Hello Roberta Buell,

Welcome to the Cavalcade of Final 2024 Regulations. Unfortunately, the news across the board is not that great, particularly for physician practices. In case you haven't heard, the 3+% reduction has stayed in the fee schedule. There is a fix being floated around in Washington. According to Inside Health Policy, more than 50 provider groups -- mostly specialists -- are pushing lawmakers to mitigate the entire 3.4% conversion factor cut laid out in the final 2024 Medicare physician fee schedule -- coming as the Senate Finance Committee prepares to take up a partial mitigation policy that the Congressional Budget Office estimates would cost $670 million over 10 years, as well as a partial extension of the alternative pay model bonus that CBO estimates would cost another $680 million. To me, the probability doesn't look great, but who knows? Any fix will most likely delay claims in January. We will see.

Hospitals got an increase for HOPPS, but will take a decrease starting in 2026 due to the payback of 340B additions during the period of 340B differential payments. That decrease will 0.5% over approximately 16 years---not exactly like the cut physicians are taking.

For both groups, there are lots of coding changes. The confusing add-on code, G2211, is coming back to disturb all of our sleep and slowly drive coders and providers nuts. And, if that wasn't confusing enough CMS once again changed split visits and added new SDoH-driven codes for PIN, CHI, and assessing Social Determinants of Healthcare. TMI!!! But, as we have for the last many years, we've got you--we will be doing an absolutely free and open to the public webinar on December 5 at 1 PM EST, 11 AM CST, and 10 AM PST.

And, if you have not signed for our fabulous e-book, The People's Guide to Buy and Bill--why? It is an annual subscription which can be enjoyed by everyone in your practice, clinic, or company for less than $1000 per YEAR! Start your New Year off right.

Best,

Da' Mistress

Last week, the Centers for Medicare & Medicaid Services (CMS) issued the Calendar Year (CY) 2024 Physician Fee Schedule (PFS) and Quality Payment Program (QPP) FINAL regulations. Most of these rules will go into effect for dates of service January 1, 2024 and thereafter for the duration of the calendar year.

The rates included in PFS often serve as the basis of many private payers' reimbursements. Fortunately, some payers only use the RVUs, not the conversion factor. The Rule also includes updates to the Merit-based Incentive Payment System (MIPS) and the Quality Payment Program.

