MHA



Oct. 1, 2020Ms. Seema Verma AdministratorCenters for Medicare & Medicaid Services Hubert H. Humphrey Building200 Independence Avenue, S.W.Room 445-GWashington, DC 20201Comments submitted electronically at File Code: CMS–1736-P - Medicare Program: Hospital Outpatient Prospective and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; 2021 Proposed RuleDear Ms. Verma:On behalf of its member hospitals, the Michigan Health & Hospital Association (MHA) appreciates this opportunity to provide comments to the Centers for Medicare & Medicaid Services (CMS) regarding the proposed rule to update the Medicare Hospital Outpatient Prospective Payment (OPPS) and Ambulatory Surgical Center (ASC) Payment Systems effective Jan. 1, 2021. As proposed, this rule is projected to increase Medicare fee-for-service (FFS) OPPS payments to Michigan hospitals by an estimated $46 million, or roughly 2.2%, which is lower than the projected healthcare inflation for 2021. This net impact includes the estimated $14 million payment cut for 340B drugs which the MHA opposes. These cuts undermine the intent of the 340B program and further threaten the financial viability of hospitals as they strive to provide services to vulnerable populations. The MHA remains extremely concerned about the future of the Medicare FFS OPPS since the gap between the cost of providing services and OPPS payment rates continues to increase. The Medicare OPPS proposed rule is estimated to result in a $46 million increase to Michigan’s 2021 FFS OPPS payments estimated at $2.166 billion. However, recent data indicates that FY 2018 Medicare FFS OPPS rates fell short of the cost to provide care to Michigan’s FFS enrollees by nearly $400 million or 18.5% based on Medicare allowable costs. When cost increases from 2018 to 2021 are factored in, we anticipate the payment shortfall for Michigan’s hospitals to exceed $400 million. In addition, this does not represent the payment shortfall for services provided to Medicare Advantage (MA) enrollees (many of the MA plans utilize the Medicare OPPS rates) or for laboratory and therapy services which are not paid under the OPPS.Nationally, the payment shortfall for OPPS FFS versus cost is over $7 billion, or 12%. While we understand that the CMS may be reluctant to mitigate the entire OPPS loss in one year, we believe that a structured plan to eliminate the loss is the responsible action for the CMS to take to ensure that the nation’s hospitals remain financially viable to continue providing medical services to the increasing number of Medicare enrollees and other patients. Therefore, the MHA recommends that the CMS develop a plan to increase outpatient payment rates in 2021 and future years to mitigate the loss experienced by hospitals when providing outpatient services to Medicare beneficiaries. Michigan hospitals cannot remain financially viable when outpatient payments cover less than 83% of the cost of providing services. This is particularly critical as more and more services continue to shift from the inpatient to outpatient setting.The MHA’s comments focus on the CMS’ proposed changes for 2021 related to the following: further payment cut for drugs purchased under the 340B drug discount programcontinued payment cut for all clinic visits provided at off-campus hospital outpatient departments (HOPDs) regardless of grandfathered status under Section 603 of the Bipartisan Budget Act of 2015 (BiBA)revisions to the inpatient only list (IPO) and full elimination of the IPO list by 2024addition of procedures to the ASC covered procedures listprior authorization process requirements for additional outpatient hospital department servicesPayment Cuts - 340B DrugsThe MHA objects to deepening payment cuts proposed for separately payable drugs provided to Medicare patients through the 340B drug discount program. These proposed cuts, estimated at $14 million for Michigan hospitals and nearly $400 million nationally, are on top of the cuts implemented in 2018, which cut payments to Michigan hospitals by an estimated $73 million and $1.6 billion nationally. The proposed cuts further decimate the intent of the 340B program and exacerbate the strain placed on hospitals serving vulnerable communities. These cuts also conflict with Congressional intent of the 340B program which is to allow covered entities to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. These cuts will result in the continued loss of much needed resources for 340B hospitals at the worst possible time during the current pandemic. Rather than implementing the proposed cuts, the MHA continues to urge the CMS to reverse the cuts implemented in 2018 and restore payments for separately payable drugs to average sales price (ASP) plus 6%. The CMS is basing the payment reduction on the results of the CMS’ Hospital Acquisition Cost Survey for 340-B Acquired Specified Covered Drugs, which was issued to 1,422 hospitals between April 