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Fall 2021 - Innovation

2022 Proposed OPPS/ASC and PFS Payment Rules: The Impact on Pharmacy

The proposed 2022 outpatient prospective payment system (OPPS)/ambulatory surgery center (ASC) and physician fee schedule (PFS) rule sets impact all pharmacy practices. Continuing disruptions in healthcare involving multiple sites of care and new requirements necessitate new strategies that emphasize health equity and patient access to “create a healthcare system that results in better accessibility, quality, affordability, empowerment and innovation, touching on multiple facets of healthcare, from price transparency requirements to increased reimbursement rates for ASCs to a variety of health equity and patient safety efforts.” The underlying message is that pharmaceutical practices must upgrade their reimbursement skill sets, become a player in sync with the directions being taken and recognize implications of their decisions, especially if made in a silo without knowledge of the payers. 

2022 Proposed OPPS/ASC Key Areas

Transparency. Only 5.6 percent of U.S. hospitals are fully compliant with the Centers for Medicare and Medicaid’s (CMS) price disclosure rule, according to a study. New enforcement rules for hospital price transparency for standard charges continue to mandate hospitals publish payer-specific negotiated rates and other pricing information on their public websites, with failure-to-comply penalties increasing dramatically to as much as a minimum civil monetary penalty of $300 per day for smaller hospitals (bed count 30 or fewer), $10 per bed per day for hospitals with bed counts greater than 30, and up to $5,500 daily (maximum penalty per hospital increasing from $110,000 per year to more than $2 million per year). A ban on coding that hides prices is addressed in the clampdown on special coding that prevents search engines from displaying pricing in search results. 

Inpatient-only (IPO) list changes. The 2021 OPPS rules began an IPO phase-out by removing nearly 300 of 1,700 services to improve restricted patient choice for surgery sites. The 2022 rules propose a halt to eliminating the IPO list that dictates services only payable by Medicare if performed in the inpatient setting. Both the proposed rollback of the IPO list and reversal of services removed in 2021 are based on stakeholder comments. Reinstated safety criteria for ASC services and removal of 267 procedures from the ASC-covered procedures list added in 2021 are also included. Pharmaceutical practices will be impacted by site changes, which equals loss of 340B pricing. 

Other key areas focus on requests for information for rural emergency hospital providers outlined in the Consolidated Appropriations Act of 2021 and implementation of the radiation oncology model. 

Nonopioid product payment (Section 6082 of the SUPPORT Act). This requires payment review under OPPS/ASC for opioids and evidence-based nonopioid alternatives for pain management to ensure there are no financial incentives to use opioids instead of nonopioids. In 2022, it is proposed to separate or modify payment for nonopioid pain management drugs/biologicals functioning as supplies in ASC settings when those products meet certain CMS criteria (two products currently). 

2022 Payment for Drugs and Biologicals (Based on 2019 vs. 2020 Claims Data)

CMS will continue to pay for Part B drugs divided into two categories: separately payable with line-item reimbursement and not separately payable without line-item reimbursement since payment is part of a bundle/package. Billing for every drug is a CMS essential requirement regardless of which category covers the drug. 

Separately payable with line-item reimbursement.

1) New drugs not yet assigned a unique HCPCS code will be paid at 95 percent of average wholesale price (AWP) when the NDC number is supplied and Medicare administrative contractor (MAC) requirements are met. 

2) New pass-through drugs, biologicals and radiopharmaceuticals (status indicator [SI] G) remain at the 2021 reimbursement rate of average sales price (ASP) plus 6 percent. Policy packaged offsets may apply. Forty-six products keep pass-through status through 2022, with some expiration dates extended. Pass-through status expired for 25 products during 2021. All biosimilars are eligible for pass-through, not just the first one for each reference product. Details are available in Addendum B at 

3) Specified covered outpatient drugs (SI K) retain the threshold of more than $130 per day based on ASP and are paid at ASP plus 6 percent if not purchased under the 340B program, or with payment based on wholesale acquisition cost (WAC) plus 3 percent until enough ASP data is gathered. Rates are ASP minus 22.5 percent if purchased under the 340B program (some exceptions apply) with WAC-priced drugs at WAC minus 22.5 percent and AWP-priced drugs at 69.46 percent of AWP. 

Not separately payable without line-item reimbursement, paid as part of a bundle/package. These include lower-cost packaged products below the less than $130 per day threshold. Also included, regardless of cost, are products used in policy packaged services. Statute sets payment for these packaged drugs, biologicals and radiopharmaceuticals to be included in the services and procedures with which they are reported. Affected products are diagnostic radiopharmaceuticals; contrast agents; anesthesia drugs; implantable biologicals surgically inserted or implanted into the body through a surgical incision or natural orifice; drugs, biologicals and radiopharmaceuticals used as supplies in a diagnostic test or procedure; and drugs and biologicals used as supplies or implantable devices in a surgical procedure.

Note that pass-through expiration dates trigger a SI change from G to either K or N. This affects reimbursement rates and waste billing practices. Therefore, all drugs with SI of G, K and N must be billed for, regardless of whether they are separately payable. Unfortunately, it is common practice for some revenue cycle teams/billing services to put a hard stop on passing SI N-posted charges to the payer, which creates an inaccurate claims data file because the drug therapy and its costs are missing. It also prevents the payment of injectable drug administration charges because the administered drug isn’t listed. 

 2022 PFS Key Areas

Incident-to-pharmacist-provided evaluation and management (E/M) services. There remain no changes in 2021. Reimbursement is limited to CPT code 99211. The changes to split-share billing apply only in institutional settings with no availability in outpatient settings since the “incident-to” regulations govern situations “where a nonphysician practitioner (NPP) works with a physician who bills for the visit, rather than billing under the NPP’s own provider number.” 

