CMS recently released a 761-page sweeping rule that proposes changes to the Medicare hospital outpatient prospective payment system (OPPS) and ambulatory surgical center (ASC) payment system for CY2019. The rule proposes:
- Increasing cuts to the 340B Drug Discount Program;
- Removing communication about pain questions from the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey;
- Reducing the amount hospitals are paid to be more in alignment with the lower physician reimbursement rate to promote site neutrality, and;
- Removing certain reporting requirements
Although the rule touches on a variety of topics, one area I’d like to focus on are the proposed changes to packaged items and services to incentivize the use of non-opioid medications for pain management at ASCs.
Packaging refers to the coupling of payment for a variety of related items to encourage hospitals to efficiently manage their resources. In addition, it also “encourages hospitals to effectively negotiate with manufacturers and suppliers to reduce the purchase price of items and services or to explore alternative group purchasing arrangements” as CMS notes in the proposed rule. Packaging has been part of the OPPS since CMS first implemented a prospective payment system in 2000.
So where does the incentivization of non-opioid management treatments come into play?
Well, under current payment rules, CMS provides one bundled payment to hospitals for all surgical supplies including drugs intended for pain management. Under this payment structure, hospitals and ambulatory surgical centers receive the same amount, whether the surgeon administers an opioid or a non-opioid. Given the ongoing opioid epidemic, CMS felt cause to examine if their payment policy may in fact encourage the use of opioids. Under the OPPS, they didn’t find any concrete evidence to support this, but, this was not the case for ASCs.
Why is that you ask? Well to be frank, ASCs aren’t necessarily receiving high payments to begin with. In the proposed rule CMS describes ASCs as only being paid roughly 55 percent of the OPPS rate. As a result, ASCs are a lot more cost sensitive. This is important because opioids are cheap. If I’m an ASC and I’m already receiving less money, am I really going to pay more for a non-opioid treatment for postsurgical pain? Probably not.
To mitigate this, CMS has proposed to unpackage non-opioid pain management drugs as part of surgical supplies when rendered in ASCs in CY 2019. The only packaged non-opioid drug under the OPPS and ASC payment system is Exparel which was initially approved by FDA in 2011 for local administration post-surgery. CMS is seeking comment on if there are other effective non-opioid pain management treatments that potentially need separate payment.
Comments on the proposed rule are due September 24.