On July 10, 2024, the Centers for Medicare & Medicaid Services (CMS) proposed Medicare payment rates for hospital outpatient and Ambulatory Surgical Center (ASC) services. The Calendar Year (CY) 2025 Hospital Outpatient Prospective Payment System (OPPS) and ASC Payment System Proposed Rule is published annually and will have a 60-day comment period, which will end on September 9, 2024. The final rule will be issued in early November.
In addition to proposing payment rates, this year’s rule includes proposed policies that align with several key goals of the Administration, including addressing health disparities, expanding access to behavioral health care, improving transparency in the health system, and promoting safe, effective, and patient-centered care. The proposed rule advances the Agency’s commitment to strengthening Medicare and uses the lessons learned from the COVID-19 PHE to inform the approach to quality measurement, focusing on changes that would help address health inequities.
These proposed payment policies would affect approximately 3,500 hospitals and approximately 6,100 ASCs. As with other rules, CMS is publishing this proposed rule to meet the legal requirements to update Medicare payment policies for OPPS hospitals and ASCs annually. This fact sheet discusses the major provisions of the proposed rule (CMS-1809-P), which can be downloaded at: https://www.federalregister.gov/documents/current.
A fact sheet includes the following surgical related proposals:
Updates to OPPS and ASC payment rates
In accordance with Medicare law, CMS proposes updating OPPS payment rates for hospitals that meet applicable quality reporting requirements by 2.6%. This update is based on the projected hospital market basket percentage increase of 3.0%, reduced by a 0.4 percentage point productivity adjustment.
In the CY 2019 OPPS/ASC final rule with comment period, CMS finalized a proposal to apply the productivity-adjusted hospital market basket update to ASC payment system rates for an interim period of five years (CY 2019 through CY 2023). The CY 2024 OPPS/ASC final rule with comment period extended the interim period for an additional two years, that is, through CY 2024 and CY 2025. Accordingly, using the hospital market basket update, CMS proposes an update factor to the ASC rates for CY 2025 of 2.6%. The update applies to ASCs meeting relevant quality reporting requirements. This update is based on the proposed IPPS market basket percentage increase of 3.0%, reduced by 0.4 percentage point for the productivity adjustment.
Intensive Outpatient Program
Intensive Outpatient Program (IOP) Rate Setting
The CY 2025 OPPS/ASC proposed rule would update Medicare payment rates for intensive outpatient program services furnished in hospital outpatient departments and CMHCs. The IOP is a distinct and organized outpatient program of psychiatric services provided for individuals who have an acute mental illness or substance use disorder, consisting of a specified group of behavioral health services paid on a per diem basis for a minimum of 9 hours of IOP services per week under the OPPS, or another applicable payment system when furnished in hospital outpatient departments, Community Mental Health Centers (CMHCs), Federally Qualified Health Centers (FQHCs), and Rural Health Clinics (RHCs). IOP services may also be furnished in Opioid Treatment Programs (OTPs) for the treatment of opioid use disorder (OUD).
Update to IOP Payment Rates in Hospital Outpatient Departments and 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. Consistent with the OPPS, for this CY 2025 rate setting, CMS is proposing to use the CY 2023 claims data and the latest available cost information from cost reports beginning three fiscal years prior to the year that is the subject of the rulemaking.
For CY 2025, CMS is proposing to maintain the calculation of both hospital outpatient and CMHC IOP 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. CMS believes continuing to use the OPPS data set will allow CMS to capture data from hospital claims that are not identified as PHP but that include the service codes and intensity required for a PHP day.
For more information, visit https://www.cms.gov/newsroom/fact-sheets/cy-2025-medicare-hospital-outpatient-prospective-payment-system-and-ambulatory-surgical-center
