied for non-tribal and non-IHS facilities. This approach is intended to increase the number of rural tribal and IHS hospitals obtaining an REH designation, thereby improving access to healthcare in these communities and promoting health equity.

CMS finalizes amendments to facilitate payment for off-campus provider-based departments of IHS and tribally-operated REHs. Further, CMS finalizes a definition to identify IHS or tribally-operated REHs based on their operation by the IHS or authorized tribal organizations.

CMS Will Consider Feedback on Enhanced Payment Approaches for IHS and Tribally Owned Facilities in Future Rulemaking

Due to the expansion of the range of services, including high-cost drugs and complex services, provided to communities served by IHS and tribally-owned facilities, the AIR may no longer adequately represent their costs. Therefore, CMS sought feedback on alternative payment approaches that can ensure equitable payment for these facilities’ high-cost drugs and services provided to Medicare beneficiaries. CMS will use comments to assist in the development of policies to pay for high-cost drugs and services outside of the IHS AIR in future rulemaking.

CMS Finalizes Technical Corrections to the Conditions of Participation for REHs

CMS finalizes corrections to some errors in the regulatory text defining the requirements for REH designation by updating the references to the specific sections of the Act.

CMS FINALIZES CHANGES TO COMMUNITY MENTAL HEALTH CENTERS CONDITIONS OF PARTICIPATION

The CAA 2023 expanded Medicare coverage for Intensive Outpatient Program (IOP) services provided by Community Mental Health Centers (CMHCs) starting January 1, 2024. This legislation allows CMHCs to offer both Partial Hospitalization Program (PHP) and IOP services. The CAA 2023 additionally introduced a new Medicare benefit category for Mental Health Counselor (MHC) services and Marriage and Family Therapist (MFT) services directly billed by MHCs and MFTs respectively.

To implement provisions of the CAA 2023, CMS modifies the requirements for the CMHC to include IOP services in the Conditions of Participation (CoP). CMS also revises the personnel qualifications for certain disciplines, specifically by updating the definition of mental health counselors and adding a definition for marriage and family therapists.

Currently, CMHCs are required to provide at least 40 percent of their services to individuals not eligible for Medicare Part B. Failure to meet this requirement can result in denial or revocation of Medicare enrollment. CMS collected feedback on how the addition of IOP services may impact the populations served by CMHCs and their ability to meet the 40 percent requirement. The agency will consider these comments for future rulemaking.

CMS CODIFIES PHYSICIAN CERTIFICATION REQUIREMENTS UNDER THE PARTIAL HOSPITALIZATION PROGRAM

As mandated by the CAA 2023, under the Partial Hospitalization Program (PHP), physicians must determine that each patient needs a minimum of 20 hours of PHP services per week at least on a monthly basis. After considering public feedback, CMS codified this requirement as an additional physician certification requirement for PHP services. Commenters agreed that the modification is consistent with the CAA 2023 requirement. Further, CMS modified the regulation to align with the CAA 2023 by requiring an initial recertification after 18 days and subsequent recertifications no less frequently than every 30 days.

CMS DOES NOT ADOPT POLICY FOR MAINTAINING ACCESS TO ESSENTIAL MEDICINES, WILL ADDRESS IN FUTURE RULEMAKING

In response to continued, pervasive drug shortages, CMS sought comment in the proposed rule on a potential payment adjustment under both the hospital Inpatient Prospective Payment System (IPPS) and OPPS to facilitate continued access to a buffer stock of essential medicines. These medicines refer to 86 specific medicines identified by the HHS Office of the Assistant Secretary for Preparedness and Response “as either critical for minimum patient care in acute settings or important for acute care or important for acute care of respiratory illnesses/conditions, with no comparable alternative available.”[15]^,[16] To mitigate these medicine shortages in the future, CMS sought feedback on the efficacy of this policy as well as potential improvements and alternatives that can be considered to further improve drug supply chain resiliency.

CMS will not be adopting a policy regarding payment under the IPPS or OPPS for establishing and maintaining access to essential medicines in this final rule. However, it will continue to seek feedback on this issue and will consider the comments received in future payment policy.

CMS CONSIDERS COMMENTS ON PACKAGING POLICIES FOR DIAGNOSTIC RADIOPHARMACEUTICALS FOR FUTURE RULEMAKING

Under the OPPS, CMS has implemented packaging policies for various types of drugs, biologicals, and radiopharmaceuticals, regardless of their cost. These packaged products are referred to as “policy-packaged” items. Diagnostic radiopharmaceuticals, including contrast agents and stress agents, fall under this category and are packaged based on their use in diagnostic tests or procedures.

