On July 15, 2022, the Centers for Medicare & Medicaid Services (CMS) released the calendar year (CY) 2023 Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems Proposed Rule [CMS-1772-P], which includes proposals to update payment rates, policies and regulations affecting Medicare services furnished in hospital outpatient and ambulatory surgical center (ASC) settings beginning in CY 2023.

For CY 2023, CMS proposes to increase payment rates under the Hospital Outpatient Prospective Payment System (OPPS) and the ASC Payment Systems by 2.7%. In continuation of an existing policy, hospitals and ASCs that fail to meet their respective quality reporting program requirements are subject to a 2.0 percentage point reduction in the CY 2023 fee schedule increase. Consistent with these increases, CMS proposes a CY 2023 OPPS conversion factor of $85.093 and a CY 2023 ASC conversion factor of $51.315.

CMS estimates, based on the proposed policies, that total payments to OPPS and ASC providers (including beneficiary cost-sharing and estimated changes in enrollment, utilization, and case-mix) for CY 2023 will be approximately $86.2 billion and $5.4 billion, respectively. This represents an increase of approximately $6.2 billion and an increase of $130 million, respectively, from CY 2022 payment amounts.

Key takeaways from the CY 2023 OPPS and ASC Payment System Proposed Rule include:

• CMS proposes to expand the categories of services subject to the prior authorization process.

• The agency is not yet ready to disclose how it will change payments to hospitals for drugs purchased and furnished under the 340B program in light of a recent Supreme Court of the United States decision invalidating steep payment reductions first implemented in 2018, although it is expected that CMS will formalize a revised policy in the final rule effective for CY 2023.

• CMS does not propose to extend the transitional pass-through payment for the five technologies with pass-through periods expiring at the end of CY 2022.

• CMS outlines policy proposals to ensure continued access to mental health services via telehealth following the conclusion of the COVID-19 public health emergency (PHE).

• CMS proposes to maintain its site neutrality process, but for the first time proposes to exempt rural sole community hospitals from the existing policy.

• CMS announced payment policies for rural emergency hospitals, the new hospital type authorized by legislation enacted in 2020.

• CMS proposes to further cement recent flexibilities allowing certain non-physician practitioners to supervise select diagnostic services.

• CMS proposes to compensate hospitals for the increased cost of acquiring certain personal protective equipment during the COVID-19 pandemic.

• CMS solicits feedback on several requests for information (RFIs), including RFIs focused on organ acquisition and software as a service.

Comments on the proposed rule are due September 13, 2023.

• The proposed regulations are available here.

• The press release is available here.

• The fact sheet is available here.