Hospitals quickly blasted CMS’ calendar year 2025 proposal to boost pay for hospital outpatient and ambulatory surgical centers by a net 2.6% increase as inadequate and also pushed back on efforts to use Medicare Conditions of Participation to drive policy changes, including by setting baseline requirements for obstetric services for the first time. Medical device stakeholders, however, were pleased with the agency’s proposals to improve pay for radiopharmaceuticals.

The draft CY 2025 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) rule also codifies the 12-month CHIP/eligibility for children, expands coverage for formerly incarcerated people, adds new measures to the quality reporting program to advance equity and provides an add-on payment for high-cost drugs and biologics covered by the Indian Health Service (IHS).

It proposes several new measures for the quality reporting programs and would alter the process for removing measures that are not improving outcomes. CMS also seeks comments on proposed changes to the Star Quality Rating System.

In a release on the rule, CMS highlights the maternal health proposal aiming to reduce maternity-related deaths that disproportionately affect racial and ethnic minorities, most of which are preventable.

CMS has broad authority to establish health and safety regulations, including those for maternal care. However, the agency says there are currently no baseline requirements for hospitals and Critical Access Hospitals regrading organization, staffing, training, maternal health quality assessments and performance improvement (QAPI) and delivery of obstetrical services.

Therefore, CMS proposes for the first time, to revise the Conditions of Participation for OB services to add those baseline requirements and ensure all hospitals participating in Medicare are held to a consistent standard. The rules also propose changes to the CoP for hospitals and CAHs that provide emergency services, discharge planning for all hospitals and to CAH transfer protocols.

“The proposed hospital outpatient rule builds on the Biden-Harris Administration’s commitment to reducing the nation’s high maternal mortality rate and actions outlined in the White House Blueprint for Addressing the Maternal Health Crisis, increasing access to services in tribal, rural, and other underserved communities, and addressing barriers to Medicare coverage for those recently incarcerated. This proposed rule is proof that we are committed to ensuring people aren’t just covered, but that coverage is meaningful,” CMS Administrator Chiquita Brooks-LaSure said in a statement.

Hospitals quickly blasted the pay rate, which includes a 3.0% market basket increase net a 0.4% productivity adjustment. “It is no secret that the financial pressures hospitals are facing are being compounded by inflation, stubborn labor shortages and an aging demographic,” Premier said in a statement. “Payment policies should empower hospitals to deliver exceptional, patient-centric care, but the proposed update falls short on this objective.”

Premier says CMS can course correct by using better methodologies and new data sources to accurately gauge hospitals’ true costs, including comprehensive labor expenses.

The American Hospital Association says the inadequate update comes even as many hospitals are operating on negative or very thin margins. ‘Hospitals’ and health systems’ ability to continue caring for patients and providing essential services for their communities may be in jeopardy, and we urge CMS to provide additional support in the final rule,” the lobby says.

AHA further says that while it shares CMS goal of improving maternal health outcomes and reducing inequities in maternal care, the lobby worries about CMS’ “continued and excessive” use of CoPs to drive its policy agenda. “We believe a less punitive and more collaborative and flexible approach is far superior. We will carefully review CMS’ proposals to determine whether they are feasible, sufficiently flexible for the wide variety of hospitals to which they would apply and do not inadvertently exacerbate maternal care access challenges.”

Premier is also disappointed CMS moved forward with the new CoP around obstetrics, saying while it supports the standardization of data collection and measures and agrees care delivery standard can help address maternal mortality, any policy change must ensure that it does not reduce access to care. “An obstetric services CoP that results in the loss of Medicare certification for compliance failure is far too harsh a penalty, resulting in further limits to obstetrical care and potentially higher rates of maternal morbidity and mortality. In trying to address the maternal crisis, the last thing we want to do is intensify disparities we know are already present in obstetrical care,” Premier says.

Premier notes that the HHS’ Office of Women’s health has tapped into Premier’s data to help understand why disparate outcomes occur and urges CMS to hold off on the creation of a CoP until the results of HHS’ work are available and instead focus on how it can improve data collection, standards, and other elements of obstetrical care.

Diagnostic Radiopharmaceuticals.

CMS is proposing to pay separately for higher-cost diagnostic radiopharmaceuticals that are packaged into the payments for nuclear tests, a move applauded by medical device stakeholders who have been lobbying for adjustments. The agency says that while packaging the payments generally works, there are some situations where the package fails to account for the costs of certain products, even if they’re the most clinically appropriate.

