Medicare proposed outpatient rule removes cuts to 340B hospital payment

July 21, 2022

On July 15, the Centers for Medicare & Medicaid Services (CMS) released its calendar year (CY) 2023 outpatient prospective payment system (OPPS) and ambulatory surgical center (ASC) proposed 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:

Marketbasket update. CMS proposes to update OPPS rates by 2.7% for CY 2023. This change includes a market-basket update of 3.1%, partially offset a statutorily required productivity cut of 0.4 percentage points. As was the case with the proposed inpatient rule, the proposed increase is much smaller than the actual increases to the cost of providing care that hospitals are experiencing.

340B hospitals. CMS announced its intent to restore the payment rate for outpatient drugs provided at 340B hospitals to its former payment rate of ASP plus 6% to 340B-acquired drugs in light of the Supreme Court’s recent decision in American Hospital Association v. Becerra. WSHA provided an amicus brief supporting the AHA in the suit. Because of timing of the court decision, the proposed rule still reflects the existing payment rates of ASP minus 22.5 percent, but will be changed in the final rule. The proposed rule does not address the payment cuts that occurred during the years the cuts were in place. CMS is calling for public comment on ways to craft potential remedies for these years, given that the court’s decision did not address a remedy.

Off-campus clinic services at sole community hospitals. For CY 2023, CMS proposes to exempt rural sole community hospitals from the current policy to pay hospital clinic services at 40% of the OPPS payment amount, citing concerns regarding access to care in rural areas. CMS also is requesting comments on whether it would be appropriate to exempt other rural hospitals, such as those with fewer than 100 beds, from this site-neutral payment policy.

CMS will accept comments on the proposed rule through Sept. 13. WSHA plans to comment and will provide draft comments to members in advance of the comment due date. (Andrew Busz,


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