TOP TAKEAWAYS FROM THE PFS FINAL RULE

• Conversion Factor-- CMS finalized a 2024 CF of $32.7442, representing a 3.37% reduction from the 2023 physician CF of $33.8872, and a 2024 anesthesia CF of $20.4349, representing a 3.27% reduction from the 2023 anesthesia CF of $21.1249. This is a huge bummer and nothing can change this EXCEPT an end of year "fix". As you know, these fixes will delay payment in the beginning of 2024, if one happens at all. See the first article for more 'details'.
• The GPCI Floor--In some areas, CMS has plugged in a 1.00 Work RVU to bolster payment in certain locations. This has been in place for many years. It was extended to December 31, 2023. And, then, it could be gone. This will negatively impact some of you, so check and see if there is a 1.00 Work RVU in your area for 2023 and compare to 2024.
• Specialty Impact--The specialty impact below estimate does not factor in the full 3.37% reduction in the CF or the GPCI issue. So, when you crunch the 2024 numbers, there may be a decrease that could be drastically different from this: 
• Cardiology 1%
• Dermatology -1%
• Gastro 0%
• Hem-Onc +2%
• Neuro +1%
• Rad Onc -2%
• It's Baaack (and iit s still confusing)--G2211--. CMS finalized add-on code G2211 in the 2021 PFS final rule, but it had significant budget implications, since the CMS estimated it would be billed in a high percentage of all office visit claims. So, this was not considered to be good for the Federal Budget. In December 2020, Congress passed the Consolidated Appropriations Act of 2021, which delayed G2211 until 2024. But, now CMS is bringing it back with some clarifications. CMS clarified in the final rule that this code is meant to be used for visits associated with longitudinal, non-procedural care where the clinician has an ongoing relationship with a patient. CMS believes that for these services, the intensity of the professional work when dealing with a complex patient is not appropriately captured within the current valuation of O/O E/M services and that the add-on code is necessary to ensure that these services are valued accurately. CMS further stated that this code should be used when furnishing O/O E/M visits associated with medical care services that serve as the continuing focal point for all needed healthcare services and/or with medical care services that are part of ongoing care related to a patient’s single, serious condition or a complex condition. CMS reiterated that this add-on cannot occur with procedural visits associated with Modifier 25.
• Split/Shared Visits--CMS proposed to not make time the only documentation criteria for split visits in 2024 as originally planned. Instead, they originally proposed to maintain the current definition of the “substantive portion” of an E/M service performed by both a physician and a non-physician practitioner in a facility setting through 2024. BUT, CMS did not go with their proposal. Instead, they decided to better align with CPT® 2024. CMS ultimately decided to create a seemingly more permanent policy. CMS adopted the CPT guidelines for CY 2024, meaning that the definition of “substantive portion” will be more than half of the total time spent by the physician and NPP performing the split/shared visit, or a substantive part of the MDM as defined by CPT. Now, is everyone out there totally confused??
• Behavioral Health--The final rule provides Medicare Part B coverage and payment for the services of marriage and family therapists (MFTs) and mental health counselors (MHCs). CMS finalized its proposal to allow addiction counselors that meet all the applicable requirements to be an MHC to enroll in Medicare as MHCs. The final rule also establishes, as required by the CAA, 2023, new HCPCS codes under the PFS for psychotherapy for crisis services, and allows the Health Behavior Assessment and Intervention services described by CPT codes 96156, 96158, 96159, 96164, 96165, 96167 and 96168, and any successor codes, to be billed by clinical social workers, MFTs and MHCs, in addition to clinical psychologists.
• Telehealth--As you may know, the CAA extended many telehealth services until the end of 2024. CMS ifinalizes several updates to the Medicare Telehealth Services List for 2024. In addition the 2024 proposal contains several other provisions for telehealth.
• The new code for Social Determinants of Health Risk Assessments (G0136) will be added to the list on a permanent basis.
• Medicare will continue covering audio-only services for services on the Medicare Telehealth Service List.
• CMS finalized that, beginning in 2024, telehealth services furnished to people in their homes be paid at the non-facility PFS rate, thereby protecting access to telehealth services by aligning with the telehealth-related flexibilities that were extended via the Consolidated Appropriations Act of 2023. As you may know, the POS for the patient being at home is 10.
