The Centers for Medicare & Medicaid Services (CMS) finalized Medicare payment rates on November 2, 2023. Payment rates affect the calendar year (CY) 2024 outpatient prospective payment system (OPPS) and ambulatory surgical center (ASC) services and became effective on January 1, 2024.
OPPS Payment for Drugs Acquired Through 340B Program
CMS is finalizing the proposal without modification to continue 340B payments for acquired drugs and biologicals at the statutory default rate, which is the average sale price (ASP) plus 6%.
CMS also issued a separate final rule on November 2, 2023, to discuss payment for 340B drugs for CY 2018–2022.
Some providers are receiving more than $5 million in the settlement. Actual payments can be found by provider on the CMS website.
Other Key Impacts
Below is an overview of key impacts.
- OPPS and ASC payment rates
- Intensive outpatient programs
- Partial hospitalization programs
- OPPS payment for remote mental health services
- OPPS and ASC payment for dental services
- Hospital price transparency
- Rural emergency hospitals (REH) and Indian Health Services (IHS) and Tribal facility payments
- Comments sought on buffer stock of essential medicines
- Comments sought on services outside of HIS all-inclusive rate (AIR)
- OPPS transitional pass-through payment for devices
- Comments sought on packaging policy for diagnostic radiopharmaceuticals
OPPS and ASC Payment Rates
Payment rates for OPPS hospitals and ASCs will increase by 3.1% when quality reporting requirements have been met. The rate is driven by the 3.3% increase in the hospital market basket rate with a 0.2% reduction from the productivity adjustment. The final rule payment rate is higher than the proposed rule rate of 2.8%.
The productivity-adjusted hospital market basket update for the ASC payment rate was introduced in the CY 2019 OPPS ASC final rule for an interim period CY 2019–2023.
Following the interim period, CMS had planned to assess changes in performance with cases moving from the hospital setting to the ASC setting. Due to the impact of the COVID-19 public health emergency (PHE) on hospital utilization and elective surgeries, CMS is extending the interim period an additional two years to gather more claims data.
Intensive Outpatient Program
The CY 2024 OPPS ASC final rule includes extending coverage of services for patients that require care between traditional outpatient therapy and hospitalization or partial hospitalization through payment of the intensive outpatient program (IOP) services under Medicare.
The final rule provides IOP specifications to help organizations:
- Finalize a list of services to be included in the scope of benefits for IOP
- Establish physician certification and plan of treatment requirements
- Determine ambulatory payment classifications (APC) based on services per day
- Apply regulations to rural health clinic (RHC) and federally qualified health center (FQHC) services and payment
- Extend IOP coverage to opioid treatment programs (OTP)
Partial Hospitalization Program (PHP)
The final rule includes updates to the Medicare rates for partial hospitalization program services in hospital outpatient departments and community mental health centers (CMHC). The rate structure is extended to include two PHP ambulatory payment classifications (APC) for each provider type: one for three times a day and one for four. These payment rates are based on cost per day data using the OPPS dataset with both PHP and non-PHP data—an update from existing methodology that only used PHP data.
Payment rates are increasing for higher intensity days in all settings.
OPPS Payment for Remote Mental Health Services
The final rule includes technical changes, including a new untimed code, for remote mental health services.
OPPS and ASC Payment for Dental Services
To align with the CY 2023 physician fee schedule final rule that assigned dental payments to clinical APCs, CMS has finalized Medicare payment rates to over 240 dental codes.
Hospital Price Transparency
To improve price transparency, CMS is finalizing standard charge display requirements and enforcement provisions outlined in the CFR. See the fact sheet for hospital transparency on the CMS website.
Rural Emergency Hospitals (REH) and Payment of IHS and Tribal Facilities
CMS finalized regulations for rural emergency hospital (REH) provider type. A critical access hospital or rural hospital with no more than 50 beds is eligible to convert to an REH, if it has participated in Medicare as of the date of enactment of the Consolidated Appropriations Act (CAA) of 2021. Enhanced REH services and a fixed monthly facility payment are eligible to hospitals that convert to an REH.
There’s interest from Tribal facilities and IHS to convert to an REH, but there are also questions about the impact of changing the existing payment methodology through the AIR.
Comments Sought on Buffer Stock of Essential Medicines
In the proposed rule, CMS sought comments on a separate payment under the inpatient prospective payment system (IPPS) to improve shortages of essential medicines with consideration under OPPS in the future. No policy changes were made in this final rule regarding access to a buffer stock of essential medicines. CMS intends to address this topic in the future with continued engagement from the public.
Comments Sought on Services Outside of IHS AIR
CMS is reviewing comments regarding high-cost drugs and complex services provided by IHS and Tribal outpayment departments that are paid at the AIR for each encounter. With expanded services and costs, the AIR may not reflect the facility’s true cost to provide these services.
OPPS Transitional Pass-Through Payment for Devices
CMS discussed six complete applications for device pass-through payments in the proposed rule. Two applications are denied and four applications for device pass-through payments have been approved for the final rule.
Comments Sought on Packaging Policy for Diagnostic Radiopharmaceuticals
CMS will further consider comments provided on the topic of the OPPS packaging policy for diagnostic radiopharmaceuticals.
We’re Here to Help
For more information about the CY 2024 OPPS final rule and possible implications for you and your organization, contact your Moss Adams professional.
Additional Resources