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CMS Issues OPPS/ASC Payment System Final Rule and Physician Fee Schedule Final Rule 

By Paul L. Croce, John W. Kaveney & James A. Robertson on November 11, 2022
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On November 1, 2022, the Centers for Medicare & Medicaid Services (CMS) issued two important final rules: one that included updates and policy changes for Medicare payments under the Physician Fee Schedule (PFS) and aspects of Medicare Part B, and the other that finalized Medicare payment rates for hospital outpatient and ambulatory surgical center (ASC) services.

Hospital Outpatient Prospective Payment System (OPPS) and ASC Payment System Final Rule

CMS has indicated that in addition to setting payment rates, the final rule is intended to “align with several key goals of the Administration, including addressing the health equity gap, fighting the COVID-19 Public Health Emergency (PHE), encouraging transparency in the health system and promoting safe, effective, and patient-centered care.”

Although not fully inclusive, the following is a brief summary of some significant items addressed in the final rule:

  • Rate Increases – CMS has implemented a 3.8% increase to Medicare hospital OPPS rates for hospitals that meet applicable quality reporting requirements. This is a significant increase from the 2.7% increase included in the proposed rule.
  • 340B Program – CMS has established reimbursement for drugs and biologicals acquired through the 340B program at the average sale price plus 6%. This decision is consistent with the Supreme Court’s recent decision in American Hospital Association v. Becerra. CMS did not address the remedy for 340B drug payments for the years 2018-2022, which were the focus of the Becerra decision, but indicated it will do so in future rulemaking prior to the CY 2024 OPPS/ASC proposed rule.
  • Rural Emergency Hospitals – CMS has established a new provider type known as the Rural Emergency Hospital (REH). Qualifying critical access hospitals and small rural hospitals will be able to convert to REHs and Medicare payments beginning January 1, 2023. REHs will be eligible for additional facility payments in the amount of $272,866 monthly.
  • Exemption to Site-Neutral Clinic Visit Cuts – In 2019, CMS instituted a policy to pay for hospital outpatient clinic services furnished at grandfathered off-campus provider-based departments at a rate of 40% of the OPPS. For 2023, CMS has exempted rural small community hospitals from its earlier policy of site-neutral clinic visit cuts. For these facilities, CMS will pay the full OPPS payment rate.
  • Telehealth Services – During the COVID-19 PHE, CMS allowed hospitals to provide and bill for remote telehealth behavioral health services. The new rule allows these remote services to continue to be provided beyond the expiration of the PHE. In a change from the proposed rule, CMS will allow these remote services to be provided without the physician’s physical presence in the hospital. CMS will also allow these services to be provided by way of audio-only communications. The rule provides additional requirements for intermittent in-person services. However, those requirements can be waived if the patient and physician agree, and document in the chart, that the risks of in-person services outweigh its benefits, and the patient has a regular source of general medical care.

CMS has published a Fact Sheet on its website providing additional details regarding the above items and many of the other changes found in the Medicare Hospital OPPS and ASC Final Rule.

Physician Fee Schedule Final Rule

CMS has identified the goal of its 2023 PFS final rule as reflecting “a broader Administration-wide strategy to create a more equitable health care system that results in better accessibility, quality, affordability, and innovation.”

While the final rule covers an expansive list of topics, the following is a list of some highlights:

  • CY 2023 Conversion Factor – With the expiration of the 3% supplemental increase to PFS payments for CY 2022, and the budget neutrality requirements for Medicare spending, the CY 2023 PFS conversion factor will be $33.06, a decrease of $1.55 from the CY 2022 PFS conversion factor of $34.61.
  • Evaluation and Management (E/M) Visits – CMS adopted most of the AMA CPT Editorial Panel changes to E/M visit codes and guidelines, effective January 1, 2023, which are intended to reduce administrative burden.
  • Split (or Shared) E/M Visits – CMS finalized its policy for addressing how to bill for a shared visit by defining the “substantive portion” of the service as more than half of the total time dedicated to one or more of the following elements: (1) history; (2) performing a physical exam; (3) medical decision making; (4) spending time (more than half of the total time). This choice will be permitted until CY 2024.
  • Telehealth Services – CMS has extended the temporarily available telehealth services permitted because of the PHE at least through CY 2023, in order to allow additional time for the collection of data. Several other updates were also implemented for telehealth services for CY2023.
  • Behavioral Health Services – A new exception was added to the direct supervision requirement for “incident to” allowing behavioral health services to be provided under general supervision of a physician or non-physician practitioner when such services are provided by auxiliary personnel.

