New CMS OPPS/ASC Rule Demands Effective Utilization Management and Case Management

On December 2nd, 2020, the Centers for Medicare & Medicaid Services (CMS) released its 2021 Outpatient Prospective Payment System (OPPS)/Ambulatory Surgical Center (ASC) Final Rule. Among the significant changes are:

  • The elimination of the inpatient only list over three calendar years beginning with the removal of an estimated 300 musculoskeletal-related charges. The list will be completely phased out by calendar year 2024. This decision was made based on CMS’ conclusion that changes in medical practices, coupled with new technologies and medical innovations, have made it no longer necessary to identify services that demand inpatient care.
  • An increase in the OPPS payment rates for hospitals that meet applicable quality reporting requirements by 2.4%.
  • An updated method for calculating the Overall Hospital Quality Star Rating based on data collected on hospital inpatient and outpatient measures that are publicly reported on a CMS website, as well as updating and simplification on how the ratings are calculated.
  • New prior authorization process relating to five different service categories (i.e., blepharoplasty, botulinum toxin injections panniculectomy, rhinoplasty and vein ablation). The new process requires hospitals to submit a prior authorization request for a provisional affirmation of coverage prior to submitting a covered outpatient service to the beneficiary and prior the claim’s submission for processing.
  • The introduction of a single process to address physician-owned hospitals’ exception processes relating to both the prohibition that POHs not increase the number of operating rooms, procedure rooms and beyond those licensed on March 23, 2010 when the “Affordable Care Act” was enacted, as well as the exception for POHs that qualified as “high Medicaid facilities.”
  • The removal of certain expansion limits for “high Medicaid facilities” consistent with CMS’ “Patients over Paperwork” initiative.

In addition to these changes, the CMS also decided not to advance its proposal to pay the Average Sales Price minus 28.7% for 340B-acquired drugs and instead opted to pay an ASP minus 22.5% for 340B-acquired drugs. This change was driven largely by CMS’ acknowledgment of the extensive litigation stemming from the lower payment amount.

What is clear from these and some of the other changes introduced by the new CMS OPPS/ASC rule is that healthcare providers will need to make extra certain that their utilization management and case management programs reflect the highest standards of quality both in terms of effective resource management and patient care and clinical outcomes.