The CMS finalized a new Medicare provider designation for rural hospitals in its final Outpatient Prospective Payment System rule out Tuesday, despite uncertainty over how many facilities will apply.
The rural emergency hospital designation will be implemented in January, allowing rural and critical access hospitals to receive a 5% payment increase for their services, provided they meet conditions of participation. They will also get a monthly facility payment.
The conditions include maintaining an average length of stay of no more than 24 hours and having emergency care available 24 hours a day, seven days a week.
The CMS also finalized a requirement some stakeholders pushed back on: Skilled nursing beds must be in a separate unit.
The new provider type is meant to bump payments to rural facilities to keep them from closing, which can result in severely limited access to care in their communities. Hospitals that receive the new designation cannot provide acute inpatient care, but are expected to provide emergency and observation care, as well as potentially some outpatient services.
Earlier research has suggested that nearly 70 hospitals are likely to apply for the new designation, with many of them in Kansas, Texas, Nebraska and Oklahoma. However, many facilities are put off by the requirement they cease inpatient services and said they were unlikely to apply, Politico reported in October.
Also in the final rule, hospital outpatient providers will get a 3.8% payment bump for 2023, up from the 2.7% increase the agency proposed in July. That amounts to a hike of about $6.5 billion compared to this year, according to the CMS.
The American Hospital Association, however, said the rate is “still insufficient given the extraordinary cost pressures hospitals face from labor, supplies, equipment, drugs and other expenses.”
The payment rule also restores rates for medicines acquired by the 340B drug payment program to the average sales price plus 6% for outpatient drugs. For 2018, the CMS said it was dropping payments for 340B drugs to ASP minus 22.5%. Hospitals pushed back and sued the HHS, winning the case before the U.S. Supreme Court in June.
The CMS said it is still determining how to remedy the lower payments received from 2018 to 2022.
The 2023 OPPS makes permanent the possibility for providers to offer remote behavioral services, which is currently allowed during the COVID-19 public health emergency. Patients will, however, have to meet in person within 12 months to receive ongoing treatment.
The CMS will also allow audio-only services when the beneficiary does not have access to or declines to use two-way audio and visual technology.
The final rule also includes a provision that helps offset costs that providers incur while buying domestically produced N-95 respirators