• In a move that we should all love, CMS will continue to define “direct supervision” that means that the supervising practitioner can continue to be present and available through real-time audio and video interactive telecommunications through December 31, 2024. CMS stated that they may, at some point, make this permanent for services that are always "incident to". Keep your fingers crossed!
• Teaching physicians have been supervising Residents virtually since the beginning of the Pandemic . But, that was supposed to expire 12/31/2023. In the proposal, CMS states that they will continue to allow teaching physicians to have a virtual presence during the key portion of the Medicare telehealth service for which payment is sought, through audio/video real-time communications technology, for all residency training locations through December 31, 2024. This will only hold true for 3-way communications in teaching settings.
• CMS proposes to collapse Category 1 and 2 telehealth services into one permanent level. And, proposes to call Category 3 "provisional".
• CMS also will lift frequency limits on 99231-99233 among other services until 12/31/2024.
• Providers providing services from home will NOT have to register their home address with PECOS.
• RPM/RTM: CMS noted that it has received many questions regarding billing scenarios and the appropriate reporting of codes. To broadly share clarifications with stakeholders, and in response to comments submitted following the proposed rule, CMS discussed the following issues in the final rule:
• CMS confirmed the requirement that RPM services only be furnished to established (as opposed to new) patients now that the PHE has ended.
• CMS acknowledged that while it has remained silent on this topic, it believes that RTM should only be furnished to patients after a treatment plan is established, which would occur following “an initial interaction with the patient.”
• Now that the COVID-19 PHE is concluded, the 16-day data collection requirement (as opposed to the two-day data collection requirement) is reinstated, although it does not apply to the RPM or RTM treatment management codes as erroneously stated in the proposed rule. We were hoping that this was an error!!
• CMS confirmed that RPM or RTM may be separately reimbursable during the global period where the billing provider is not the provider that is receiving the payment for the global procedure.
• Caregiver Support--After considering the public comments, CMS is finalizing a revised definition of caregiver to be “an adult family member or other individual who has a significant relationship with, and who provides a broad range of assistance to, an individual with a chronic or other health condition, disability, or functional limitation” and “a family member, friend, or neighbor who provides unpaid assistance to a person with a chronic illness or disabling condition”.To bill for CTS, practitioners should select the appropriate group code (CPT code 96202, 96203, or 97552) if more than one caregiver is trained at the same time, or individual code (CPT code 97550, 97551) if one individual caregiver is trained. If caregivers are trained in a group, practitioners would not bill individually for each caregiver. More than one caregiver trained at the same time must be billed under the group code, as the treating practitioner’s time and effort should not be counted multiple times.
• Advancing Health Equity--To maximize Health Equity, CMS has proposed new coding and payment for several services to help underserved populations. Some of these duplicate the Care Management coding spectrum and may cause even more confusion. I'm having trouble thinking about which ones to bill when.
• The agency will begin to allow separate coding and payment for community health integration services (G0019 & G0022), which would include person-centered planning, health system coordination, promoting patient self-advocacy, and allowing access to community-based resources to address unmet social needs that interfere with the clinician's diagnosis and treatment plan for the patient. Called "CHI", this code set is for 60 minutes per calendar month with an add-on code for an additional 30 minutes. Other caveats to CHI include:
• Must have an initiating O/O visit or Annual Wellness Visit or TCM.
• For offices, this is an ‘incident to’ service under ‘general’ supervision.
• Need for these services must be documented and part of the treatment plan.
• Consent must be documented.
• There are no frequency limits on these as yet.
• Personnel performing this should be trained and be authorized to perform under State Law
• Another new payment is for Principal Illness Navigation ("PIN") services to help patients navigate their main treatment in the complicated healthcare world. By the way, cancer was specifically mentioned in use of this code. This code set is (G0023-G0024). The other thing that is mentioned is that this can be, but this is clinical, not financial, navigation. This can be billed with other Care Management codes as this is considered to be a complementary code to Principal Care Management. In addition, there is patient cost sharing. Other guidelines include:
