CMS Outpatient Payment, MA Plan Design, and 340B Rules: Cost-Cutting Trends

The Centers for Medicare & Medicaid Services (“CMS”) recently released major final and proposed rules affecting a range of providers, Medicare Advantage and Medicare Part D plans, and pharmaceutical companies. We summarize the rules here.

Final Medicare Rules on OPPS and ASC Payment Systems, and Expanded Telehealth Opportunities

These final rules, released for prepublication display on November 1 and 2, reinforce a developing trend away from delivery of care in traditional inpatient care settings. Principal changes in the rules reduce reimbursement for services furnished in those hospital off-campus provider-based departments that until now have escaped reduced rates; expand reimbursement opportunities for ASCs and for telehealth services; and reduce medical record documentation requirements.

Proposed Changes for Medicare Advantage and Part D Plans

This proposed rule, released on October 26, would allow Medicare Advantage plans to cover additional telehealth benefits; would improve coordination of benefits for dual-eligible beneficiaries; would update the Part D Quality Star Ratings program; and would strengthen CMS’s ability to recover payments that it deems to have been improperly made to Medicare Advantage organizations. While targeted directly at Medicare Advantage plans, the rule would have implications for insurers and providers alike, by opening alternatives to traditional in-office visits for aging populations and implementing oversight requirements with respect to program integrity.

Proposed January Rollout of the 340B Program’s Civil Monetary Penalties and Drug Ceiling Price Calculation

This proposed rule, released on November 2, would accelerate implementation of the civil monetary penalty provisions of the 340B Drug Pricing Program, and of the methodology for calculating drug ceiling prices, to January 1. This effectively implements a rule previously finalized in 2017, empowering 340B-covered entities to verify pricing of drugs under the 340B Program, and increasing regulatory scrutiny of drug manufacturers for pricing of covered outpatient drugs.