On July 10, the Centers for Medicare & Medicaid Services (CMS) released the Calendar Year (CY) 2025 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) proposed rule (CY 2025 OPPS/ASC Proposed Rule), which contains proposals to update OPPS and ASC payment rates by 2.6 percent in addition to proposals that address health disparities, expand access to behavioral health care, advance maternal health care, and promote safe, effective, and patient-centered care.
Key Takeaways
- CMS is required annually to propose updating the payment policies and rates for services furnished to Medicare beneficiaries in hospital outpatient departments (HOPDs) and ASCs. The proposals included in the CY 2025 OPPS/ASC Proposed Rule align with several key healthcare goals of the Biden Administration.
- Health systems, providers and other stakeholders may be interested in submitting comments on the CY 2025 OPPS/ASC Proposed Rule. The comment period will last 60 days, ending on September 9, 2024. Stakeholders can submit comments on Regulations.gov here.
The CY 2025 OPPS/ASC Proposed Rule includes the following proposals:
- Updates to OPPS and ASC payment rates: CMS proposes updating OPPS payment rates for hospitals that meet applicable quality reporting requirements by 2.6 percent. This update is based on the proposed Inpatient Prospective Payment System (IPPS) market basket percentage increase of 3.0 percent, reduced by 0.4 percentage point for the productivity adjustment. CMS also proposes an update factor to the ASC rates for CY 2025 of 2.6 percent.
- Intensive Outpatient Program (IOP): CMS proposes updating Medicare payment rates for IOP services furnished in HOPDs and other healthcare facilities. The IOP is a distinct and organized outpatient program of psychiatric services provided for individuals who have an acute mental illness or substance use disorder. In the CY 2024 OPPS final rule, CMS established payment and program requirements for the IOP benefit furnished by a hospital to its outpatients, or by a Community Mental Health Center (CMHC), a Federally Qualified Health Center (FQHC), or a Rural Health Clinic (RHC). CMS' finalized payment methodology for that year consisted of two payment rates, a 3- and a 4- or more services per day, for IOP services for hospitals and CMHCs.
In CY 2025, CMS proposes to maintain the existing rate structure, with two IOP Ambulatory Payment Classifications (APCs) for each provider type: one for days with three services per day and one for days with four or more services per day. For the CY 2025 rate setting, CMS is proposing to use the CY 2023 claims data and the latest available cost information from cost reports beginning three fiscal years prior to the year that is the subject of the rulemaking.
- Medicaid and Children's Health Insurance Program (CHIP) Eligibility: CMS proposes to revise Medicaid and CHIP regulations to codify the requirement within the Consolidated Appropriations Act (CAA), 2023 to require States to provide 12 months of continuous eligibility to children under the age of 19 in Medicaid and CHIP, with limited exceptions. CMS also proposes to remove the option to provide continuous eligibility to a subgroup of Medicaid and CHIP enrollees and for a time period of less than 12 months. For CHIP, CMS proposes to remove the option to disenroll children from CHIP during a continuous eligibility period for failure to pay premiums.
- Maternal Health and Obstetrical Services: CMS proposes new Conditions of Participation (CoPs) for hospitals and critical access hospitals (CAHs) for obstetrical services that include new requirements for maternal quality assessment and performance improvement; maternal health data reporting; baseline standards for the organization, staffing, and delivery of care within obstetrical units; and staff training on evidence-based best practices on an annual basis. CMS proposes revising the emergency services CoP related to emergency readiness for hospitals and CAHs that provide emergency services by requiring them to have adequate provisions and protocols to meet the emergency needs of patients and to train applicable staff on these protocols and provisions annually. In addition, CMS proposes revisions to the Discharge Planning CoP for all hospitals and CAHs related to transfer protocols by requiring hospitals to have written policies and procedures for transferring patients under its care, which would be inclusive of hospital inpatients (e.g., transfer from one unit to another in the same hospital). CMS also requests public comments on whether these proposed requirements should also apply to rural emergency hospitals (REHs).
- Health Equity and Quality Reporting Programs: CMS proposes new
quality measures focused on health equity and social drivers of
health (SDOH). Specifically, CMS proposes a number of cross-program
proposed requirements in the Hospital Outpatient Quality Reporting
(OQR), Rural Emergency Hospital Quality Reporting (REHQR), and
Ambulatory Surgical Center Quality Reporting (ASCQR) Programs,
among other program-specific provisions. To this end, it proposes
the following proposed cross-program measures:
- (1) Adopt the Hospital Commitment to Health Equity (HCHE) measure in the Hospital OQR and REHQR Programs and the Facility Commitment to Health Equity (FCHE) measure in the ASCQR Program beginning with the CY 2025 reporting period/CY 2027 payment or program determination;
- (2) Adopt the Screening for SDOH measure in all three reporting programs beginning with voluntary reporting for the CY 2025 reporting period followed by mandatory reporting beginning with the CY 2026 reporting period/CY 2028 payment or program determination;
- (3) Adopt the Screen Positive Rate for SDOH measure in all three reporting programs beginning with voluntary reporting for the CY 2025 reporting period followed by mandatory reporting beginning with the CY 2026 reporting period/CY 2028 payment or program determination; and
- (4) Modify the Immediate Measure Removal policy for adopted Hospital OQR and ASCQR Program measures beginning with CY 2025.
- Prior Authorization: CMS proposes changing the current review timeframe for prior authorization requests for OPD services from 10-business days to 7-calendar days for standard reviews. This proposal aligns with the CMS Interoperability and Prior Authorization Final Rule (see our client alert here), which established timeframes for certain payers to send prior authorization decisions.
Conclusion
In addition to the CY 2025 OPPS/ASC Proposed Rule, CMS has released its proposed regulations to update payment and policies relevant to providers, including the Fiscal Year (FY) 2025 IPPS proposed rule and CY 2025 Physician Fee Schedule proposed rule. CMS states that the CY 2025 OPPS/ASC Proposed Rule will be finalized in November 2024.
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