2022 Hospital Outpatient Payment Proposal Focuses on Implementing the Radiation Oncology Model, 340B, Price Transparency

July 19, 2021

The Centers for Medicare & Medicaid Services (CMS) released its 2022 Hospital Outpatient Prospective Payment System (OPPS) proposed rule. Specific provisions that would impact the cancer care community include:

Updates to OPPS Payment Rates

CMS is proposing to increase OPPS payment rates for hospitals that meet applicable quality reporting requirements by 2.3%. This update is based on the projected hospital market basket increase of 2.5%, reduced by 0.2 of a percentage point for the productivity adjustment.

Due to the COVID-19 Public Health Emergency (PHE), CMS believes that 2020 OPPS reporting data are not the best overall approximation of expected outpatient hospital services in 2022. Therefore, CMS is proposing to use 2019 data to set 2022 OPPS and ambulatory surgical center (ASC) payment system rates.

Payment for 340B Drugs

Beginning January 1, 2018, Medicare cut reimbursement for certain separately payable drugs or biologicals acquired through the 340B Drug Pricing Program to Average Sales Price (ASP) minus 22.5%.

CMS is proposing to maintain those cuts, while continuing to keep rural, sole community hospitals, children’s hospitals, and PPS-exempt cancer hospitals excepted from this policy.

Radiation Oncology Model

In September 2020, the Center for Medicare and Medicaid Innovation (CMMI) published a final rule that established the Radiation Oncology (RO) Model with a start date of January 1, 2021. The COVID-19 PHE lead to a delayed the start of the model until July 1, 2021, which was further delayed until January 1, 2022 due to a provision in the Consolidated Appropriations Act of 2021.

The proposed rule details both the RO Model’s timing and design. Provisions include but are not limited to: a January 1, 2022 start date, a 5-year model performance period, a lowering of the discounts to 3.5% for the professional component (PC) and 4.5% for the technical component (TC), a revision of the cancer inclusion criteria, and the adoption of an extreme and uncontrollable circumstances policy.

Price Transparency

After hearing concerns from consumers that hospitals are not making pricing information available online, CMS proposes to increase the penalty for some hospitals that do not comply with the Hospital Price Transparency final rule. CMS is proposing to set a minimum civil monetary penalty of $300/day that would apply to smaller hospitals with a bed count of 30 or fewer and apply a penalty of $10/bed/day for hospitals with a bed count greater than 30, not to exceed a maximum daily dollar amount of $5,500. Under this approach, for a full calendar year of noncompliance, the minimum total penalty would be $109,500 per hospital, and the maximum total penalty amount would be $2,007,500 per hospital.

CMS also clarified that online price estimator tools must provide individuals with a cost estimate that takes their insurance information into account, and that the estimate must reflect the amount the hospital anticipates the individual will pay for shoppable services.

Inpatient Only (IPO) List

The Inpatient Only (IPO) list defines the list of services that, due to their medical complexity, Medicare will only pay for when performed in the inpatient setting. In the 2021 OPPS final rule, CMS finalized a policy to eliminate the IPO list over a three-year period. However, many stakeholders—including the Association for Clinical Oncology (ASCO)—expressed concerns related to patient safety. Therefore, for 2022, CMS is proposing to halt the elimination of the IPO list and to add the services removed from the IPO list in 2021 back to the IPO list beginning in 2022.

CMS is soliciting comment on whether CMS should maintain the longer-term objective of eliminating or maintaining the IPO list, while continuing to systematically scale the list back so that inpatient only designations are consistent with current standards of practice.

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