CMS Releases CY 2023 Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems Final Rule

On November 1, 2022, the Centers for Medicare & Medicaid Services (CMS) released the calendar year (CY) 2023 Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems Final Rule [CMS-1772-FC], finalizing payment rates and policy changes affecting Medicare services furnished in hospital outpatient and ambulatory surgical center (ASC) settings for CY 2023.

For CY 2023, CMS applied a productivity-adjusted market basket increase of 3.8% under the Hospital Outpatient Prospective Payment System (OPPS) and the ASC Payment System. However, CMS applied several budget neutrality and other adjustments, including a significant 3.09 percentage point reduction to account for changes to its 340B drug purchasing policy. After accounting for these adjustments, the CY 2023 OPPS conversion factor increases by 1.67% over the 2022 value. The ASC conversion factor will increase by 3.88%, a different and more favorable adjustment largely because it is not directly impacted by the 340B-specific budget neutrality adjustment. In continuation of its existing policy, hospitals and ASCs that fail to meet their respective quality reporting program requirements will be subject to a 2% reduction.

Based on the finalized policies, CMS estimates that total payments to OPPS and ASC providers (including beneficiary cost-sharing and estimated changes in enrollment, utilization and case-mix) for CY 2023 will be approximately $86.5 billion and $5.3 billion, respectively, for an increase of approximately $6.5 billion and $230 million, respectively, from CY 2022 program payments.

Key takeaways from the CY 2023 OPPS and ASC Payment System Final Rule:

  • CMS has finalized its proposal to expand the categories of services subject to the prior authorization process to include facet joint interventions. To provide participants additional time to prepare for the addition of facet joint interventions to the prior authorization process, CMS has finalized July 1, 2023, implementation date, rather than the March 1, 2023, implementation date that was proposed.
  • CMS finalized its proposal to return payments for 340B drugs under the CY 2023 OPPS final rule to the full ASP plus 6% rate, reversing the ASP minus 22.5% rate that was established beginning in 2018. The Final Rule also includes a corresponding budget neutrality adjustment applicable to all other items and services paid under the OPPS that decreases payments by 3.09%. Pursuant to a Supreme Court decision, CMS must return payments withheld from the 2018 policy change for the years 2018 through 2022, but CMS determined how it will do so.  CMS indicated that it will make a proposal in a separate rule prior to the release of the CY 2024 OPPS rule.
  • CMS did not extend the transitional pass-through payment for the five technologies with pass-through periods expiring at the end of CY 2022.
  • CMS finalized certain policy proposals to ensure continued access to mental health services via telehealth following the conclusion of the COVID-19 public health emergency (PHE).
  • CMS will for the first time exempt rural Sole Community Hospitals from its site neutral payment policy.
  • CMS finalized Conditions of Participation, payment policies, and enrollment process for Rural Emergency Hospitals, the new hospital type authorized by legislation enacted in 2020.
  • CMS further cements recent flexibilities allowing certain non-physician practitioners to supervise select diagnostic services.
  • CMS finalized its policy to compensate hospitals for the increased cost of acquiring certain personal protective equipment during the COVID-19 pandemic.

Read on for a topline summary of the major provisions in the final rule.

  • The final regulation text is available here.
  • The press release is available here.
  • The fact sheet is available here.

Click here to download the detailed summary of the key provisions in the final rule.