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Long-Awaited, Much-Debated: Proposed OPPS & PFS Rules

August 9, 2019

At the end of last month, the Centers for Medicare & Medicaid Services (CMS) released the much-anticipated calendar year (CY) 2020 Medicare Payment rules.

Touted by CMS as an effort to “empower patients with price transparency and increase competition to lower costs for Medicare beneficiaries,” the proposed Outpatient Prospective Payment System (OPPS) rule for 2020 introduces new price transparency requirements for hospitals, while continuing the agency’s focus on site neutrality, curbing 340B costs, biosimilars, and bundling.

The CY 2020 Physician Fee Schedule (PFS) proposed rule aims to align with the agency’s Patients Over Paperwork initiative with measures to reduce providers' paperwork burden, remove unnecessary reporting measures, and reward clinicians for time spent with patients.  

The price transparency details included within the OPPS and PFS proposed rules for CY 2020 are a direct follow-up to an Executive Order from President Trump and his administration’s promise to infuse pricing transparency into the drug pricing reform conversation. The Executive Order released earlier this summer required follow-up within 60 days from the Department of Health and Human Services (HHS) on the feasibility of this proposal, and these proposed rules serve to satisfy that requirement. The oncology community is eager to continue the drug pricing reform conversation from both a legislative and regulatory perspective, and we want to ensure the complexity and cost of cancer care is seen in these proposals.

Read on for a summary of ACCC’s top-line takeaways for cancer programs and practices from the CY 2020 proposed rules.

Proposed CY 2020 Hospital Outpatient Prospective Payment System:

340B Program
CMS proposes to continue to pay an adjusted amount of the average sales price (ASP) minus 22.5 percent for certain separately payable drugs or biologicals that are acquired through the 340B program. The proposed rule, as is, makes no changes to the covered entities this policy applies to.

CMS acknowledges the ongoing litagation regarding the 340B payment adjustment and solicits comment on alternative payment options for CY 2020 and potential remedies for CY 2018 and CY 2019 payments.

Price Transparency
CMS proposes to require hospitals and insurers to publicly post standard charge information and negotiated rates for a limited set of services in an “easy-to-understand, consumer-friendly, and machine-readable format.” The agency proposes to select 70 shoppable services and require hospitals to select at least an additional 230, for a minimum total of 300. CMS proposes to impose penalties on hospitals of $300 per day for noncompliance.

For 2020, CMS proposes to continue the current policy to make all biosimilars eligible for pass-through payment and not just the first biosimilar biological product for a reference product.

CMS proposes to continue to pay non-pass-through biosimilars acquired under the 340B program at the ASP minus 22.5 percent of the biosimilar’s own ASP rather than the ASP minus 22.5 percent of the reference product’s ASP.

Site Neutrality
As finalized in the CY 2019 rule, for CY 2020, CMS proposes to complete the two-year phase-in of the reduction in payment for clinic visit services furnished in excepted off-campus, provider-based departments. CMS proposes to pay these departments the site-specific PFS rate for the clinic visit service.

Proposed CY 2020 Physician Fee Schedule:

CMS proposes codes for telehealth services covering bundled episode of care for the treatment of opioid disorders.

CMS backed away from proposed Evaluation and Management (E/M) code consolidation for level 2 through level 5 visits put forth in the CY 2019 PFS. Based upon the proposed 2020 rule, we expect to see continued review of E/M codes within the 2021 rule-making cycle. Due to the complexity of oncology care and reliance on level 4 and 5 visits for many patients, the cancer care community applauds CMS for rethinking the finalization of this proposal.

CMS proposes increased payment for care management services.

CMS proposes updates for year three of the Quality Payment Program (QPP), including a proposed new Merit-based Incentive Payment System (MIPS) improvement activity on drug cost transparency and a new way for clinicians to participate in MIPS under the “MIPS Value Pathways” (MVPs).

The CY 2020 OPPS proposed rule was published in the Federal Register on Aug. 8; the proposed CY 2020 PFS is scheduled for publication in the Federal Register on Aug. 14.  

The deadline for submitting comments is 5:00 pm on September 27, 2019. CMS will issue a final rule in November 2019.

ACCC's policy team continues to analyze the impact of these proposals on oncology and will provide in-depth information to members in an upcoming webinar. Stay tuned!

Access CMS’s press release and fact sheet on the proposed 2020 OPPS rule; CMS’s press release and fact sheet on the proposed 2020 PFS and QPP rule; and CMS’s fact sheet on the proposed 2020 QPP rule.