• This is for a disease that is supposed to last 3 months or more.
• This is not necessarily related to SDoH.
• Cannot be initiated for ED or inpatient.
• “Incident to” under General Supervision.
• Must have an initiating visit once per year.
• Personnel must be trained or certified and are qualified under State Law.
• Consent verbal or written is required.
• Only one HCP can bill per condition per month
• The Final Rule also includes coding and payment for Social Determinants of Health Risk Assessments, (G0136) which could be furnished as an add-on to an annual wellness visit (with no cost sharing) or in conjunction with an E/M visit. This assessment must be achieved with an evidenced-based assessment tool. More guidelines include:
• Must be a standardized test--possible evidence-based tools include the CMS Accountable Health Communities (AHC) 24 tool, the Protocol for Responding to & Assessing Patients’ Assets, Risks & Experiences (PRAPARE) 25 tool, and instruments identified for Medicare Advantage Special Needs Population Health Risk Assessment.
• Cannot be billed more than every six months.
• Code with Z-codes if SDOH are found.
• Follow up referrals are expected.
• Can be associated with E/M, AWV, TCM.
• Drugs and Biologicals Rules Under the IRA Codified--This proposal which formalizes a lot of things that were in The Inflation Reduction Act contains several provisions that affect payment allowables or beneficiary out-of-pocket costs for certain drugs payable under Part B. In this proposed rule, CMS addresses the following
• Section 11403 makes changes to the payment limit for certain biosimilars when they are new and this is way wacky, people. So, the payment limit for the biosimilar is the lesser of (1) an amount not to exceed 103 percent of the WAC of the biosimilar or the Medicare Part B drug payment methodology in effect on November 1, 2003 (!!!), or (2) 106 percent of the lesser of the WAC or ASP of the reference biological, or in the case of a selected drug during a price applicability period, 106 percent of the maximum fair price ) of the reference biological. This goes into effect on July 1, 2024.
• Section 11101 requires that beneficiary coinsurance for a Part B rebatable drug is to be based on the inflation-adjusted payment amount if the Medicare payment amount for a calendar quarter exceeds the inflation-adjusted payment amount, We have already seen how this works.
• Section 11407 provides that for IV insulin furnished through an item of DME on or after July 1, 2023, the deductible is waived and coinsurance is limited to $35 for a month’s supply of insulin furnished through a covered item of DME.
• More Part B Drug Proposals--Here is more drug news from the Medicare proposal.
• Drugs and Biologicals which are Not Usually Self-Administered by the Patient, and Complex Drug Administration Coding:CMS is soliciting comments regarding policies on the exclusion of coverage for certain drugs under Part B that are usually self-administered by the patient. In addition, they are seeking comment on coding and payment policies for drug administration in complex non-chemotherapeutic drugs, Specialties outside of Hem-Onc are not thrilled that their drugs are not considered "complex". And, no one is thrilled with drug admin payment. CMS did not decide anything definitive about this.
• Rules requiring Manufacturers of Certain Single-Dose Container or Single-Use Package Drugs to Provide Refunds with Respect to Discarded Amounts. This has been implemented as of July 3, 2023. But, there are proposals that include:
• Timelines for the initial and subsequent discarded drug refund reports to manufacturers are finalized in this rule.
• The method of calculating refunds for discarded amounts from lagged claims data, .
• The method of calculating refunds when there are multiple manufacturers for a refundable drug, For generics in a single HCPCS code, it will be a weighted average of all NDCs for single dose containers. This information will come from the reporting manufacturers' quarterly ASP. Report
• Higher percentages will be calculated for certain drugs with unique circumstances such as teeny tiny dosing. Many of these are ophthalmology, but low volume orphan drugs are included.
• An application process by which manufacturers may request an increased applicable percentage for a drug with unique circumstances.
• CMS provides a modification to the JW and JZ modifier policy for drugs payable under Part B from single-dose containers given through DME that are furnished by a supplier who does not administer the drug. They only report -JZ.
• Payment for Dental Services Prior to Certain Cancer Treatments--CMS is helping cancer patients everywhere as payments can be made in 2024 for selected dental services (no crowns or implants) prior to and during several different cancer treatments, including:
• Chemotherapy
• CAR-Ts
• Bone modifiers (e.g. biphosphonates)
• Treatments related to Head & Neck cancer
