Following pushback from hospitals, the Biden administration boosted payment rates in its annual rule governing outpatient care payments.
In the final Outpatient Prospective Payment System (OPPS) rule, the Centers for Medicare & Medicaid Services (CMS) set payment rates for hospitals that meet applicable requirements for quality reporting at 3.8%. That update is based on a 4.1% projected increase in the hospital market basket percentage, which includes a 0.3 percentage point adjustment as a productivity adjustment.
The proposed version of the rule included a 3.1% increase to the market basket rate. Providers argued in comments on the proposal that the method used to calculate this figure, an estimate of good and services over the next year, does not keep pace with potential swings in the economy. The American Hospital Association also noted that the calculation does not account for inflation.
In a statement, Stacey Hughes, executive vice president of AHA, said that while the group is pleased with the pay bump, it doesn't go far enough.
"While the AHA is pleased that CMS will provide hospitals and health systems with an improved update to outpatient payments next year compared to the agency’s proposal in July, the increase is still insufficient given the extraordinary cost pressures hospitals face from labor, supplies, equipment, drugs and other expenses," Hughes said. "As we urged, CMS will use more recent data in its calculations on the payment update, resulting in more accurate data that better reflects the historic inflation and tremendous financial pressures hospitals and health systems have confronted recently. However, hospitals are still dealing with a wide range of challenges in providing care, which is why the AHA is urging Congress for additional support by the end of the year."
In addition, the rule finalizes a plan to allow critical access hospitals and small rural hospitals to convert to a new designation called a rural emergency hospital, which CMS hopes is a more sustainable option.
A rural emergency hospital is a new provider type in Medicare that includes outpatient, emergency and observation care.
The rule also outlines that CMS will reimburse hospital outpatient departments for providing remote behavioral health care in the home, with the goal of boosting access in rural and underserved communities.
“CMS is committed to expanding access to care in rural communities and ensuring people with Medicare get the high-quality care they need,” said CMS Administrator Chiquita Brooks-LaSure. “Through the establishment of Rural Emergency Hospitals, supporting clinic visits at rural sole community hospitals and enabling people with Medicare to remotely access behavioral health services in their homes, today’s actions promote patient safety, equity, and quality for these underserved communities. We received broad support for the role Rural Emergency Hospitals can play in advancing health equity and thank stakeholders for their thoughtful input during the public comment period.”
Hughes said AHA is "glad" CMS finalized the new designation, and that it looks forward to working with the agency to continue refining the program.
Editor's note: This article was updated with comments from the American Hospital Association.