24 and May 15, 2020. Respondents had the option of answering the “detailed survey” where they provided acquisition costs for each individual drug or biological or the “quick survey” where they indicated a preference that the CMS utilize drug ceiling prices obtained from the Health Resources and Services Administration. This survey was released during a critical time when hospitals were focused on reconfiguring operations and processes due to the COVID-19 pandemic. During this time, hospitals had limited resources and ability to respond to a survey particularly since many staff were repurposed to support efforts to screen and provide care to COVID-19 patients. Other hospitals were unable to respond to the survey due to staffing reductions resulting from the pandemic. Only 7% of hospitals responded using the detailed survey with 55% responding to the quick survey and the remaining 38% not responding. The MHA believes these results are not representative. The MHA believes that hospitals that provide separately payable drugs to Medicare beneficiaries acquired under the 340B program should be paid ASP +6%, consistent with other providers and continue to urge the CMS to remedy the previous cuts as follows rather than implementing additional cuts: Refund payments should be made to each 340B hospital subject to the cuts and calculated using the JG modifier, which identifies claims for 340B drugs that were reduced under the 2018, 2019 and 2020 hospital OPPS rules, and others not adversely impacted by the reductions should be held harmless. This remedy would not disrupt the Medicare program and would restore the payments that were cut from the most vulnerable hospitals. The remedy does not need to be budget neutral since the CMS does not consistently apply budget neutrality to fix its missteps in other relevant instances. For example, the HHS allows for retroactive correction of the wage index without any budget-neutrality adjustment when it made the error and it was not something a hospital could have known or corrected. In addition, budget neutrality does not apply for changes in enrollment or utilization for drugs when the ASP increases. Continuing Payment Cuts for Off-Campus Clinic Visits at Grandfathered SitesThe MHA continues to oppose the cuts implemented in 2019 to reduce payments for clinic visits provided at hospital outpatient departments (HOPDs) that were grandfathered under Section 603 of the Bipartisan Budget Act of 2015. The MHA remains opposed to these cuts which we believe are contrary to the Congressional intent of Section 603 and the 21st Century Cures Act “mid-build” provision and was supported by federal courts for 2019. These cuts threaten to impede access to care, especially in rural areas and other vulnerable communities, and that the CMS, by continuing the cuts has undermined clear congressional intent and exceeded its legal authority. The MHA supports the AHA’s efforts to seek a rehearing by the full United States Court of Appeals for the District of Columbia Circuit of the recent decision overturning a lower court’s ruling in favor of the AHA and hospitals that invalidated HHS’ policy finalized in the 2019 OPPS rule to pay clinic visits in grandfathered HOPDs at the “PFS-equivalent” payment rate of 40% of the OPPS payment rate. In the 2020 rule, the CMS continued its two-year phase-in of the payment cut for clinic visits provided at off-campus HOPDs to pay these visits at 40% of the OPPS payment rate down from 70% paid in 2019. The CMS implemented these cuts in a nonbudget-neutral manner, which means that the CMS reduced hospital OPPS payments nationally by nearly $330 million in 2020 following the $314 million cut in 2019. Litigation ordered that the CMS reprocess 2019 claims to pay at the full OPPS rate. As stated in our comments regarding the 2020 OPPS proposed rule, the MHA opposes this reduction as it is punitive to hospitals that operate off campus clinics which have improved access to these services. Michigan hospitals cannot sustain the estimated $22 million payment cut. Payment reductions of this magnitude challenge hospitals to reassess the financial strength of all service lines, regardless of community needs. A hospital cannot maintain strong financial operations when a key area has such significant losses. In the final rule, the MHA urges the CMS to restore payments for clinic visits at grandfathered HOPDs to 100% of the OPPS rate for 2020, with payments to continue at the full rate in 2021. Proposed changes to the Inpatient Only List (IPO)The inpatient-only (IPO) list identifies procedures and services that Medicare FFS will pay only when provided in the hospital inpatient setting due to the nature of the procedure, the patient’s underlying physical condition or the need for at least 24 hours of postoperative recovery time or monitoring before the patient can safely be discharged. The CMS reviews this list annually to identify any services