CMS Finalized CY 2023 OPPS and PFS Rules

Published: November 2, 2022

On November 1, the Centers for Medicare & Medicaid Services (CMS) released the final rules for the Hospital Outpatient Prospective Payment System (OPPS) and the Physician Fee Schedule (PFS) for calendar year 2023. The OPPS rule governs “changes to the amounts and factors used to determine the payment rates for Medicare services paid under the OPPS and those paid under the Ambulatory Surgical Center payment system” as well as changes to associated quality reporting programs.  The PFS governs payment policy in Medicare Part B for ambulatory care practice and encompasses changes to related programs, including the Quality Payment Program and the Medicare Shared Savings Program. ASHP is reviewing the final rules, which each run more than 600 pages, and will publishing issue briefs in the coming days outlining key provisions of interest to our members in greater detail.

Hospital Outpatient Prospective Payment System

  • 340BAs a result of the Supreme Court decision in favor of hospitals, CMS has restored the ASP + 6% rate for drugs purchased on the 340B program. However, CMS is still determining how it will remedy underpayments to hospitals following the 340B reimbursement cuts in 2018, but has instituted a -3.09% reduction for non-drug services to “achieve budget neutrality” for 2023. ASHP will continue to advocate for a timely remedy to previous underpayments that does not require cuts to outpatient services reimbursement.
  • Payment for Non-Opioid Pain Management: CMS is continuing to implement the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities (SUPPORT) Act by ensuring that patients have access to non-opioid therapies. In order to avoid disincentivizing the use of non-opioid pain management drugs, CMS finalized separate payment for five drugs that function as surgical supplies.
  • Rural Sole Community Hospital Site Neutral Payment Exemption: Over the past several years, CMS has implemented a site-neutral payment policy for off-campus provider-based departments establishing a clinic visit fee equivalent to the Physician Fee Schedule (PFS) rate. However, due to concerns about patient access, CMS finalized a policy to exempt Rural Sole Community (RSC) Hospitals from the site-neutral changes by paying for clinic visits furnished at an RSC’s excepted off-campus provider-based departments at the full OPPS rate (approximately 60% more than the PFS rate).

  • Payment Adjustments for Domestically-Produced N95s: In order to incentivize the purchase of domestically-produced N95s, CMS finalized a proposal to provide a payment adjustment in both the hospital inpatient and outpatient settings. Specifically, CMS proposes to offset the “addition marginal resource costs that hospitals face in procuring domestically made NIOSH-approved surgical N95 respirators” by making biweekly lump-sum payments to hospitals that are then reconciled at cost report settlement beginning for cost reports on or after January 1, 2023.


Physician Fee Schedule

  • Telehealth Services: CMS finalized a proposal to allow a number of telehealth codes to remain available until the 151 days after the end of the COVID-19 public health emergency (PHE) to allow the agency more time to determine whether they should be made permanentCMS indicated that it will provide program instruction or subregulatory guidance around flexibility “allowing telehealth services to be furnished in any geographic area and in any originating site setting, including the beneficiary’s home, and allowing certain services to be furnished via audio-only telecommunications.” CMS is also delaying implementation of last year’s proposal to require an in-person visit to continue to receive mental health care via telehealth until 152 days after the end of the PHE.
  • Vaccine Provision and Reimbursement: Building on last year’s PFS, CMS finalized a proposal to regularly update the payment for preventive vaccines. Specifically, CMS will update annually payment based on the Medicare Economic Index and adjusted by locality based on the geographic adjustment indicator. CMS is also finalized its proposal to maintain the add-on payment for COVID-19 vaccinations provided to beneficiaries at home through CY 2023.
  • Manufacturer Refunds for Medication Waste: CMS is requiring use of the JW modifier, for reporting discarded amounts of medication, as well as the JZ modifier, which is used when there is no discard. The JW modifier requirement takes effect January 1, 2023, while the JZ modifier is required in outpatient settings by July 1, 2023. CMS is still considering timeframes for medication wastage reporting to manufacturers.

  • Opioid Treatment Programs: CMS finalized its proposal to base payment for the drug component of methadone treatment (under HCPCS codes G2067 and G2078) on the methadone payment amount for CY 2021, updated annually to account for inflation using the PPI for Pharmaceuticals for Human Use (Prescription).

CMS also finalized a proposal loosening restrictions on the provision of certain OTP services via telehealth. Specifically, audio-only services may be used to initiate treatment for buprenorphine when the beneficiary lacks access to audio-visual communications equipment. Additionally, the OTP intake add-on code may be used when initiation of buprenorphine is provided via two-way audio-visual communications technology, as authorized by the Drug Enforcement Administration (DEA) and the Substance Abuse and Mental Health Services Administration (SAMHSA).

In addition to the highlights above, CMS finalized changes to behavioral health services provided in beneficiary’s homes, to the inpatient only list and ASC procedure list, payment for software as a service (i.e., clinical decision making support tools), and to the OPPS and ASC quality reporting programs. ASHP will provide additional detail on these topics in forthcoming issue briefs. We will continue to update members as implementation of the OPPS and PFS final rules progresses.


Posted November 2, 2022

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