CMS has published a Fact Sheet on its website providing additional details regarding the above items and many of the other changes found in the Medicare PFS Final Rule.

Photo of Paul L. Croce Paul L. Croce

Counsel, Healthcare

Paul is a healthcare attorney and litigator with focused expertise in hospital reimbursement and guardianship matters. He represents hospitals and healthcare systems before the Department of Health and the Division of Medical Assistance and Health Services in Medicaid and Medicare appeals…

Counsel, Healthcare

Paul is a healthcare attorney and litigator with focused expertise in hospital reimbursement and guardianship matters. He represents hospitals and healthcare systems before the Department of Health and the Division of Medical Assistance and Health Services in Medicaid and Medicare appeals, Disproportionate Share Hospital (DSH) subsidy appeals, Graduate Medical Education (GME) subsidy appeals, and other legal challenges.

Paul represents nursing homes, assisted living facilities and other long-term care providers in guardianship applications seeking the appointment of permanent or temporary guardians to make necessary decisions for residents who lack capacity and appropriate surrogate decision-makers.

As a healthcare litigator, Paul has experience with Fifth Amendment Takings cases, matters involving nursing home discharges, and the defense of breach of contract and tortious interference claims. His work also includes the defense of attorneys and other licensed professionals against claims of malpractice and ethics grievances. He provides counsel on issues related to contracting, civil litigation and professional licensing matters, representing a variety of healthcare industry clients including physicians, dentists, hospitals and for-profit and nonprofit healthcare systems.

Results may vary depending on your particular facts and legal circumstances.

Contact information:

pcroce@greenbaumlaw.com | 973.577.1806 | vCard | LinkedIn

For more information visit the Greenbaum, Rowe, Smith & Davis LLP website.

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Photo of John W. Kaveney John W. Kaveney

Partner, Healthcare and Litigation

John provides legal guidance to healthcare sector clients on a broad variety of topics, including Medicare/Medicaid reimbursement issues, corporate compliance, data privacy and cybersecurity concerns, healthcare provider licensure and medical staffing concerns, involuntary commitment laws, and general healthcare regulatory…

Partner, Healthcare and Litigation

John provides legal guidance to healthcare sector clients on a broad variety of topics, including Medicare/Medicaid reimbursement issues, corporate compliance, data privacy and cybersecurity concerns, healthcare provider licensure and medical staffing concerns, involuntary commitment laws, and general healthcare regulatory support. He represents a diverse roster of healthcare entities, including for-profit and nonprofit hospitals and health systems, academic medical centers, individual physicians and physician groups, ambulatory surgery centers, ancillary service providers, medical billing companies, skilled nursing and rehabilitation facilities, behavioral health centers and pharmacies.

John advises on Medicaid reimbursement matters before the New Jersey Division of Medical Assistance and Health Services (DMAHS), which administers the state’s Medicaid programs, and handles Medicare reimbursement disputes, both in New Jersey and in numerous other states, before the federal Provider Reimbursement Review Board (PRRB).

In the area of corporate compliance, John supports clients on matters including the implementation of new, and the assessment and improvement of existing, compliance programs. He assists healthcare clients in navigating compliance audits, internal investigations, and governmental investigations related to compliance issues, including potential violations of the federal Stark Law, Anti-Kickback Statute (AKS), and Civil Monetary Penalties law (CMP). He further provides general guidance concerning compliance and regulatory matters under state and federal healthcare laws.

On issues related to information privacy and cybersecurity at the intersection of healthcare law, John assists providers with issues arising under the Health Insurance Portability and Accountability Act (HIPAA) and the Health Information Technology for Economic and Clinical Health Act (HITECH). This includes the implementation and assessment of privacy and security policies and procedures to ensure the proper protection and utilization of protected health information (PHI) both by healthcare providers and the business associates with which they contract. In addition, he represents healthcare clients in investigating, reporting, and remediating information breaches and the liability such breaches create under various information privacy and security laws.