Medicare Diabetes Prevention Program (MDPP). Provider enrollment application fees are waived for all organizations seeking to enroll in Medicare as an MDPP. 

Vaccine provision/reimbursement. CMS is reviewing payments for COVID-19 and other preventive vaccines (e.g., influenza, shingles, pneumonia) and seeking feedback from vaccine providers regarding vaccine provision costs, including supplies and resources. 

COVID-19. CMS is seeking provider input on what qualifies as the “home” in its preliminary policy to pay a $35 add-on for certain beneficiaries receiving COVID-19 vaccines at home, and whether COVID-19 monoclonal antibody products should be treated as other physician-administered drugs and biologics under Medicare Part B.

Electronic prescribing of controlled substances. The second phase of electronic prescribing for controlled substances for Medicare Part D drugs is being implemented with some exceptions: prescriber/dispensing pharmacy are the same entity; waivers will be provided for low-volume prescribers and prescribers in natural disaster areas/extraordinary circumstances; and compliance effective dates are extended by one year to Jan. 1, 2023 (Jan. 1, 2025 for long-term care Medicare Part D prescriptions). 

Telehealth services. 

1) Providers will be paid for certain mental/behavioral healthcare services provided via audio-only telehealth calls under certain services (opioid treatment counseling/therapy).

2) Geographic restrictions will be eliminated as barriers to telehealth services for mental health to allow for access to telehealth in the home. 

3) Telehealth used for diagnosis, E/M and treatment of mental health disorders will be covered. Physicians will be paid for mental health visits delivered via telehealth to rural and vulnerable patient populations. 

4) Certain services will be added to the Medicare telehealth list to remain covered through the end of Dec. 31, 2023, so “there is a glide path to evaluate whether the services should be permanently added to the telehealth list following the COVID-19 public health emergency.” 

Other key issues are an appropriate use criteria penalty phase delay, quality payment program changes, physician assistant billing, Medicare Shared Savings program updates, treatment of critical care services and concurrent billing for chronic care management and transition care management services in rural healthcare centers and federally qualified healthcare centers. (Note: The final OPPS actual charge and PFS payment rule sets will be addressed in the Winter edition of BioSupply Trends Quarterly.)

2022 Medicare Inpatient Prospective Payment System/Long-Term Care Final Rule

Inpatient rule sets in a variety of settings operate on a fiscal year beginning Oct. 1, while outpatient rule sets are on a calendar year beginning Jan. 1. After reviewing and considering facility submitted comments, CMS released multiple sets of final 2022 rules. Highlights include: 

1) Add-on payment for COVID-19 treatment through the end of the fiscal year in which the public health emergency ends.

2) Most value-based payment program measures are suppressed during the public health emergency for COVID-19; hospitals will receive neutral payment adjustments in fiscal year 2022.

3) An approximate 2.5 percent rate increase is available to hospitals reporting quality data and that are meaningful electronic health record (EHR) users. Diagnosis-related group payments remain; however, clear, concise and accurate documentation is paramount.

4) Disproportionate shared hospital (DSH) uncompensated care payments will decrease by approximately $1.1 billion from fiscal year 2021.

5) CMS will implement its plan to remove median payer-specific negotiated rates by the Medicare Severity-Diagnosis-Related Groups (MSDRGs) with Medicare Advantage insurers, reducing administrative burdens.

6) The Inpatient Quality Reporting Program reduces payment to hospitals failing to meet defined requirements. CMS will add new measures to the program: COVID-19 vaccination rates among healthcare personnel, a metric targeting maternal morbidity, and two medication-related adverse event electronic clinical quality measures.

7) Changes to the Medicare Promoting Interoperability Program reduce the burden on eligible hospitals and critical access hospitals. Scoring thresholds considered to be meaningful EHR for the objectives and measures increases from 50 to 60 points, out of 100. Electronic clinical quality measures change with two new additions and three removals. 

8) A new COVID-19 treatments add-on payment (NCTAP) is extended for certain eligible products through the end of the fiscal year in which the public health emergency ends. And, the NCTAP is discontinued for discharges on or after Oct. 1, 2021, for a product approved for NCTAP beginning in the fiscal year 2022.


Sequestration is derived from the Latin word sequestrare, which means something is locked away for safe keeping. When the ancient Romans couldn’t agree who owned a piece of property, they gave it to a third party called the sequester who held onto it until the two sides resolved their differences. Currently, the budget limits Congress created in the 2011 Budget Control Act have been under threat of sequester to force legislators to reach deficit-limit agreements. Sadly, the threat didn’t work; implementing the sequester, which cut spending from 2013 through 2021 with subsequent expiration dates extending into the future, the budget deficit looms larger.  

This 2 percent reduction applies only to the 80 percent Medicare reimburses and not to the 20 percent patient copays. However, the COVID-19 pandemic brought a sequestration hold with the Coronavirus Aid, Relief and Economic Security Act, which suspended that cut to all Medicare fee-for-service claims from May 1 through Dec. 31, 2020. The Consolidated Appropriations Act of 2021 further extended the suspension to March 31, 2021. An act to prevent across-the-board direct spending cuts and for other purposes, signed into law April 14, 2021, extends the suspension period only to Dec. 31, 2021. And, the proposed infrastructure bill discussions maintain this date with no further extensions.

Bonnie Kirschenbaum, MS, FASHP, FCSHP
Bonnie Kirschenbaum, MS, FASHP, FCSHP, is a freelance healthcare consultant with senior management experience in both the pharmaceutical industry and the pharmacy section of large corporate healthcare organizations and teaching hospitals. She has an interest in reimbursement issues and in using technology to solve them. Kirschenbaum is a recognized industry leader in forging effective alliances among hospitals, physicians, pharmaceutical companies and distributors and has written and spoken extensively in these areas.