Skip to Main Content
Don't have an account? Create Account
Don't have an account? Create Account

CMS Finalizes Continued Outpatient Cuts, Higher Transparency Penalties

The Medicare Outpatient Prospective Payment System (OPPS) final rule for calendar year (CY) 2022 continues payment cuts to hospitals in the 340B Drug Pricing Program and cuts to off-campus provider-based departments (PBDs). The rule also pauses elimination of the inpatient-only (IPO) list and increases penalties for hospitals failing to report standard charges.

In a statement, America’s Essential Hospitals strongly objected to the continuation of outpatient payment cuts but applauded the administration for its proposal to halt elimination of the IPO list. The policies in the rule take effect Jan. 1, 2022.

Payment Update

The Centers for Medicare & Medicaid Services (CMS) will increase base payment rates under the OPPS by 2 percent for CY 2022, representing a market basket increase of 2.7 percent, less a productivity adjustment of 0.7 percentage points. The agency will reduce payment rates by an additional 2 percentage points for hospitals that fail to meet Hospital Outpatient Quality Reporting Program requirements.

To avoid payment rates being skewed by data collected during the COVID-19 public health emergency, CMS finalized its proposal to use CY 2019 claims data and cost reports, instead of CY 2020 data, in setting outpatient payment rates for CY 2022.

340B Reimbursement Cuts

For a fifth year, CMS will continue its Medicare Part B reimbursement cuts for separately payable drugs purchased through the 340B program. Since 2018, CMS has reimbursed 340B hospitals at 77.5 percent for most separately payable Part B drugs instead of the statutory default payment rate of 106 percent of ASP. CMS finalized its proposal to continue reimbursing 340B hospitals at 77.5 percent for these separately payable Part B drugs in 2022.

America’s Essential Hospitals continues to challenge the lawfulness of CMS’ payment cuts, a policy that the U.S. Supreme Court will review later this year.

Site-Neutral Payment Cuts

Under Section 603 of the Bipartisan Budget Act of 2015 (BBA), Congress instructed CMS to pay certain non-excepted, off-campus PBDs under a payment system other than the OPPS. CMS determined these facilities should be paid under the Medicare Physician Fee Schedule (PFS) at a percentage of the OPPS payment rate (set at 40 percent since 2019). CMS does not address the payment rate or other policies for non-excepted, off-campus PBDs in the CY 2022 OPPS or PFS final rules, indicating the agency will continue to pay these PBDs at 40 percent of the OPPS payment rate.

In CY 2019, CMS began a policy of paying for outpatient office visits (health care common procedure coding system code G0463) at excepted, off-campus PBDs at 40 percent of the OPPS payment rate. CMS will continue these cuts for CY 2022 and beyond.

Price Transparency

In the rule, CMS amends several previously finalized hospital price transparency policies, including increasing the amount of the penalties for noncompliance through use of a sliding scale based on hospital bed count. Hospitals will incur a per day per hospital penalty ranging from $300 to $5,500. The increased penalties are effective Jan. 1, 2022.

The agency also finalized actions to prohibit conduct the agency interprets as a barrier to accessing standard charge information. Additionally, CMS clarifies the information it expects from hospital online price estimator tools.

Procedures Paid Only as Inpatient Services

CMS maintains a list of procedures usually performed only in the inpatient setting, reimbursed at inpatient rates, and not paid for under the OPPS. Each year, CMS reviews this IPO list for procedures that should be removed because they can be provided in the outpatient setting. CMS previously finalized a proposal to eliminate the remaining 1,740 services on the IPO list over a three-year period.

In response to stakeholder concerns, CMS will halt elimination of the IPO list and add back most of the 298 services removed in CY 2021, except for three CPT codes and their corresponding anesthesia codes, which will remain payable in the inpatient setting only.

Rural Emergency Hospitals

In the proposed rule, CMS sought comments on payment policies, quality measures, and health and safety standards for rural emergency hospitals, a new provider type established by the Consolidated Appropriations Act of 2021. CMS did not address comments on its request for information and will likely address rural emergency hospital payment policies in future rulemaking.

Health Equity

In the proposed rule, CMS sought information from stakeholders about ways to address health equity through improved data collection to better measure and analyze disparities across its programs and the potential use of confidential reporting of measures stratified by dual eligibility. In the upcoming year, CMS intends to begin confidential reporting for several measures stratified by dual eligibility status, if technically feasible, adequately representative, and statistically reliable. The agency also plans to expand its confidential reports to hospitals in the future to include reporting of measures stratified by race and ethnicity.

The agency will continue to engage with stakeholders on ways to address equity across its programs and incorporate feedback into future policy development.

America’s Essential Hospitals is analyzing the final rule and will send members a detailed Action Update in the coming days.

Contact Senior Director of Policy Erin O’Malley at or 202.585.0127 with questions.


About the Author

Shahid Zaman is a senior policy analyst at America's Essential Hospitals.

Previous Next
Test Caption
Test Description goes like this