• Vaccines--In June 2021, CMS announced an additional payment for in-home COVID-19 vaccine administration, which was established on a preliminary basis during the PHE. Based on data that show that this payment has helped improve healthcare access to vaccines for underserved Medicare populations, CMS will maintain this additional payment for the administration of a COVID-19 vaccine in the home. CMS is also proposing to extend this in-home additional payment to the administration of the other three preventive vaccines included in the Part B preventive vaccine benefit — the pneumococcal, influenza, and hepatitis B vaccines — when provided in the home.
• Under this proposal, effective January 1, 2024, the payment amount for administration of all four vaccines would be identical, That is, Medicare Part B will pay the same additional payment amount to providers and suppliers that administer a pneumococcal, influenza, hepatitis B, or COVID-19 vaccine in the home.
• This additional payment amount (proposed at $38.51) will be annually updated using the percentage increase in the Medicare Economic Index and adjusted to reflect geographic cost variations.
• CMS will limit the additional payment to one payment per home visit, even if multiple vaccines are administered during the same home visit. Every vaccine dose that is furnished during a home visit will still receive its own unique vaccine administration payment.
• The AUC Program--This silly thing has been on the books for many years. Now, CMS is saying they do not know HOW they would process these claims without upsetting the entire payment system. CMS now wants to pause efforts to implement the Appropriate Use Criteria (AUC) program for reevaluation and to rescind the current AUC program regulations at 42 CFR 414.94. CMS will continue efforts to identify a workable implementation approach and will propose to adopt any such approach through subsequent rule-making. Uh huh.
• Electronic Prescribing for Controlled Substances (EPCS)--This will be monitored in 2024 with Warning letters as it has been in 2023. The biggest thing here is that practices and clinics with in-house pharmacies that are part of the same entity are now subject to the 70% rule for electronic prescribing. This was once waived
• The Quality Payment Program Proposals for 2024--Here are some of the major proposals for the Quality Payment Program next year:
• Merit-Based Incentive Payment System (MIPS) Performance Threshold: CMS proposed to increase the MIPS performance threshold from 75 to 82 points under all three MIPS reporting options: traditional MIPS, MIPS Value Pathways (MVPs), and Alternative Payment Model Performance Pathways (APPs). In the end, CMS will keep the points at 75.
• Components of MIPS: These will remain the same in 2024: 30% Quality; 30% Cost, 15% Improvement Activities; and 25% Promoting Interoperability.
• MVPs: In an effort to expand the MVP option for more specialties, CMS is issuing more MVPs for 2024:
• Women's Health
• Infectious Disease Including HIV and Hepatitis C
• Mental Health and Substance Abuse Disorder
• Quality Care for Ear, Nose, and Throat
• Rehab Support for Musculoskeletal Disease
• Consolidation of Promoting Wellness and Managing Chronic Conditions (a change)
• Quality: Data completeness is 75%% for 2024 and 2025 performance periods. will go to 80% in 2026.
• Cost: There will be five new episode-based measures with a 20 case minimum and one removal:
• Depression
• Emergency Medicine
• Cardiac Failure
• Low Back Pain (which I am getting from writing this)
• Psychoses and related Conditions
• Simple Pneumonia with Hospitalization will be removed.
• Improvement Activities: CMS proposes to add 5 new activities; modify one activity; and, remove 3 activities.
• Promoting Interoperability: The biggest thing proposed for 2024 is that the performance period will go from 90 to 180 days.
• APMs--In accordance with the Consolidated Appropriations Act of 2023, the Alternative Payment Model (APM) Incentive Payment for Reporting Year 2023 is 3.5% (from 5%). After the 2023 performance year/2025 payment year, the APM Incentive Payment will end. Beginning with the 2024 performance year/2026 payment year, qualifying participants (QPs) will receive a higher Medicare PFS update (“qualifying APM conversion factor”) of 0.75% compared to non-QPs, who will receive a 0.25% Medicare PFS update, which will result in a higher PFS payment rate for eligible clinicians who are QPs. APM QPs will continue to be excluded from MIPS reporting and payment adjustments for the year. Other rules include:
• Qualifying APM Participants: CMS proposed to make QP determinations at the individual eligible clinician-level only and no longer the APM Entity-level. They decided not to do this for 2024.
• Medicare APM Thresholds. Under current statute, the QP threshold percentages will increase beginning with the 2024 performance year/2026 payment year as follows:
• ​Medicare Payments:QP threshold increasing from 50% to 75%; Partial QP threshold increasing from 40% to 50%
• Medicare Patients: QP threshold increasing from 35% to 50%; Partial QP threshold increasing from 25% to 35%.

