General OPPS Payment
The OPPS payment rates for hospitals that meet the applicable quality reporting requirements will be increased by 2.6 percent, per the PR. This update is based on the projected hospital market basket percentage increase of 3.0 percent, reduced by a 0.4 percentage point productivity adjustment.
Intensive Outpatient Program
The proposed rule would update Medicare payment rates for Intensive Outpatient Program (IOP) services furnished in hospital outpatient departments and Community Mental Health Centers (CMHCs). CMS is proposing to maintain the existing rate structure, with two IOP APCs for each provider type: one for days with three services per day and one for days with four or more services per day.
Partial Hospitalization Program
The PR would maintain the existing Partial Hospitalization Program (PHP) rate structure, with two PHP APCs for each provider type: one for days with three services per day and one for days with four or more services per day. CMS is proposing to maintain the calculation of both hospital outpatient and CMHC PHP payment rates for three services per day and four or more services per day based on cost per day using OPPS data that includes PHP and non-PHP days.
Remote Services
The PR ties OPPS reimbursement for remote services by hospital staff to individuals in their homes (including remotely furnished outpatient therapy services, Diabetes Self-Management Training and Medical Nutrition Therapy services, and mental health services) to Medicare telehealth requirements billed under the Medicare Physician Fee Schedule (PFS).
Non-Opioid Pain Relief
CMS is proposing to implement Section 4135 of the Consolidated Appropriations Act (CAA), 2023, which provides temporary additional payments for certain non-opioid treatments for pain relief in the hospital outpatient department (HOPD), from January 1, 2025 through December 31, 2027. The proposal includes utilizing the top five OPPS procedures by volume for each non-opioid drug or device to calculate the payment limitation. A payment offset of zero dollars would be assigned for the qualifying non-opioid products. The PR states that seven drugs and one device qualify as non-opioid treatments for pain relief and that these products are to be paid separately in the HOPD setting starting in 2025.
Clinical Trials of Drugs and Devices
In the 2023 OPPS final rule with comment period, CMS finalized a policy to make a single blended payment for devices and services in Category B Investigational Device Exemptions (IDE) studies in order to preserve the scientific validity of these studies by avoiding differences in Medicare payment methods that would otherwise reveal the group (treatment or control) to which a patient had been assigned. The 2025 proposed rule extends the agency’s coding and payment policy to trials for drugs and devices that meet CAG’s coverage and evidence development (CED) requirement, for which the trial includes a treatment and control arm.
Post-Incarceration Considerations
The PR narrows the definition of “custody” in Medicare’s payment exclusion rule and revises the Medicare special enrollment period (SEP) for formerly incarcerated individuals. Under Medicare regulations, an individual who is in custody of penal is presumed to have no legal obligation to pay for his or her healthcare; therefore, Medicare is presumed to be prohibited from paying for healthcare items or services furnished to such individuals. Currently, the definition of “custody” is very broad, including not only individuals who are physically detained in prison or in jail but also potentially individuals who are on parole or probation. There is a presumption that Medicare will not pay for healthcare services furnished to such individuals. Accordingly, CMS is proposing to narrow the definition of “custody” to no longer include individuals who are on parole, probation or home detention.
CMS is also proposing to revise the eligibility criteria for the special enrollment period for formerly incarcerated individuals to include individuals who have been released from incarceration or on parole, probation or home detention and align more closely with the Social Security Administration’s criteria for determining incarceration status.
More highlights arising from the 2025 OPPS proposed rule, including proposals dealing with the quality metrics reporting requirements, will be forthcoming in future alerts.