that should be removed from or added to the list based on the most recent data and medical evidence available using criteria specified in the OPPS rule as medical technologies continue to change. The IPO list currently includes approximately 1,740 services. The CMS proposes to remove 266 musculoskeletal procedures from the IPO list for 2021 with the agency proposing to eliminate the IPO list entirely over a three-year period, from 2021 through 2024. The MHA is concerned about the proposal to eliminate the IPO list which was put into place to protect Medicare beneficiaries since we consider the IPO list an important tool for ensuring that Medicare beneficiaries receive quality care. We also support use of the IPO list since services included on the list are an exception to the 2-midnight rule and are considered appropriate for inpatient admission and payment under Medicare Part A regardless of the expected length of stay. For 2020, the CMS finalized a policy to exempt procedures that have been removed from the IPO list from certain medical review activities for two calendar years following their removal from the IPO list. The CMS proposes to continue this two-year exemption from site-of-service claim denials for procedures that are removed from the IPO list. The MHA urges the CMS to abandon its proposal to eliminate the IPO list. Many of the services on the IPO list are surgical procedures that are majorly invasive, complicated and require the care and coordinated services provided in the hospital inpatient setting. The proposed rule would effectively eliminate Part A coverage for these invasive one-day procedures except in circumstance where the physician exercises his or her clinical judgment to order an inpatient admission based on complex medical factors such as patient history and comorbidities, the severity of signs and symptoms, current medical needs, and the risk of an adverse event supported by the patient’s medical record.Proposed Additions to the ASC Covered Procedures ListThe CMS proposes to add total hip arthroplasty (THA) and ten other procedures to the ASC covered procedures list making them eligible for Medicare FFS payment in the ASC setting. The MHA opposes adding THA to the ASC covered procedures list due to clinical concerns, increased beneficiary coinsurance obligations for ASC procedures compared to hospital outpatient procedures and the risks of providing payment for THA in physician-owned ASCs that are not subject to physician self-referral restrictions. The MHA urges the CMS not to finalize its proposal to add these procedures to the list of ASC-covered procedures since they may pose a safety risk to Medicare beneficiaries when performed in an ASC. Given the compromised health of many Medicare patients, we urge the CMS to continue covering these procedures only in the hospital setting to mitigate risks and ensure that patients have immediate access to life-saving emergency and intensive care unit services. Proposed Prior Authorization Process Requirements for Certain Outpatient Hospital Department Services)Effective July 1, 2020, hospitals must submit a prior authorization (PA) request for any service on its list of five categories of outpatient department services: blepharoplasty, botulinum toxin injections, panniculectomy, rhinoplasty and vein ablation. Medicare Administrative Contractors (MACs) are responsible for this process, which leads to concern about uniformity across all MACs and providers. The CMS proposes to require PA for two new service categories effective for dates of service on or after July 1, 2021: Cervical Fusion with Disc Removal (CPT codes 22551 and 22552) andImplanted Spinal Neurostimulators (CPT codes 63650, 63685 and 63688)Consistent with our comments regarding the 2020 OPPS proposed rule, the MHA believes that the CMS can achieve its policy goal of reducing unnecessary volume for these procedures, while minimizing the administrative burden, by developing a more robust National Coverage Determination (NCD) rather than requiring prior authorization. The MHA continues to encourage the CMS to work with the MACs to develop an NCD for the proposed categories of services. We also believe that the increase in implanted neurostimulators may be due to the reduced use of opioids and increased use of these implants as an alternative for pain relief. Again, the MHA appreciates this opportunity to provide input to the CMS. We believe that our suggested changes particularly those regarding the 340B cuts and continuing payment cut for clinic visits provided at grandfathered off-campus HOPDs would more closely represent Congressional intent. Our recommended changes would have a positive impact for hospitals and all patients they serve. Please contact me at 517-703-8608 or via email at vkunz@ with any questions.Sincerely,Vickie R. KunzSenior Director, Health Finance ................
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