Proposed Rules are a Mixed Bag but Take Important Steps to Bolster Primary Care 

Over the past week, Medicare Rights has submitted comments in response to two proposed rules from the Centers for Medicare & Medicaid Services (CMS): the Outpatient Prospective Payment System (OPPS) and the Physician Fee Schedule (PFS). These rules come out annually and are very technical documents dealing with how physicians, hospitals, and other providers get paid. But payment policies often drive incentives and beneficiary access to affordable care. 

The OPPS 

With the OPPS, CMS establishes payment rates for hospital outpatient departments and ambulatory surgical centers. Two items in the proposed rule could have lasting implications for beneficiaries. 

Need for Nursing Facility Care Complicates Elimination of Inpatient Only (IPO) List 

The decision to treat a patient as an inpatient versus an outpatient can be very complex. One aspect of that decision is whether insurance requires some procedures to be provided in one setting over another. Currently, the Medicare IPO list requires a set of over a thousand procedures to be provided only to inpatients. Over time, the procedures on the list have changed slightly, but in the proposed rule, CMS lays out plans to eliminate the IPO entirely. 

Historically, the IPO has been contentious, with some arguing that it is outdated and keeps providers from using their medical judgment, while others point to safety concerns, provider burden, and confusion when procedures are removed from the list.

While Medicare Rights is generally supportive of allowing trained medical professionals to use their judgment, we opposed a wholesale elimination of the IPO list in our comments. Instead, we urged caution and a case-by-case removal of procedures. We also flagged the risk of people losing access to necessary post-surgical care because coverage for Skilled Nursing Facility care and some home health care is dependent on a prior three-day inpatient stay. 

A Move Toward Greater Site Neutrality 

What a person pays for care often varies wildly, depending on their location, and sometimes this difference is not apparent to patients. That can lead to unexpectedly high medical bills and Medicare overspending. Site-neutral payment would end this practice. 

In the OPPS, CMS proposes to create a more level playing field between hospital outpatient departments and freestanding physician offices by lowering payments for drug administration services at some outpatient departments that are not part of a hospital campus. We support this important step toward greater site neutrality.  

The PFS 

The PFS is an annual update to the amount Medicare pays physicians and other practitioners for services for people with Original Medicare. This rule often contains important policy changes, and this year is no exception. CMS proposes to do more to bolster primary and behavioral health care through payment adjustments and also seeks information on how to better support prevention and management, including self-management, of chronic disease. We urged the administration to acknowledge and support access to programs like Medicaid and the Supplemental Nutrition Assistance Program (SNAP), and entities like the Administration for Community Living (ACL). These programs and agencies are under fire, facing drastic cuts that will harm people’s ability to get care and food. 

Payment Changes May Boost Primary Care and Behavioral Health 

Similar to the site neutrality component of the OPPS discussed above, the PFS can also result in Medicare overpaying for services delivered in facility settings, incentivizing consolidation. CMS proposes to trim overhead payments in facility settings like outpatient departments to stop this shift toward a more expensive setting. 

CMS also proposes to trim certain types of codes that may be overpaid due to distortions from outdated data. We supported both of these payment changes. 

A Mixed Bag 

In our comments, we applauded CMS’s efforts to clarify and implement medically necessary dental coverage over the past several years. Unfortunately, this year’s rule does not extend medically necessary dental services to include important conditions like diabetes, sickle cell anemia, or autoimmune disorders.  

The rule also engages in unnecessary wordplay by continuing to chip away at important language around equity and social determinants of health, while often attempting to capture the same concepts with other, less understood terms like “upstream drivers.”  

Going Forward 

At Medicare Rights, we will continue to support good payment policies and administrative changes that will help older adults and people with disabilities get the care and supports they need. We will also speak up about threats, including areas where the Trump administration has harmed programs or impeded progress toward greater equity in our health system. 

Read the OPPS and PFS proposed rules. 

Read our comments on the OPPS and the PFS. 

Read more about site neutrality.