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Key Takeaways from CMS 2023 Final Rule for Hospital Outpatient Departments (HOPDs) and Ambulatory Surgical Centers (ASCs)

On November 1st, Centers for Medicare and Medicaid Services (CMS) published its final rule for CY 2023 Hospital Outpatient Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment Systems and Quality Reporting Programs. Below are some major takeaways most relevant for orthopedic providers.

How much are payment rates changing?

CMS is increasing payment rates for both hospital outpatient settings and ASCs that meet quality reporting requirements by 3.8%, representing an increase over the 2.7% rate CMS proposed in July.

Nonetheless, the American Hospital Association (AHA) has maintained that the 3.8% is insufficient given the various financial challenges faced by healthcare providers and is calling for Congress to establish the required support before 2023.

In addition, even though the AHA, American Association of Orthopedic Surgeons (AAOS) and American Association of Hip and Knee Surgeons (AAHKS), expressed quality-of-care concerns stemming from a proposed decrease in physician reimbursement in the CMS Medicare Physician Fee 2023 rule, CMS ultimately finalized a payment update that the AHA notes reduces payments by around 4.5%. This has led to several physicians urging Congress to pass the Supporting Medicare Providers Act of 2022 to extend a payment increase for physicians in 2023.

Expansion of prior authorization to facet joint interventions

Despite strong protest from the AHA, AAOS, and the Spine Intervention Society (SIS), CMS has decided to finalize its proposal to require prior authorization for facet joint intervention (via injection or nerve destruction) as of July 1, 2023. According to CMS, this rule was finalized to reduce unnecessary increases in volume of these procedures and subsequent improper payments.

According to the 2021 AMA prior authorization (PA) physician survey, however, physicians have reported serious and adverse disturbances in care caused by prior authorization, and some commenters on the CMS proposed ruling echoed those sentiments. In addition, the SIS has warned that facet joint interventions represent important non-opioid alternatives for pain management, expressing concern that this may negate efforts to reduce opioid use. However, CMS has indicated in its comment responses that facet joint interventions require 3 months of conservative care before procedures can take place, maintaining that this means the ruling will not cause any adverse effects for patients.

How is inpatient-only (IPO) list changing in 2023?

In 2020, CMS announced plans to gradually eliminate the IPO list over 3 years, and in 2021 began removing large numbers of procedures from the list. However, CMS then reversed course and halted the elimination of the IPO list and returned most of the removed procedures in 2022.

While this represented an apparent substantial reversal in policy at the time, CMS continues to make updates to the IPO list and has stated its intention to continually assess which procedures should be removed from or added to the list based on specific criteria.

In 2023, CMS is removing 11 procedures and adding 8 procedures to the IPO list, as shown below. Of note for orthopedic care providers will be the removal of several maxillofacial codes, as well as the addition of a total disc arthroplasty code. Notably, a number of these services, particularly the maxillofacial procedures, had been removed from the IPO list in 2021 but were returned when CMS decided to halt the elimination of the IPO list in 2022.

Source: “Table 65: Changes to the inpatient only (IPO) list for CY 2023” from CMS’ CY2023 Medicare Hospital OPPS and ASC Payment System Final Rule

How is ASC covered procedures list (CPL) changing in 2023?

CMS is also adding four procedures to the ASC CPL in 2023, none of which are orthopedic services:

Source: “Table 80: Surgical Procedures Being Added to the ASC CPL in CY 2023” from CMS’ CY2023 Medicare Hospital OPPS and ASC Payment System Final Rule.

While these procedures are not related to orthopedic practice, it is important to remain cognizant of changes to the ASC CPL on an ongoing basis, particularly as many of the procedures CMS has sought to incentivize in the outpatient setting are orthopedic procedures; in this final rule, CMS notes:

“We expect to continue to gradually expand the ASC CPL, as medical practice and technology continue to evolve and advance in future years. We encourage stakeholders to submit procedure recommendations to be added to the ASC CPL, particularly if there is evidence that these procedures meet our criteria and can be safely performed on the typical Medicare beneficiary in the ASC setting”

New provider type: Rural Emergency Hospital

As of January 1, 2023, some critical access hospitals (CAHs) and rural hospitals will be able to enroll as a new Medicare provider type, Rural Emergency Hospitals (REHs), as part of efforts to combat the reduction in care access for rural populations.

This designation allows hospitals that meet the minimum criteria (such as size, services provided, volumes) to effectively convert operations into emergency and outpatient service and receive enhanced OPPS payments for applicable services. This rule was welcomed by medical and surgical societies as an important step in ensuring continued access to care in rural communities.

Have quality reporting requirements changed?

While no significant ortho-specific changes were made to quality reporting programs, analysis of CMS policy-making across clinical settings indicates that CMS-mandated patient-reported outcomes (PRO) collection and reporting, beginning with total hip and knee arthroplasty (THA/TKA), is coming to outpatient facilities and ASCs in the very near future.

In its FY2023 Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital Prospective Payment System (LTCH PPS) final rule, CMS introduced PRO quality reporting measures for certain THA and TKA patients, establishing two  voluntary reporting periods followed by the first mandatory reporting period (learn more here).

While this has no direct impact on HOPDs and ASCs for the time being, the final rule suggests CMS will pursue such measures in outpatient settings in the future:

“We are aware that elective primary THA/TKA procedures are increasingly occurring in hospital outpatient and ambulatory surgical center settings and we will be evaluating options to address measurement of those procedures and settings. Given the relatively recent removal of TKA and THA from the Inpatient Only (IPO) list…we expect that the volume of THA and TKA procedures will continue to increase in HOPDs and ASCs, and that significant numbers of Medicare beneficiaries 65 and older will potentially undergo these procedures in the outpatient setting in future years. We recognize that potential future adoption and implementation of a respecified version of the THA/TKA PRO–PM in the Hospital OQR Program would require sufficient numbers of procedures for each measured HOPD and ASC to ensure a reliable measure score. We proposed the measure in the inpatient setting at this time and will consider potential expansion to other outpatient settings.”

While this will pose numerous challenges, including clinical and administrative workflow disruptions and internal resource allocation difficulties, it also presents organizations with an opportunity to proactively implement digital solutions that help improve outcomes, reduce costs, optimize workflows, scale FTEs, increase patient satisfaction, and ensure CMS PRO reporting compliance. To learn more about considerations you should make when seeking out digital solutions, see here.

Force Therapeutics is more than just a PRO collection tool: our provider-prescribed platform, driven by our AI-powered Intelligent Care Plan, enables comprehensive data collection through a personalized patient experience, leading to strong and sustainable patient engagement, improved outcomes, and optimized clinical workflows.

See what Force Therapeutics can do beyond data collection. Schedule a demo today.

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