CMS Outpatient Proposed Rule Reverses Elimination of Inpatient-Only List, Increases Transparency Noncompliance Penalties

July 21, 2021

On July 18, CMS released its Proposed CY 2022 Outpatient rule. The proposed rule reverses some policies that were opposed by WSHA and other hospital organizations but adopted in the 2021 rule. In the coming weeks, WSHA will provide a comprehensive description of the rule and hospital-specific analyses to the CFO or designated finance staff at each member hospital. Major provisions of the proposed rule include:

Market Basket Increase: For CY 2022, CMS proposes an overall net marketbasket increase of 2.3 percent for hospitals that report quality data.
Use of CY 2019 Claims Data for CY 2022 OPPS and Ambulatory Surgery Center (ASC) Rate Setting: Because of the COVID-19 public health emergency, which significantly affected outpatient utilization, the agency is proposing to use CY 2019 rather than CY 2020 claims data to set CY OPPS and ASC rates.

Elimination of the Inpatient Only List (IOL) and Additions to ASC Covered Procedures List (CPL): In a significant policy reversal, CMS proposes to halt the three-year phased elimination of the IPO list that was finalized in CY 2021 and reinstate the 298 services removed from the IPO list in CY 2021 back to the IPO list beginning in CY 2022. CMS proposes to exempt for two years from medical site of service review those procedures that were removed from the IPO list on or after Jan. 1, 2021. CMS also proposes to re-adopt the ASC Covered Procedures List (CPL) criteria that were in effect in CY 2020 and remove 258 of the 267 procedures that were added to the ASC CPL in CY 2021. The agency also proposes to move to a new nomination process for new procedures to be added to the CPL. WSHA is pleased with the proposed changes and had strongly opposed the elimination of the IOL and additions to the CPL finalized in the CY 2021 rule.

Price Transparency: CMS proposes a number of modifications to the hospital price transparency rule, including significant increases to the civil monetary penalty (CMP) for noncompliance. CMS proposes to scale up the CMP based on bed count, up to a maximum of $5,500 per day for large hospitals. At this rate, the maximum total penalty for a full calendar year would be $2,007,500 per hospital for the largest hospitals. CMS seeks comment on this approach, as well as alternative calculations for scaling the CMPs, such as hospital revenue, the nature, scope, severity, and/or duration of noncompliance, and the reason for noncompliance.

Medicare Payment for Drugs Provided by 340B Hospitals: CMS proposes to continue its policy to pay for 340B drugs at Average Sales Price (ASP) minus 22.5 percent. On July 2, the Supreme Court of the United States agreed to take up a request by the American Hospital Association and other hospital organizations that the Court review an appeals court decision affirming the cuts. WSHA participated in an amicus brief in support of AHA’s request and will continue to engage on this issue.

Request for Comments on Rural Emergency Hospitals: CMS solicits public comments on the establishment of a Rural Emergency Hospital (REH) model established by the Consolidated Appropriations Act. CMS requests stakeholder feedback on health and safety standards and input on conditions of participation. Additionally, CMS asks for public comments on health equity focused issues, payment policies, and the establishment of quality measure requirements.

CMS will accept comments on the rule through Sept. 17, and a final rule is expected around the beginning of November. (Andrew Busz,


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