CMS Outpatient Rule Finalized, WSHA to Provide Hospital Specific Analyses

December 16, 2020

On December 2, CMS finalized its CY 2021 Outpatient rule, which will have significant ramifications for hospitals over time.  Within the next week, 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 rule include:

Market Basket Increase: CMS finalized an overall marketbasket increase of 2.4 percent for hospitals that meet reporting measures.

Elimination of the Inpatient Only List (IOL). CMS finalized its proposal to phase out the IOL over a three year period, with 298 procedures removed from the list for CY 2021. Procedures removed from the IOL can be provided on an inpatient or outpatient basis. Under the rule, procedures removed from the lOL will not be subject to site of service review until a majority of cases for the specific service are performed on an outpatient basis. WSHA strongly opposed the elimination of the IOL, due to concerns regarding patient safety for some procedures if payors force them to be done on a non-inpatient basis.

Additions to ASC Covered Procedures List: CMS expanded the list for procedures that could be covered in an ambulatory surgical center setting. In its comments, WSHA urged CMS to slow the pace of expansion, citing safety concerns.

Medicare payment for drugs provided by 340B hospitals. CMS proposed reducing the payment rates for drugs provided by 340B hospitals to a net rate of average sales price minus 28.7 percent, an additional reduction from the current cut to ASP minus 22.5 percent. Fortunately, CMS did not finalize the additional cut. WSHA strongly opposed the additional cut and urged CMS to rescind the current cut.

Hospital Clinics: The rule continues the payment reduction to off-campus hospital clinics to 40 percent of the OPPS rate for hospital clinic services. (Andrew Busz,


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