John also counsels healthcare providers with professional licensure issues and advises hospitals and health systems regarding their medical staff bylaws and corresponding policies and procedures, as well as assisting with internal investigations of medical staff members and the corresponding disciplinary process. He further provides legal guidance related to New Jersey’s involuntary commitment laws, and provides representation in civil litigation.

John serves as Editor-In-Chief of Healthcare Perspectives, Greenbaum’s blog covering issues of interest to the healthcare industry.

Results may vary depending on your particular facts and legal circumstances.

Contact information:

jkaveney@greenbaumlaw.com | 973.577.1796 | vCard | LinkedIn

For more information visit the Greenbaum, Rowe, Smith & Davis LLP website.

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Photo of James A. Robertson James A. Robertson

Partner and Practice Leader, Healthcare

Jim serves as trusted counsel to the entire healthcare sector. His practice spans the full spectrum of legal, regulatory, and corporate challenges facing healthcare entities.

With a deep technical command of reimbursement and payer strategy, Jim regularly represents…

Partner and Practice Leader, Healthcare

Jim serves as trusted counsel to the entire healthcare sector. His practice spans the full spectrum of legal, regulatory, and corporate challenges facing healthcare entities.

With a deep technical command of reimbursement and payer strategy, Jim regularly represents hospital systems and providers in high-stakes Medicare, Medicaid, and charity care subsidy matters. He possesses particular expertise in navigating disproportionate share hospital (DSH) and graduate medical education (GME) issues before state agencies and the federal Provider Reimbursement Review Board (PRRB). Jim further ensures the long-term sustainability of provider-payer relationships by negotiating complex Medicare Advantage and Managed Medicaid risk-sharing arrangements.

In the transactional arena, Jim provides comprehensive representation for mergers, acquisitions, joint ventures, and divestitures. He serves a diverse array of industry leaders, including for-profit and nonprofit hospital systems, academic medical centers, pharmaceutical companies, integrated delivery networks (IDNs), physician practices, and healthcare private equity funds. Jim is instrumental in the structural development of Clinically Integrated Networks (CINs), Accountable Care Organizations (ACOs), and Multiple Employer Welfare Arrangements (MEWAs), frequently securing necessary certifications from the New Jersey Department of Banking and Insurance (DOBI). His work encompasses the establishment and sale of individual and group practices, ambulatory surgery centers, nursing homes, and assisted living facilities, as well as the negotiation of executive contracts, recruitment initiatives, medical directorships, hospital department management, and office or equipment leases.

To mitigate operational risk, Jim guides clients through the development of robust corporate compliance programs and manages internal audits, government inquiries, and voluntary self-disclosures. His counsel ensures that provider arrangements satisfy the Stark Law, the federal Anti-Kickback Statute (AKS), and New Jersey’s Codey Law. He assists clients in seeking advisory opinions, obtaining Certificates of Need, and securing transaction approvals from the New Jersey Department of Health and the Attorney General under the Community Healthcare Asset Protection Act (CHAPA). His counsel ensures compliance with the Corporate Practice of Medicine (CPOM) doctrine and federal mandates including HIPAA, HITECH, the ACA, and Emergency Medical Treatment and Labor Act (EMTALA)—from drafting Business Associate Agreements (BAAs) to managing medical record retention and the physical or electronic storage of medical records.

Jim’s advocacy extends to medical staff matters, where he designs state-of-the-art bylaws and provides guidance on fair hearing requirements and strategic initiatives. Finally, he represents healthcare entities in business-critical litigation, including provider-payor disputes, restrictive covenant matters, and medical staff privileging hearings. By combining this granular knowledge of reimbursement and regulatory compliance with a veteran litigator’s perspective, Jim provides the strategic foresight necessary to navigate the administrative and operational hurdles of the modern healthcare landscape.

Results may vary depending on your particular facts and legal circumstances.

Contact information:

jrobertson@greenbaumlaw.com | 973.577.1784 | vCard | LinkedIn

For more information visit the Greenbaum, Rowe, Smith & Davis LLP website.

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  • Posted in:
    Health Care and Life Sciences
  • Blog:
    Healthcare Perspectives
  • Organization:
    Greenbaum, Rowe, Smith & Davis LLP
  • Article: View Original Source

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