EDPMA responds to CMS Hospital Outpatient Payment and Rural Emergency Hospital Proposed Rule for CY 2023.
For the August 2022 Newsletter Article “CMS Releases New No Surprises Act Resources” click here.
As previously announced by EDPMA, on July 15th, the Centers for Medicare and Medicaid Services (CMS) released the calendar year (CY) 2023 Hospital Outpatient Prospective Payment System (OPPS) proposed rule. As part of this annual payment policy and rate setting vehicle, CMS also included provisions related Rural Emergency Hospitals (REHs).
Hospital Outpatient Payments
CMS proposes to increase hospital outpatient payments by 2.7%. While the Medicare Physician Fee Schedule continues to suffer from a lack of a payment update methodology or factor to account for inflation, the hospital payment methodology includes basic annual updates to account for increased costs and expenses. CMS proposes to generally continue its facility payment policies for emergency department visits and critical care services, although, as it has for the last several years, seeks comments on whether it should reconsider its approach to paying for emergency department visits at the facility-level.
Hospital Outpatient Quality Reporting (OQR) Program
Although this rule updates the requirements for the Hospital OQR Program, none of the proposed changes for 2023 and beyond would directly impact emergency medicine.
Rural Emergency Hospitals (REHs)
Congressionally-created in the Consolidated Appropriations Act, 2021, REH is the new enrollment designation for hospitals that “were CAHs [critical access hospitals] or rural hospitals with not more than 50 beds, participating in Medicare, as of the date of enactment” (December 27, 2020) and wish to convert to and enroll in Medicare as an REH. REHs must provide emergency and observation care and are prohibited from providing inpatient services. As you will recall, we recently announced a proposed rule directed at the Conditions of Participation (CoPs) for REHs. The provisions included here in the CY 2023 OPPS proposed rule are directed at REH enrollment, payment, and quality reporting.
REH Enrollment
While the agency proposes to generally utilize its current enrollment processes for REHs, because all REHs will be former critical access hospitals or rural hospitals enrolled in Medicare, CMS proposes that the facilities will use the “change of information” form rather than the “initial enrollment” form.
REH Payment
CMS proposes to implement the statutory provision that would make payments to REHs at 105% of the OPPS rates for those items and services. As directed by statute, this 5% bonus would not affect beneficiary cost-sharing for these services. CMS also lays out the methodology for calculating the separate monthly payment or subsidy that REHs would receive under statute. Based on the prescribed methodology, CMS proposes for CY 2023 that each REH would receive an REH monthly facility payment of $268,294. CMS directs REHs to ensure that they maintain documentation regarding how this monthly payment is spent and highlights that affirmative reporting obligations on the utilization of this money could become a requirement in the future.
Rural Emergency Hospital Quality Reporting (REHQR) Program
CMS is also required to establish quality measurement reporting requirements for REHs, which may include the use of a small number of claims-based measures or patient experience surveys. An REH must submit quality measure data to CMS, and CMS shall establish procedures to make the data available to the public on a CMS website. CMS aims to adopt a concise set of important, impactful, reliable, accurate, and clinically relevant measures for REHs that would inform consumer decision-making regarding care and further quality improvement efforts in the REH setting. However, the number of hospitals that convert to an REH and their characteristics may inform CMS’ selection of quality measures.
In this rule, CMS seeks comment on potential measures for the REHQR Program. Measures under consideration include measures recommended by the National Advisory Committee on Rural Health and Human Services, as well as current or past Hospital OQR measures, including the following, some of which are calculated based on administrative claims data:
- OP-2: Fibrinolytic Therapy Received Within 30 Minutes of ED Arrival
- OP-3: Median Time to Transfer to Another Facility for Acute Coronary Intervention
- OP-4: Aspirin on Arrival
- OP-10: Abdomen Computed Tomography (CT) – Use of Contrast Material
- OP-18: Median Time from ED Arrival to ED departure for Discharged ED Patients
- OP-20: Door to Diagnostic Evaluation by a Qualified Medical Professional
- OP-22: Left Without Being Seen
- OP-32: Facility 7-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy
CMS also seeks comments on measures to assess the patient experience, outcome, and processes related to rural telehealth, behavioral and mental health, and maternal health services.
Physician Self-Referral (“Stark”) Restrictions & Exceptions
CMS also makes a series of proposals to integrate REHs into the physician self-referral regulations (also referred to as the “Stark Law”) and exceptions. In addition to adding REHs to the regulatory text, CMS proposes the creation of a new physician “ownership or investment interest” exception specifically for REHs.
Medicare Outpatient Observation Notice (MOON)
Note that in the proposed rule, CMS addresses REHs in the context of the Medicare Outpatient Observation Notice (MOON). Hospitals and CAHs are subject to statutory requirements mandating the provision of a “written notification and an oral explanation of such notification to individuals receiving observation services as outpatients for more than 24 hours,” indicating that the patient is an outpatient and not an inpatient and the implications of that patient status. This notice is referred to as the Medicare Outpatient Observation Notice (MOON). Because statute does not categorically define an REH as a “hospital” and because there will be no inpatient service from which to distinguish the outpatient care being received by the patient, CMS proposes that REHs will not be required to provide the MOON.
A CMS fact sheet on REHs is available here. CMS notes that it will finalize the REH CoPs with the enrollment, payment, and quality reporting provisions later this Fall.
For those interested in more details on the CY 20223 OPPS proposed rule, CMS issued a press release and fact sheet. EDPMA plans to file comments on the proposed rule by the September 13, 2022 deadline.