The Calendar Year (CY) 2022 Medicare Hospital Outpatient Prospective Payment (OPPS) and Ambulatory Surgical Center (ASC) Payment Systems Final Rule (Final Rule) was published on November 16, 2021. In the Final Rule, the Centers for Medicare & Medicaid Services (CMS) significantly increased penalties for non-compliance with price transparency rules, reinstated the Inpatient Only list, and implemented several additional policies that signal its ongoing efforts to navigate the 2021 change in administration and the COVID-19 Public Health Emergency. Below are key takeaways. 

1. Hospital Price Transparency

CMS’ Hospital Price Transparency Final Rule, which became effective January 1, 2021, requires hospitals to annually publish a list of all standard charges for all items and services (Charge Lists). To address hospitals’ sub-optimal compliance, the Final Rule made certain modifications to the Hospital Price Transparency Final Rule

Chiefly, beginning January 1, 2022, CMS increased the penalty amounts for noncompliance, calculated based on hospitals’ bed counts: $300 per day for hospitals with 30 or fewer beds; and $10 per bed, per day for hospitals with a bed count greater than 30. Annually, the minimum total penalty amount would be $109,500 per hospital, and the maximum total penalty amount would be $2,007,500 per hospital.

Additionally, the Final Rule required hospitals’ Charge Lists be accessible to automated searches and direct downloads. Finally, the Final Rule provides that federally owned or operated hospitals, not treating the general public, will be deemed to be in compliance with the Hospital Price Transparency Rule, as these hospitals’ charges are already publicized to their patients in advance.

2. Reinstatement of the Inpatient Only List

CMS historically restricted payment for certain services in an outpatient setting, deeming that services on its Inpatient Only (IPO) list required an inpatient level of care. In 2021, CMS initiated a major change for hospitals through a gradual elimination of the IPO list. The Final Rule, in an abrupt reverse course, reinstated the IPO list for all but a select number of services. Explaining its reinstatement, CMS noted stakeholder pushback on several fronts, including patient safety and accuracy of OPPS rate setting for services removed from the IPO list.

In connection with reinstatement of the IPO list, CMS amended the IPO list regulation at 42 CFR § 419.22(n) to remove references to elimination of the IPO list. CMS also codified its longstanding criteria for determining whether a service should be removed from the IPO list in a new regulation at 42 CFR § 419.23.

Finally, CMS finalized its proposal that for a period of two years, procedures removed from the IPO list will be exempt from twomidnight rule medical review activities such as site-of-service claim denials, Beneficiary and Family-Centered Care Quality Improvement Organization (BFCC-QIO) referrals, and Recovery Audit Contractor (RAC) referrals.

3. ASC Covered Procedures List

The Proposed Rule reinstated the ASC Covered Procedures List (CPL) criteria that had been in effect in CY 2020. The reinstated criteria follow the safety standards specified in 42 C.F.R. § 416.166, which exclude from reimbursement surgical procedures that may pose a significant safety risk to a typical Medicare beneficiary when performed in an ASC. Under thesecriteria, the 2022 OPPS Proposed Rule (Proposed Rule) proposed the removal of 258 procedures from the CPL. Based on commenters’ feedback, the Final Rule ultimately removed 255 procedures from the CPL. The Final Rule also installed a nomination process for adding services to the CPL, by which stakeholders may nominate a procedure to be added to the CPL in the subsequent rulemaking cycle. Subregulatory guidance on the nomination process is anticipated to be released in early 2022.

4. Additional Key Takeaways

OPPS and ASC Rate Updates. For CY 2022, CMS increased OPPS and ASC payment rates by 2% for hospitals and ASCs that meet applicable quality reporting requirements. Failure to meet quality reporting requirements will result in a 2% rate reduction. Due to the variability of CY 2020 data caused by COVID-19, CMS used CY 2019 claims data to set these rates.

Temporary COVID-19 Measures. In the Proposed Rule, CMS sought comment on whether to permanently adopt certain flexibilities currently in place due to COVID-19. CMS focused on COVID-19 flexibility regarding 1) mental health services furnished by hospital staff remotely to patients in their homes; 2) direct supervision of pulmonary rehabilitation, cardiac rehabilitation, and intensive cardiac rehabilitation by audiovirtual communication technology; and 3) payment for COVID-19 specimen collection in hospital outpatient departments. Although CMS did not permanently adopt these flexibilities as part of the Final Rule, CMS noted that it intends to continue considering comments as part of future rulemaking.

Continuation of Site-Neutral Policy for Clinic Visits. CMS will continue its site neutral policy of paying for clinic visits provided at off-campus hospital outpatient departments at 40% of the OPPS rate. This policy has been a topic of significant industry pushback and litigation since implementation in 2019. In 2019, hospital plaintiffs successfully challenged this policy at the federal district court level. However, in 2020 the US Court of Appeals upheld CMS’s authority to implement site neutrality, and in June 2021, the U.S. Supreme Court declined to hear the case. Given this outcome, CMS’s site neutral policy is likely here to stay

Quality Reporting Programs. CMS finalized updates to quality reporting measures under the Hospital Outpatient Quality Reporting Program and the ASC Quality Reporting Program, including the addition of COVID-19 Vaccination of Health Care Personnel Among Healthcare Personnel as a reporting measure.

Radiation Oncology Alternative Payment Model. CMS implemented its Radiation Oncology Alternative Payment Model (RO Model) effective January 1, 2022. The RO Model was initially slated for January 1, 2021 but was delayed due to COVID-19.