Physician Fee Schedule and Outpatient Prospective Payment System: COVID-19 Public Health Emergency Flexibilities Changes

by Emily Jones

Vizient Regulatory Affairs and Administration Policy Director

Each year, the Centers for Medicare & Medicaid Services (CMS) publishes regulations to update the Medicare hospital payment rules. After receiving comments, CMS issued final rules in November for updating the Physician Fee Schedule (PFS) and the Outpatient Prospective Payment System (OPPS). Most policies, which are relevant to hospitals, will take effect Jan. 1, 2023.

In both final rules, CMS included various policies related to the COVID-19 Public Health Emergency (PHE), many of which are temporary. Hospitals should continue to look closely at how these evolve and ensure they are planning for the end of the PHE. The CMS roadmap provides guidance for hospitals to navigate the end of the PHE and details the various flexibilities granted and what will be in effect after the PHE. Vizient’s Office of Public Policy and Government Relations is paying close attention to the rulemaking associated with the PHE to help keep providers aware of the latest changes from the administration. Specific information regarding key PHE flexibilities, including expected expiration dates, include:

Virtual health

Under the PHE waivers and flexibilities, telehealth and other virtual health services were made more accessible to accommodate the growing demand and help keep patients in a safe environment to receive care. The Consolidated Appropriations Act of 2022 (CAA 2022) extended several telehealth flexibilities for 151 days after the end of the PHE (e.g., extends the broadened scope of permissible originating sites, expands the list of telehealth practitioners, permits audio-only telehealth and delays certain in-person visit requirements).

PFS: The PFS final rule provides regulations to implement the telehealth changes provided in the CAA 2022, including the 151-day extension of flexibilities (summary available here).

• In addition to the implementation of the CAA 2022 requirements, CMS finalized a policy to permanently add five new services to Category 1 of the telehealth list of permanently reimbursable telehealth services.
• CMS also finalized the addition of 54 new services to the list of temporary, Category 3 telehealth services, which will be covered through the end of CY 2023. Category 3 telehealth services are those that likely have a clinical benefit when furnished through telehealth but lack sufficient data to justify permanent coverage.

Although CMS proposed four new remote therapeutic monitoring (RTM) codes under the PFS, based on public feedback, the agency did not finalize these codes. However, CMS did clarify that any RTM service may be furnished under CMS’s general supervision requirements.

OPPS: The OPPS final rule included several virtual health policies to better align with the PFS and clarifies aspects of billing for telehealth services, such as telehealth mental health services furnished remotely by hospital staff to beneficiaries in their homes (summary available here).

• In response to the growing mental health crisis in the United States and consistent with PFS policy, CMS finalized proposals to permanently cover mental health services provided to beneficiaries in their homes by treating such services as covered outpatient department services and using OPPS-specific coding for these services.
• Like PFS, CMS provides a delay to the in-person visit requirements such mental health services required within 6 months.
• Also consistent with PFS, CMS will allow the use of audio-only technology for these mental health services if the patient is not capable of, or does not wish to use two-way, audio/visual technology.  

COVID-19 vaccines and treatments

During the COVID-19 pandemic, CMS reimbursed for the administration of the COVID-19 vaccine at a higher rate than other preventive vaccines. The agency also developed an add-on payment for administering the vaccine in a beneficiary’s home. In OPPS and PFS, CMS clarified that these policies will continue through the duration of CY 2023, even if the PHE ends before CY 2023.

Regarding payment rates for vaccine administration, CMS finalized a policy to adopt the PFS rates for COVID-19 vaccine administration under the OPPS. CMS will consider whether to implement permanent site-neutral payment rates in future rulemaking.

In PFS, CMS outlined payment for COVID-19 vaccine and monoclonal antibodies, which currently have emergency use authorization (EUA) through CY 2023, as outlined in the below table. At the end of the CY in which the PHE expires, those monoclonal antibodies used for treatment or post-exposure prophylaxis will be treated as biologicals under the applicable payment system. However, monoclonal antibodies used for pre-exposure prevention will continue to be covered under the Part B vaccine benefit, even if the EUA declaration expires, assuming such products have marketing authorization.

Note: This table assumes the EUA declaration continues through CY 2023. In the final rule, CMS also indicates annual updates will be based on the Medicare Economic Index and geographic adjustments will be based on the geographic adjustment factor. Also, CMS provides separate payment policy if the EUA declaration ends on or before Dec. 31, 2022 (see Table 86 of the final rule for more information). Additional information regarding products used for COVID-19 are available from FDA and CMS.

Finalization of certain COVID-19 interim final rules with comment period

In OPPS, CMS also finalized several policies that were initially issued as interim final rules in response to the COVID-19 PHE. For example, CMS clarifies that after the PHE, a hospital may not count a resident for purposes of Medicare direct graduate medical education (DGME) payments or indirect medical education (IME) payments if the resident is performing activities within the scope of the approved residency program in their own home, or a patient’s home. Also, while CMS acknowledges stakeholder comments to extend the Hospital Without Walls (HWW) policy, the agency clarified that it lacks the authority to continue the HWW beyond the conclusion of the PHE. Additionally, the agency notes several changes related to telehealth that may help maintain patient access to certain services provided in the home after the PHE.

Hospitals and other industry stakeholders should be aware of the PFS and OPPS final rules as CY 2023 rapidly approaches and when planning for the end of the PHE. The final rules include other notable policy changes directly impacting hospitals, such as changes related to 340B reimbursement in OPPS, as well as substantial changes to the Medicare Shared Savings Program in PFS, which were not highlighted in this blog. If you have any questions or concerns, don’t hesitate to reach out to Vizient’s Office of Public Policy and Government Relations.