The agency proposes to pay separately for any radiopharmaceutical with a per-day cost that is greater than $630, and to remove their costs from the payment amounts for the nuclear medicine tests. Any diagnostic radiopharmaceutical with a per-day cost equal to or below that threshold would continue to be policy-packaged, with costs incorporated into the payment rates for the nuclear medicine tests, CMS notes.

Patrick Hope, executive director of AdvaMed Imaging, says the proposal is welcome news for patients and their families. “With this proposal, CMS is recognizing the value of diagnostic radiopharmaceuticals and the importance of expanding access of these diagnostic imaging agents to more patients so that they might receive better treatment and care,” he says. “Achieving separate payment for diagnostic radiopharmaceuticals continues to be a top priority for AdvaMed — millions of patients and their family members applaud this positive step in the right direction. We look forward to working with all stakeholders in support of this proposal to being finalized beginning in 2025.”

CMS also proposes to establish a $10 add-on payment for radiopharmaceuticals that use a certain isotope (Tc-99m) that is derived from domestically produced MO-99 starting Jan. 1, 2026. The policy would help counteract the effect of foreign governments subsidization of those products that disincentives domestic investments in MO-99 production infrastructure, the agency says. “We believe the $10 add-on payment for domestically produced Tc-99m would ensure equitable payments by paying providers who use domestically produced Tc-99m radiopharmaceuticals when available, an amount that reflects the anticipated higher cost of these products.”

Formerly Incarcerated Individuals. The draft rule would narrow the definition of custody so that it excludes people on parole, probation or home detention, and thus allows Medicare to pay for those services/items. The agency also proposes a special enrollment period for those individuals and seeks comments on how the policies should apply to people living in halfway houses.

Quality Reporting Programs. The agency proposes several updates to the various Quality Reporting programs.

For the Hospital Outpatient and the Rural Emergency Hospital reporting programs, CMS proposes three measures, including the Hospital Commitment to Health Equity measure, starting in 2025, the Screening for Social Drivers of Health (SDOH), starting with voluntary reporting in 2026, and Screen Positive Rate for SDOH, starting with voluntary reporting in 2025 that will be mandatory in 2026.

For the ASC QR program, CMS proposes to adopt the Facility Commitment to Health Equity (FCHE) measure starting with the CY 2025 reporting period and the two SDOH measures, starting with the hospital and rural emergency programs.

For hospitals, CMS seeks to adopt the Patient Understanding of Key Information Related to Recovery After a Facility-Based Outpatient Procedure or Surgery, Patient Reported Outcome-Based Performance measure (Information Transfer PRO-PM) beginning with voluntary reporting in the CY 2025 reporting period followed by mandatory reporting beginning with the CY 2026 reporting period. This would provide insight into the communication of recovery information and enable hospital outpatient departments to improve patient understanding of such information, CMS says.

CMS also proposes to remove two reporting measures, one — the MRI Lumber Spine for Low Back Pain — because studies show that performance or improvement on the measures doesn’t result in better outcomes — and the Cardiac Imaging for Preoperative Risk Assessment for Non-Cardiac, Low-Risk Surgery measure, because it does not provide meaningful data.

CMS is also proposing to modify the immediate measure removal policy across the REH, HOPD and ASC reporting programs. Currently, CMS may immediately remove a measure if the agency believes its continued use would raise safety concerns. The draft rule would modify the policy to allow the agency to suspend, instead of removing, the measure, and then proposed to retain modify or remove it in the next payment cycle, which would increase transparency and allow the public voice in the rulemaking process.

CMS Is also considering changes to the Star Quality rating program and seeks feedback on whether hospitals that perform in the bottom quartile should be eligible for receiving a 5- star rating.

Medicaid:

The rule also proposes to amend Medicaid service regulations to allow reimbursement for services furnished outside of the “four walls” of freestanding IHS/Tribal-run clinics. Federal reimbursement will also be available for services provided by behavioral health clinics in rural areas. The agency is not proposing a definition of “rural” but seeks comments on definitions.

The rule also codifies the requirement for states to provide one year of continuous coverage for children on Medicaid/CHIP. The agency further seeks to remove a failure to pay premiums as an optional exception to continuous eligibility.