On July 10, 2024, the Centers for Medicare & Medicaid Services (CMS) released the calendar year (CY) 2025 Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems Proposed Rule [CMS-1809-P], which includes proposals to update payment rates and regulations affecting Medicare services furnished in hospital outpatient and ambulatory surgical center (ASC) settings beginning in CY 2025.

For CY 2025, CMS proposes to increase payment rates under the Hospital Outpatient Prospective Payment System (OPPS) and the ASC Payment System by 2.6%. In continuation of an existing policy, hospitals and ASCs that fail to meet their respective quality reporting program requirements would be subject to a 2% reduction in the CY 2025 fee schedule increase factor.

CMS estimates, based on the proposed policies, that total payments to OPPS providers and ASCs (including beneficiary cost-sharing and estimated changes in enrollment, utilization and case mix) for CY 2025 will be approximately $88.2 billion and $7.4 billion, respectively. This growth represents an increase of approximately $5.2 billion and $202 million, respectively, from CY 2024 payment levels.

Key takeaways from the CY 2025 OPPS and ASC Payment System Proposed Rule:

• CMS proposes to not expand the categories of services subject to prior authorization but to harmonize the timeline for review for non-urgent services and procedures.
• CMS proposes to make separate payment for non-opioid treatments (including drugs and devices) for pain relief.
• CMS proposes to revise its current bundling policy for diagnostic radiopharmaceuticals to separately pay for high-cost radiopharmaceuticals with a per-day cost over a specific threshold.
• CMS proposes to update the ASC covered procedures list (CPL) by adding 20 medical and dental surgical procedures to the list, but proposes no procedure removals from the inpatient only (IPO) list for CY 2025.
• CMS proposes to continue to apply a productivity-adjusted hospital market basket update to ASC payments for CY 2025.
• CMS proposes to expand coverage of colorectal cancer screening tests.
• CMS proposes to create exceptions to the Medicaid clinic services benefit four walls requirement.
• CMS proposes a new condition of participation for obstetric services.
• CMS proposes new quality measures focused on health equity and social drivers of health (SDOH) and seeks information on how to further address patient safety.