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Statement on the CY 2023 Medicare Outpatient and Physician Fee Schedule Final Rules

By Soumi Saha, Senior Vice President of Government Affairs, Premier

Outpatient Prospective Payment System (OPPS) Rule

Payment Update

While we appreciate CMS reevaluating its proposed market basket calculations and adjusting the outpatient payment rate upward, as it did with the inpatient rate, the truth remains that a 3.8 percent payment update falls woefully short of reflecting the rising labor costs that hospitals have experienced since the pandemic’s onset. Our healthcare providers deserve adequate payment that reflects both the current environment and their heroic actions throughout the course of the pandemic – we must make our providers whole.

340B Discount Drug Program Payment Cuts

Premier is pleased that CMS has taken steps to reverse 340B payment cuts in 2022 and that it is finalizing a return to ASP+6 percent in CY 2023. Following Premier’s recommendations, we also applaud CMS for recognizing that any statutory adjustments applied to OPPS payments in reversing these cuts mirror the adjustments CMS made when originally implementing the policy – ensuring hospitals were not further penalized by this unlawful policy.

Premier also appreciates CMS finalizing our recommendation that it address remedies for 340B drug payments from 2018-2022 through rulemaking—ahead of the CY 2024 OPPS proposed rule. Expeditiously arriving at a remedy to transparently address past reimbursement shortfalls is essential to support hospital and patient access to high-quality pharmaceuticals.

Payment Adjustments for Additional Costs of Domestic NIOSH-Approved Surgical N95 Respirators

Premier is pleased to see CMS finalizing an adjustment to inpatient and outpatient Medicare payments to compensate hospitals for the costs of domestically produced N95s. We are encouraged that the policy aligns with Premier’s recommendations to be mindful of provider burden. We are disappointed that CMS did not commit to work with Congress to implement the OPPS adjustment in a non-budget neutral manner. Premier will continue to press for a non-budget neutral policy, which would more readily permit CMS to broaden this policy to other domestically manufactured critical medical supplies and drugs.

Physician Fee Schedule Rule

Premier applauds CMS for finalizing reforms to certain aspects of the Medicare Shared Savings Program (MSSP) that incentivize provider participation. As Premier has long advocated, we must ensure that providers in accountable care organizations (ACOs) have an adequate budget, and that we create incentives for rural and other vulnerable providers to move to value.

We remain disappointed, however, that CMS is continuing to distinguish between low- and high-revenue for ACOs, especially in light of a Premier analysis demonstrating the differences between ACOs have more to do with cherry picking locations and attribution methodology than with real performance. Meanwhile, this flawed policy is limiting the capacity of ACOs with hospital participants to earn shared savings within the MSSP. In turn, this has driven some hospital ACOs to re-evaluate participation in the program, undermining the objective of ACOs, which is to coordinate care across all providers to improve care. Premier will continue to work with CMS to address this issue and urges Congress to pass the Value in Health Care Act (H.R. 4587) to eliminate this policy and make other critical improvements to the MSSP.

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