The Centers for Medicare and Medicaid Services (CMS) has finalized its Medicare Hospital Outpatient Prospective Payment System (OPPS) for 2023. The final rule (FR) will affect roughly 3,500 hospitals, as well as approximately 6,000 ambulatory surgical centers (ASCs). Based on a fact sheet published by CMS, it appears there will be substantive changes in store for America’s hospitals in the new year. The following will act to highlight some of the new rules.

Payment Rate Updates

In accordance with Medicare law, CMS is updating OPPS payment rates for hospitals that meet applicable quality reporting requirements by 3.8 percent. This update is based on the projected hospital market basket percentage increase of 4.1 percent, reduced by the 0.3 percent productivity adjustment.

New Provider Type

Due to a growing concern that closures of rural hospitals and critical access hospitals (CAHs) are leading to a lack of services for people living in rural areas, Section 125 of the Consolidated Appropriations Act (CAA) of 2021 established a new Medicare provider type called Rural Emergency Hospitals (REHs), effective January 1, 2023. For information on the establishment of this new Medicare provider type, you can view the Rural Emergency Hospital fact sheet https://www.cms.gov/newsroom/fact-sheets/cy-2023-medicare-hospital-outpatient-prospective-payment-system-and-ambulatory-surgical-center-1.

340B Program Drugs

Section 340B of the Public Health Service Act (340B) allows participating hospitals and other providers to purchase certain covered outpatient drugs from manufacturers at discounted prices. In this FR, CMS reexamined the appropriateness of paying the average sales price (ASP) plus 6 percent for drugs acquired through the 340B Program, given that 340B hospitals acquire these drugs at steep discounts.

In light of the U.S. Supreme Court’s decision in American Hospital Association v. Becerra (No. 20-1114, 2022 WL 2135490), CMS is finalizing for 2023 a general payment rate of ASP plus 6 percent for drugs and biologicals acquired through the 340B Program, consistent with its policy for drugs not acquired through the 340B program. As required by statue, CMS is implementing a –3.09 percent reduction to the payment rates for non-drug services to achieve budget neutrality for the 340B drug payment rate change for CY 2023. Claims for 340B-acquired drugs paid after the district court’s September 28, 2022 ruling are paid at the default rate (generally ASP plus 6 percent).

Pass-through Payments

CMS has determined that four devices have qualified for transitional device pass-through status, beginning January 1, 2023. In addition, CMS is finalizing its proposal to resume the usual process of using claims data from two years prior to the year to set rates for the calendar year. Accordingly, CMS is finalizing its proposal to not provide any additional quarters of separate payment for any device category whose pass-through payment status will expire between December 31, 2022, and September 30, 2023.

OPPS Payment for Software as a Service

According to the CMS fact sheet, algorithm-driven services that assist practitioners in making clinical assessments can include clinical decision support software, clinical risk modeling, and computer aided detection (CAD). These technologies are referred to as “software as a service” (SaaS). The 2023 OPPS FR creates an exception to CMS’s general packaging policy for SaaS add-on codes. The SaaS add-on codes will be assigned to identical APCs and have the same status indicator assignments as their stand-alone codes, thereby allowing for separate payment for these services.

Partial Hospitalization Program

Rate Setting

The 2023 OPPS updates Medicare payment rates for the partial hospitalization program (PHP) services furnished in hospital outpatient departments and community mental health centers (CMHCs). The PHP is an intensive, structured outpatient program provided as an alternative to psychiatric hospitalization, consisting of a group of mental health services paid on a per diem basis under the OPPS based on PHP per diem costs.

Per Diem Rates

CMS is finalizing its proposal to maintain the existing rate structure, with a single PHP Ambulatory Payment Classification (APC) for each provider type, for days with three or more services per day.

Consistent with the OPPS for this 2023 rate setting, CMS is finalizing—only for 2023—an equitable adjustment to the 2023 CMHC APC payment rate. That is, CMS will maintain the 2022 CMHC APC payment rate of $142.70 for the 2023 CMHC APC final payment rate.

Behavioral Health Services

CMS is clarifying in this final rule that the new HCPCS codes being adopted under the OPPS describing certain behavioral health therapy services furnished remotely by hospital staff using communications technology to beneficiaries in their homes will not be recognized as partial hospitalization services. Rather, they will be available to those in a partial hospitalization program. Specifically, CMS is clarifying that a hospital could bill for non-PHP outpatient services furnished to a PHP patient, including remote therapy services furnished by a hospital outpatient department. Hospitals will be permitted to bill for these remote non-PHP behavioral health services but will need to continue to comply with documentation requirements that apply to PHP patients.

OPPS Payment for Dental Services

The 2023 OPPS FR provides for coding changes relative to certain covered dental services in 2023. They are as follows:

• CMS is creating a new G-code to describe dental rehabilitation services that require monitored anesthesia and the use of an operating room (OR). CMS is assigning this new G-code to APC 5871 (Dental Procedures), effectively increasing the payment for these dental rehabilitation services from about $200 to about $2000. This code can be used to bill for covered services furnished to patients with special health needs that require general anesthesia in an OR to receive dental care.
• CMS is clarifying that existing unlisted CPT code 41899 should be used to bill for covered, non-surgical dental services, or surgical dental services not performed under monitored anesthesia in an OR, not otherwise described by existing dental codes already assigned to an APC. The final rule further clarifies that, for Medicare payment to be made for dental services, including services that may be described by G0330, Medicare coverage requirements for dental services as finalized in the FR, must be met.