Background and Report Highlights
Final Rule Highlights and Potential Implications
- Issued on November 1, 2024, the CY 2025 final rule includes proposed payment rates for outpatient hospitals and ambulatory surgery centers (ASCs). In addition, the final rule includes the adoption of new quality measures, changes to select drug payment policies, and new conditions of participation for obstetrical services and maternal care.
- The final rule includes an update to the Outpatient Prospective Payment System (OPPS) payment rates for hospitals that meet quality reporting requirements of 2.9%. This update is based on a 3.4% projected hospital market basket increase, reduced by a 0.5% productivity adjustment.
- This finalized update is higher than the previously proposed adjustment of 2.6%.
- The CY 2024 OPPS/ASC final rule extended the interim policy by which the productivity-adjusted hospital market basket update is also applied to the ASC payment system through CY 2025. As such, the proposed update to the ASC rates for CY 2025 is also 2.9%.
Additional Details
Payment Updates
- OPPS Payment Update: CMS is proposing to increase payments under OPPS by 2.9%. This is based on a projected hospital market basket increase of 3.4% reduced by a productivity adjustment of 0.5%.
- As a result, CMS estimates that total payments to OPPS providers for CY 2025 will increase by approximately $4.7 billion compared to CY 2024 OPPS payments.
- CMS will also continue to implement the statutory two-percentage-point reduction in payment for hospitals that fail to meet quality reporting requirements.
- ASC Payment Update: From CY 2019 to CY 2023, CMS adopted a policy to update the ASC payment system using the hospital market basket update. Following the COVID-19 Public Health Emergency, CMS extended this policy by an additional two years—through CY 2024 and CY 2025. As such, CMS is using the hospital market basket methodology to finalize an update of 2.9% for ASCs in CY 2025.
- CMS estimates that total payments to ASCs will increase by approximately $308 million compared to the CY 2024 ASC payment.
Coding and Coverage Changes
- Changes to ASC Covered Procedures and Ancillary Services Lists: For CY 2025, CMS is finalizing the addition of 21 medical and dental procedures to the ASC covered procedures and ancillary services lists.
- Changes to Inpatient Only (IPO) List: For CY 2025, CMS is finalizing the addition of three CPT codes to the IPO list. All three codes are related to liver allograft services and are newly created by the AMA CPT Editorial Panel to be effective January 1, 2025. CMS is also finalizing the removal of a pelvic fixation code (CPT 22848) from the IPO list for CY 2025.
- Continuous Eligibility in Medicaid and CHIP: CMS is finalizing the codification of the requirement set by the Consolidated Appropriations Act (CAA) of 2023, which requires states to provide 12 months of continuous eligibility to children under the age of 19 in Medicaid and CHIP.
- CMS is also finalizing its proposal to remove the previous option of applying continuous eligibility to a subgroup of enrollees or limiting continuing eligibility to a time period of less than 12 months. For CHIP, CMS is also removing failure to pay premiums as an optional exception to continuous eligibility in CHIP.
- Access to Non-Opioid Treatments for Pain Relief:CMS is finalizing the implementation of another provision of the CAA, which provides temporary additional payments for certain non-opioid treatments for pain relief in the hospital outpatient and ASC settings through 2027.
- CMS is finalizing its proposal to utilize the top five OPPS procedures by volume, for each non-opioid drug or device, to calculate the payment limitation.
- Payment for Specialized Diagnostic Radiopharmaceuticals: CMS is finalizing its proposal to refine this packaging policy by paying separately for any diagnostic radiopharmaceutical with a per-day cost greater than $630 and removing their costs from the payment amount for the nuclear medicine tests.
- All qualifying products will be paid separately at their mean unit cost, which is a payment rate derived from hospital claims data.
- Diagnostic radiopharmaceuticals with a lower per-day cost would continue to be policy-packaged.
- Note: this is different from the current system in which costs associated with radiopharmaceuticals are packaged into the payment for nuclear medicine tests with which they are used.
- Exclusion of Cell and Gene Therapies from Comprehensive Ambulatory Payment Classification (C-APC) Packaging: CMS is finalizing its proposal to exclude nine qualifying cell and gene therapies from C-APC packaging. The included therapies are generally used for the treatment of certain rare ocular or spinal conditions, and when administered, are the primary treatment being provided to a patient and thus are not integral, ancillary, supportive, dependent, or adjunctive to any primary C-APC services. Therefore, CMS does not believe these services should be packaged into the payment for the primary C-APC service.
Quality Programs
- Hospital Outpatient Quality Reporting (OQR) Program: For CY 2025, CMS is finalizing its proposal to add several measures to the OQR program as well as removing two measures. Hospitals that do not meet quality reporting requirements will receive a reduction of two percentage points in their annual payment update.
- CMS is finalizing adoption of the following measures:
- Hospital Commitment to Health Equity (HCHE) measure, beginning with CY 2025 reporting period
- Screening for Social Drivers of Health (SDOH) measure, with voluntary reporting in CY 2025 followed by mandatory reporting in CY 2026
- Screen Positive Rate for SDOH measure, with voluntary reporting in CY 2025 followed by mandatory reporting in CY 2026
- Patient Understanding of Key Information Related to Recovery After a Facility-Based Outpatient Procedure or Surgery, a patient-reported outcome measure, with voluntary reporting in the CY 2026, followed by mandatory reporting in the CY 2027 reporting period
- CMS is finalizing its proposal to remove the following measures beginning with the CY 2025 reporting period:
- MRI Lumbar Spine for Low Back Pain measure
- Cardiac Imaging for Preoperative Risk Assessment for Non-Cardiac, Low-Risk Surgery measure
- Ambulatory Surgical Center Quality Reporting (ASCQR) Program: Similarly, for CY 2025, CMS is finalizing adoption of the following measures:
- Facility Commitment to Health Equity (FCHE) measure, beginning with the CY 2025 reporting period
- Screening for SDOH measure, with voluntary reporting in the CY 2025 reporting period followed by mandatory reporting in CY 2026
- Screen Positive Rate for SDOH measure, with voluntary reporting in the CY 2025 reporting period followed by mandatory reporting in CY 2026
Other Updates
- Review Time Frame for Hospital Outpatient Department (OPD) Prior Authorization Process: CMS is finalizing its proposal to change the current review time frame for prior authorization requests from 10 business days to 7 calendar days for standard review.
- Obstetrical Services Conditions of Participation (CoP): CMS is finalizing revisions to the current CoP for OB services in an effort to combat the maternal health crisis and improve health and safety. These CoPs include new requirements for:
- Organization and staffing.
- Delivery of service.
- Staff training.
- Quality Assessment and Performance Improvement (QAPI) Program.
- Emergency services readiness.
- Transfer protocols.
These new requirements will be phased in over two years. Specifically, Phase 1 will require hospitals to comply with requirements related to emergency services readiness and transfer protocols within six months following the final rule effective date. Phase 2 will require compliance with organization, staffing, and delivery of services requirements within one year following the final rule effective date. Finally, Phase 3 will require compliance with OB staff training and QAPI program requirements within two years following the final rule effective date.