CMS received numerous comments in response to its solicitation on issues related to the current payment policy for diagnostic radiopharmaceuticals under the OPPS and potential new approaches to payment for these products. Commenters described various clinical scenarios in which they believed CMS’s payment policies caused significant access issues. However, there was no consensus among commenters regarding the most effective way to reform the payment policy for diagnostic radiopharmaceuticals.

CMS agrees that this is a complex and important issue and will consider comments in future notice and comment rulemaking.

CMS APPROVES FOUR OUT OF SIX APPLICATIONS FOR DEVICE PASS-THROUGH PAYMENT

Transitional device pass-through payment allows beneficiaries to access innovative devices by allowing payment for these devices while necessary cost data is being collected to incorporate the devices into a procedure rate. A device is eligible for transitional pass-through payments for at least two years but no more than three years.

For CY 2024, six applications for device pass-through payment were submitted. The following table shows which four applications were approved, and the two that were denied.

Table 2.

Device	Status
CavaClear Inferior Vena Cava (IVC) Filter Removal Laser Sheath	Approved
CERAMENT® G	Approved
Ambu® aScopeTM 5 Broncho HD	Approved
Praxis Medical CytoCore	Denied
EchoTipâ	Denied
FLEX Vessel Prep™ System	Approved

Consistent with prior years, CMS set the pass-through payment percentage limit to 2.0 percent of the total projected OPPS payment for 2024. CMS estimates expenditures of $93.7 million for the first group of devices and $33.8 million for the second group of devices eligible for pass-through payment in CY 2024.

CMS SEEKS COMMENT ON NEW LEVEL II HCPCS CODES

Consistent with previous practice, CMS seeks comment on the new Level II HCPCS codes that will be effective January 1, 2024 allowing them to finalize status indicators and APC assignments for the codes in the CY 2025 OPPS/ASC final rule with comment period. This is because these codes are not available until November, so CMS is unable to include them in the OPPS/ASC proposed rules. These codes can be found in Addendum B to the CY 2024 OPPS/ASC final rule with comment period.

CMS SEEKS COMMENT ON BEHAVIORAL HEALTH TOPICS

CMS notes that many behavioral health services are delivered in multiple settings by multiple types of providers. CMS indicates that there are quality gaps in care coordination across settings, availability of services, and barriers to accessing services. Therefore, CMS seeks comment on behavioral health topics under consideration for measure development in the hospital outpatient setting, including “availability and access, coordination of care, patient experience, patient-centered clinical care, prevention and treatment of chronic conditions, prevention of iatrogenic harm (that is, harm resulting from medical care), equity across all domains, and suicide prevention.”[17]

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This Applied Policy® Summary was prepared by April Gutmann with support from the Applied Policy team of health policy experts. If you have any questions or need more information, please contact her at agutmann@appliedpolicy.com or at (202) 558-5272.

[1] Hospitals that fail to meet hospital outpatient quality reporting requirements will have a 2.0 percentage point reduction to their update factor.

[2] ASCs that fail to meet ASC quality reporting requirements will have a 2.0 percentage point reduction to their update factor.

[3] CMS finalizes an outlier fixed-dollar threshold of $7,750.

[4] See Table 111 on pages 853-858 of the unpublished rule for a list of these codes.

[5] 142 S. Ct. 1896 (2022).

[6] Except for new hospitals that enrolled in Medicare after January 1, 2018, as a new provider, which are excluded from the budget neutrality adjustments.

[7] See pg. 1388 of the unpublished rule.

[8] Pub. L. 117-328.

[9] See pg. 1137 of the unpublished rule.

[10] Section 1833(t)(6) of the Social Security Act.

[11] See Table 91 on pages 543-48 of the unpublished rule for a list of these drugs.

[12] See Table 90 on pages 539-41 of the unpublished rule for a list of these drugs.

[13] Section 1833(t)(22)(A) of the Social Security Act.

[14] Pub. L. 116–260

[15] https://www.armiusa.org/wp-content/uploads/2022/07/ARMI_Essential-Medicines_Supply-Chain-Report_508.pdf

[16] https://aspr.hhs.gov/newsroom/Pages/Essential-Medicines-May22.aspx

[17] See pg. 1138 of the unpublished rule and pg. 1141 for a list of specific questions included in the request for comment.