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2020 Outpatient Proposals: 5 Rules You Should Know From CMS

Analysis  |  By Kimberly A. Hoy JD CPC  
   October 21, 2019

Hospital and health system executives should monitor these proposals for provisions that will affect their organizations' operations.

This article appears in the September/October 2019 edition of HealthLeaders magazine.

The 2020 annual rule cycle has been active for CMS. Several proposals in the outpatient prospective payment system (OPPS) proposed rule are controversial, although there is at least one provider-friendly change. Here's a roundup of five regulatory rules hospital and health system executives need to know.

1. Disclosure of standard charges and payer-specific negotiated rates for all items and services

The OPPS proposed rule for CY2020 has a controversial proposal implementing an executive order by President Trump to increase the availability of meaningful price and quality information for patients. The proposal would expand requirements for posting of charges by requiring disclosure of standard charges and payer-specific negotiated rates for all items and services. Hospitals would also have to post the payer-specific negotiated rate for at least 300 "shoppable" services, including 70 selected by CMS, in a consumer-friendly searchable format. Proposed penalties would be over $100,000 a year for noncompliant hospitals. The proposal is likely to generate significant negative commentary from hospitals due to its administrative burden and impact on contract negotiation and competition.

2. Ambulatory surgery center (ASC)-approved procedure and inpatient-only procedure lists

In their continued push toward site neutrality, CMS is proposing to add several procedures, including total knee arthroplasty (TKA), to the ASC-approved procedure list after removing TKA from the inpatient-only list in 2018. CMS is also proposing to remove total hip arthroplasty from the inpatient-only list for 2020, allowing the procedure to be performed on an outpatient basis.

3. Supervision level reduced for hospital outpatient departments

On a provider-friendly note, CMS is proposing to reduce the level of supervision from direct to general for hospital outpatient departments. The current requirement for direct supervision has prevented many community hospitals from providing chemotherapy and other specialty services because they do not have the needed specialists on-site at all times. Several hospitals have paid multimillion-dollar settlements for failure to maintain direct supervision over outpatient services. This regulatory relief will allow community hospitals to expand their specialty service offerings and make outpatient services more economical for all hospitals.

4. Prior authorizations

In another significant proposal, CMS plans to implement requirements for prior authorization for blepharoplasty, Botox injections, panniculectomy, rhinoplasty, and vein ablation.  

5. 340B drug payment reduction

CMS is proposing to continue their payment reduction for 340B purchased drugs but acknowledges the pending litigation to set aside CMS' payment reduction on 340B drugs and has requested comments on possible remedies in the event the discount is set aside.

Hospitals and health system executives should monitor these annual rules carefully for provisions that will affect their organizations' operations.

Kimberly A. Hoy, JD, CPC, is the director of Medicare and compliance for HCPro, a division of Simplify Compliance. 

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