This rule is voluminous. If you treat diabetes, substance abuse, behavioral issues, FQHCs, etc.or PT/OT patients, please review the rule or the fact sheet for more information. We could not include everything here.

And, don't forget to sign up for our webinar on December 5 at 1 PM EST, 11 AM CST, 10 AM PST.

The Centers for Medicare & Medicaid Services (CMS) recently posted its calendar year (CY) 2024 FINAL Rule for Hospital Outpatients ("OPPS")). Like the Physician Rule, most of the contents of the rule go into effect for dates of service in Calendar Year 2024.

Unlike for physician services (!!), for CY 2024, CMS increased payment rates under the Hospital Outpatient Prospective Payment System (OPPS) and the ASC Payment System by a productivity-adjusted market basket factor of 3.1%. Hospitals and ASCs that fail to meet their respective quality reporting program requirements will be subject to a 2% reduction in the CY 2024 fee schedule increase factor.

Based on the finalized policies, CMS estimates that total payments to OPPS and ASC providers (factoring in beneficiary cost-sharing and estimated changes in enrollment, utilization and case-mix) for CY 2024 will be approximately $88.9 billion and $7.1 billion, respectively. This represents an increase of approximately $6 billion and $207 million, respectively, from CY 2023 program payments.

Key takeaways from the CY 2024 OPPS System Proposed Rule:

• Drug Payment--Medicare will continue to pay hospitals ASP plus 6%. The packaging amount for drugs in 2024 is proposed to be $140. In the end, CMS backed off this policy and will stay at a $135 threshold. CMS is proposing “to exempt biosimilars from the OPPS threshold packaging policy when their reference biologicals are separately paid, meaning we would pay separately for these biosimilars even if their per-day cost is below the threshold packaging policy.” However, they are not finalizing that all the biosimilars related to the reference product would be similarly packaged if a reference product’s per-day cost falls below the threshold packaging policy. 
• 340B Modifiers--CMS will use only a single modifier to identify separately payable drugs and biologicals acquired under the 340B program. Currently, 340B hospitals report the “JG” or “TB” modifiers to identify drugs and biologicals acquired through the 340B program. CMS (author of the meaningless modifier -JZ) states that “utilizing a single modifier will allow for greater simplicity,” while also continuing to identify and exclude 340B-acquired drugs and biologicals for the purpose of Part B inflation rebate liability. CMS outlined that all 340B covered entity hospitals paid under the OPPS would report the “TB” modifier effective January 1, 2025.
• Potential Buffer Stock of Essential Medications: To cushion the impact of drug shortages, CMS proposed to provide an additional payment as part of the inpatient prospective payment system to support the creation of a buffer supply of medications. Nothing will be implemented in 2024 regarding this proposal.
• Bundling of Radiopharmaceutical--Interested parties have long complained about the bundling of diagnostic Radiopharmaceuticals. Finally, it seems the Agency is listening. CMS has previously heard from interested parties regarding alternative payment methodologies for payment. Five alternatives were mentioned in the 2024 proposal--none of which were implemented:
• Paying separately for diagnostic Radiopharmaceuticals with per-day costs above the OPPS drug packaging threshold of $140
• Establishing a specific per-day cost threshold that may be greater or less than the OPPS drug packaging threshold
• Restructuring APCs, including by adding nuclear medicine APCs for services that utilize high-cost diagnostic Radiopharmaceuticals
• Creating specific payment policies for diagnostic Radiopharmaceuticals used in clinical trials
• Adopting codes that incorporate the disease state being diagnosed or a diagnostic indication of a particular class of diagnostic Radiopharmaceuticals
• Transparency-- CMS continues to broaden enforcement of the hospital price transparency requirements by requiring hospitals to use a template to submit charge information and by publishing this on their web site.
• For CY 2024, CMS will require hospitals to display standard charge information using a machine-readable file template similar to those it made available for voluntary use. CMS proposes to require hospitals to link to this information from their website homepage.
• CMS also outlined additions and modifications to its enforcement regulations, including requiring an authorized hospital official to certify the accuracy and completeness of hospital price transparency data requiring hospitals to acknowledge receipt of warning notices; allowing CMS to notify a health system’s leadership of noncompliance by one of its hospitals; and allowing CMS to publicize information related to CMS’s assessment of a hospital’s compliance and actions/remedies taken.
• In this rule, CMS requests information on how best to coordinate hospital price transparency requirements with Transparency in Coverage and No Surprises Act requirements.
• Behavioral Health--CMS outlines plans to implement the Intensive Outpatient Program ("IOP")benefit. The CAA of 2023, established Medicare coverage for intensive outpatient services beginning in CY 2024. Intensive outpatient services are furnished under IOPs, which are distinct outpatient programs of psychiatric services provided for individuals who have an acute mental illness, including conditions such as depression, schizophrenia and substance use disorders.
• In the Final Rule, CMS outlines the payment and program requirements for the new IOP benefit.
• The rule includes the scope of benefits, physician certification requirements, coding and billing and payment rates under the IOP benefit.
• CMS IOP services may be furnished in hospital outpatient departments, community mental health centers, federally qualified health centers and rural health clinics.
• Revisions to the Inpatient Only List--For CY 2024, CMS will remove no procedures from the IPO list. CMS proposes to add nine services that were newly defined by the American Medical Association CPT Editorial Panel for CY 2024 to the IPO list.
• Dental Services--In 2023, CMS began to allow payment for dental services that are inextricably linked to, and substantially related and integral to, the clinical success of other covered medical services. This policy change allows payment for certain dental services performed in outpatient settings when OPPS coverage and payment conditions are met. CMS decided to finalize its proposal to add those 229 dental codes to clinical APCs and to include an additional 14 dental codes identified by commenters. FR Table 111 identifies the 243 dental codes assigned to clinical APCs for 2024.
• C-APCs--For CY 2024, CMS finalized a proposal to create two new C-APCs:
• Splitting the existing Level 2 Intraocular C-APC 5492 into Level 2 and Level 3 Intraocular C-APC 5493, which requires renaming the previously existing Levels 3, 4 and 5 Intraocular APCs (5493, 5494, 5495) to Levels 4, 5 and 6, respectively (APCs 5494, 5495, 5496)
• Creating C-APC 5342 for Level 2 Abdominal/Peritoneal/Biliary and Related Procedures to improve the clinical and resource homogeneity in the Level 1 Abdominal/Peritoneal/Biliary and Related Procedures APC (5341)

To read the entire rule, click here. To read the press release, click here. And, do not forget about our free and open to everyone webinar on December 5!!

