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CMS Issues CY 2024 OPPS Proposed Rule

The Medicare Outpatient Prospective Payment System (OPPS) proposed rule for calendar year (CY) 2024 addresses Part B payment to hospitals in the 340B Drug Pricing program, revises site-neutral payment policies, updates price transparency requirements, and makes changes to outpatient quality reporting, among other provisions. The policies in the rule, if finalized, would start Jan. 1, 2024.

Payment Update

The Centers for Medicare & Medicaid Services (CMS) would increase base payment rates under the OPPS by 2.8 percent for CY 2024, representing a market basket increase of 3 percent, less a productivity adjustment of 0.2 percentage points. The agency would reduce payment rates by an additional 2 percentage points for hospitals that fail to meet Hospital Outpatient Quality Reporting Program (OQR) requirements.

Part B Drug Payment to 340B Hospitals

For a second straight year, in response to a unanimous June 2022 Supreme Court decision invalidating CMS’ 2018 and 2019 Part B reimbursement cuts to 340B hospitals, CMS plans to continue the full Part B reimbursement rate for 340B hospitals.

From 2018 to 2022, CMS had reduced Part B reimbursement for separately payable drugs purchased through the 340B program to 77.5 percent of average sales price (ASP), instead of the statutory default payment rate of 106 percent. CMS proposes to pay 340B hospitals in 2024 at 106 percent of ASP, which is the same rate that non-340B hospitals are paid under the OPPS. CMS is proposing that for purposes of implementing provisions of the Inflation Reduction Act, 340B hospitals continue to identify 340B drugs using a claims-based modifier. Beginning in 2025, hospitals would use one modifier (“TB”) to report all 340B drugs instead of the two currently used modifiers (“JG” and “TB”).

In a separate rule CMS issued July 7, the agency proposed a remedy for cuts from 2018 to 2022 and solicited public comments on the remedy.

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 provider-based departments (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 50 percent in 2018 and 40 percent since 2019.

However, CMS notes that under the PFS, intensive cardiac rehabilitation (ICR) services are currently paid at 100 percent of the OPPS rate, and therefore it incorrectly reduced payment for these services through the OPPS under its implementation of Section 603. Accordingly, CMS proposes to pay for ICR services provided in non-excepted, off-campus PBDs at 100 percent of the OPPS rate, so that payment for these services would be equivalent, whether provided in a physician office or PBD.

Price Transparency

CMS proposes to revise existing requirements for hospitals to publicly disclose their standard charges, including adding new data elements that must be included in the hospital’s machine-readable file (MRF) of standard charges, such as discounted cash prices and payer-specific negotiated charges. The agency also proposes to require hospitals to conform their MRF to a new CMS template layout and that hospitals include a text file and link on their website to help automated access to the MRF.

Outpatient Quality Reporting Program

CMS proposed several changes to the quality measurement and reporting requirements in the Hospital OQR Program that aim to improve quality of care measurement and reporting for hospital outpatient services. The proposed measure changes are:

  • Removing Left Without Being Seen (LWBS) measure beginning with CY 2024 reporting period.
  • Modifying three previously adopted measures beginning with CY 2024 reporting: COVID-19 Vaccination Coverage Among HCP; Cataracts measure; and Colonoscopy Follow-up Interval measure.
  • Re-adopting surgical volume measure with modifications, beginning with voluntary CY 2025 reporting and mandatory CY 2026 reporting.
  • Adopting two new measures: THA/TKA Patient-Reported Outcome measure and CT Radiation Dose measure, phased in with voluntary then mandatory reporting periods.

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 inpatient-only (IPO) list for procedures that should be removed because they can be provided in the outpatient setting. For 2024, CMS proposes to add nine new services with newly created current procedural terminology (CPT) codes to the IPO list. CMS also proposes to reassign one existing CPT code from non-payable to inpatient-only status. After clinical review, CMS determined these services require inpatient admission and are not appropriate for OPPS payment. No procedures are proposed for removal from the IPO list for 2024. Interested parties are encouraged to request future reviews of codes to be removed from the IPO list.

Comprehensive Ambulatory Payment Classifications

In 2015, CMS began packaging payment for individual items and services paid for under the OPPS into comprehensive ambulatory payment classifications (C-APCs). CMS pays one prospective payment amount for all services on a claim related to the primary, device-dependent service associated with the C-APC. The C-APC payment amount is based on the cost of the primary, device-dependent service and all adjunctive services that support the primary service, such as laboratory tests or supplies. CMS proposes to add two new C-APCs in CY 2024: C-APC 5342 for level 2 Abdominal/Peritoneal/Biliary and Related Procedures and C-APC 5496 for Level 6 Intraocular Procedures, bringing the total number of C-APCs to 72.

Intensive Outpatient Program

CMS proposes to establish the Intensive Outpatient Program (IOP), a new coverage type created by the Consolidated Appropriations Act, 2023, for individuals needing intensive therapy services. The rule outlines the scope of benefits, physician certification requirements, payment rates, and coding and billing for IOP services. IOPs are outpatient programs of psychiatric services for patients who have an acute mental illness or substance use disorder that would be paid on a per diem basis. IOP services could be provided in hospital outpatient departments, community mental health centers, federally qualified health centers, and rural health clinics.

Potential Payment for Maintaining a Buffer Stock of Essential Medicines

CMS seeks comment on providing separate payment through the Inpatient Prospective Payment System to cover the costs of maintaining a buffer stock of essential medicines that are subject to shortages. Under such a policy, CMS says it could start paying hospitals as soon as cost reporting periods beginning on Jan. 1, 2024, for the costs of maintaining a three-month stock of essential medications. The policy would apply to a list of 86 essential medicines identified in a Department of Health and Human Services report and would cover the resource costs of establishing and maintaining a buffer supply. Payment would be in addition to the reimbursement hospitals receive for the costs of the medicines themselves and could be paid as biweekly interim lump-sum payments that would be reconciled at cost report settlement. CMS says it is also considering separate payment under the OPPS for maintaining a buffer stock of essential medicines.

America’s Essential Hospitals is analyzing the proposed rule for comment and will send members a detailed Action Update in the coming days. CMS is accepting comments on the proposed rule until Sept. 11.

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.

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