CMS Proposed Outpatient Rule Continues to Take Aim at Hospitals

August 7, 2019

On July 29, the Centers for Medicare and Medicaid Services (CMS) released its proposed 2020 Outpatient Prospective Payment rule. WSHA again finds CMS’ direction concerning and will be commenting in opposition to many of provisions contained in the rule. The CMS proposal includes the following:

·         Expansion of the 2019 requirement that hospitals post their standard charges to include their negotiated payments with payors for up to 300 “shoppable” sets of services. WSHA generally supports increased transparency to patients but is concerned that this proposal fails to take into consideration the role of the patient’s health plan coverage in determinizing a patient’s actual cost for services. The proposal creates significant operational and technical challenges for hospitals, in additional to the contractual and legal issues involved. This new requirement applies to all types of hospitals.

·         Continuation of the 30 percent cut to Medicare payments for drugs provided by 340B hospitals, despite a court ruling in favor of hospitals that CMS exceeded its regulatory authority and the cuts were unlawful. In the proposed rule, CMS is asking for comments on whether a smaller cut to 340B payments would be more acceptable. Expansion of its phase-in of cuts to grandfathered off-campus hospital clinics based on the rule finalized last year. For 2019, payments were reduced by 30 percent, to 70 percent of the regular OPPS. Under the proposed rule, 2020 clinic services would be reduced by an additional 30 percent, to 40 percent of the regular OPPS rate. The American Hospital Association and hospitals, including Olympic Medical Center are challenging the 2019 cuts in court on the basis that Congress did not authorize CMS to apply site-neutral cuts to grandfathered clinics, only new facilities opened after November 2015.

·         Clarification of the “general supervision” rather than a “direct supervision” standard for outpatient services, a change WSHA, AHA and hospitals have been seeking for several years. Adoption of the direct supervision standard is important for access to care, particularly in rural areas.

Comments on the proposed rule are due September 27. WSHA will be commenting on these items and other provisions of the rule. We will distribute a copy of our draft comments to members prior to the comment deadline. (Andrew Busz,



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