The Department of Health and Human Services has published their Final Rule to address reduced payments for Part B drugs for 340B hospital outpatients from 2018 to September 2022. Just like the proposal, this is a standalone rule that simply addresses the 340B payback.

On June 15, 2022, the Supreme Court unanimously held that the HHS failed to follow the requirements of the Medicare Statute for changing reimbursement methodology for drug acquisitions for hospitals that participate in the 340B discount drug program. Because HHS failed to follow the Statute’s requirements, the Court ordered that HHS must fund underpayments stemming from the 22.5% drug reimbursement cut for 340B providers. This occurred from January 2018 through September 2022 and the shortfall must be reimbursed to 340B providers by HHS.

HHS projected that the reimbursement cut to 340B providers from January 2018 to September 2022 was approximately $10.5 billion. HHS estimates that the reimbursement methodology change put in place by HHS starting September 27, 2022 has corrected $1.5 billion of that amount. Many of the 2022 claims have been re-processed. Thus, HHS has prepared lump sum payments to 340B providers totaling approximately $9 billion. Despite the fact that hospitals would like this, no interest will be applied to these payments.

The final rule updates the Addendum AAA with hospital-specific payment amounts and accounts for all payment activity that has occurred since the proposed rule was issued. An affected 340B covered entity hospital can alert CMS to potential errors in the calculation of its lump sum payment amount in Addendum AAA by emailing CMS at outpatientpps340b@cms.hhs.gov no later than 11:59 PM EST on November 30, 2023. Submissions must include the following:

• A description of the nature of the error
• A designated contact person for the purposes of addressing the error Relevant supporting documentation, such as claim numbers, total units, payment amount received and date of payment.

Rather than subject Medicare beneficiaries to additional cost-sharing obligations associated with the previously dispensed 340B drugs, CMS incorporated the value of these cost-sharing amounts into the $9 billion lump sum. According to CMS, this should make 340B hospitals whole for the amount they lost from January 1, 2018, through September 27, 2022. CMS estimates that $1.8 billion of the total $9 billion is funding 340B hospitals is directly from lost collection of cost sharing from beneficiaries for these 340B-acquired drugs. As a result, CMS prohibits covered entity 340B hospitals from collecting any additional beneficiary cost sharing on drugs subject to the prior payment cuts.

A $9 Billion windfall may seem like a winning lottery ticket for 340B hospitals. But, we all know that what CMS giveth; they also taketh away in the name of budget neutrality. Way back in FY 2018, HHS increased OPPS payments to all hospitals for NON-DRUG items and services by 3.19% when the cuts to drug acquisition costs for 340B hospitals were enacted. In the proposed rule, HHS estimates that acute care hospitals received an estimated $7.8 billion in additional spending on the aforementioned non-drug items and services for Medicare beneficiaries.

For these (sort of) bonus payments, HHS is proposing a 0.5% reduction in the OPPS fee schedule for non-drug items and services for all hospitals (340B and non-340B) for each year until the $9 Billion in lump sum payments to 340B hospitals is fully repaid. HHS estimates the 0.5% reduction will take place for the next 16 fiscal years from 2026 to 2041--it was supposed to start in 2025, but CMS cut hospitals a small break in the Final Rule.

Medicare Advantage Plans are not factored into the payback.

To read the Fact Sheet, click here.

This newsletter is a brief interpretation of information. It may be subject to typos, misinterpretation, and misapplication. This company and its parent assume no liability for the content herein. Moreover, this is not consultative or legal advice. Billing of claims and payment thereof is individual to payers and circumstance. Providers should check with each payer prior to billing. This information is time-sensitive and may change at any time. Please ensure that you constantly check for new information.