CMS Proposes Medicare Payment Rates for Hospital Outpatient and ASC Services

On July 10, 2024, the Centers for Medicare & Medicaid Services (CMS) proposed Medicare payment rates for hospital outpatient and Ambulatory Surgical Center (ASC) services. The Calendar Year (CY) 2025 Hospital Outpatient Prospective Payment System (OPPS) and ASC Payment System Proposed Rule is published annually and will have a 60-day comment period, which will end on September 9, 2024. The final rule will be issued in early November. 

In addition to proposing payment rates, this year’s rule includes proposed policies that align with several key goals of the Administration, including addressing health disparities, expanding access to behavioral healthcare, improving transparency in the health system, and promoting safe, effective, and patient-centered care. The proposed rule advances the Agency’s commitment to strengthening Medicare and uses the lessons learned from the COVID-19 PHE to inform the approach to quality measurement, focusing on changes that would help address health inequities. 

These proposed payment policies would affect approximately 3,500 hospitals and approximately 6,100 ASCs. As with other rules, CMS is publishing this proposed rule to meet the legal requirements to update Medicare payment policies for OPPS hospitals and ASCs annually.

A fact sheet discusses the major provisions of the proposed rule (CMS-1809-P), which can be downloaded at: https://www.federalregister.gov/documents/current.

CMS proposes updating OPPS payment rates for hospitals that meet applicable quality reporting requirements by 2.6%. This update is based on the projected hospital market basket percentage increase of 3.0%, reduced by a 0.4 percentage point productivity adjustment.

In the CY 2019 OPPS/ASC final rule with comment period, CMS finalized a proposal to apply the productivity-adjusted hospital market basket update to ASC payment system rates for an interim period of five years (CY 2019 through CY 2023). The CY 2024 OPPS/ASC final rule with comment period extended the interim period for an additional two years, that is, through CY 2024 and CY 2025. Accordingly, using the hospital market basket update, CMS proposes an update factor to the ASC rates for CY 2025 of 2.6%. The update applies to ASCs meeting relevant quality reporting requirements. This update is based on the proposed IPPS market basket percentage increase of 3.0%, reduced by 0.4 percentage point for the productivity adjustment.