A Look at the Outpatient Prospective Payment System (OPPS) 2024 Final Rule

Article Summary

The Centers for Medicare & Medicaid Services (CMS) announced the finalized Medicare payment rates for Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) services for calendar year (CY) 2024.

This year’s regulation encompasses directives that align with several CMS objectives, such as advocating for health equity, broadening access to behavioral healthcare, enhancing transparency in the health system, and ensuring secure, efficient, and patient-focused care.

Healthcare facilities and hospitals must adapt their billing procedures to adhere to the new regulations. However, numerous organizations encounter challenges due to limited resources and technical deficiencies while preparing for the changes in 2024.

Although it is a demanding period for the healthcare sector, organizations can effectively navigate these changes with appropriate assistance and guidance.

OPPS CY 2024 final rule

Editor’s note: This article is informed by the webinar titled “What’s Next for the OPPS: A Look at the 2024 Final Rule,” presented by Jennifer Bishop, RHIT, CCS, CCS-P, CHRI, Vice President of Product Content, Vitalware, at Health Catalyst.

The Centers for Medicare & Medicaid Services (CMS) annually issues the Outpatient Prospective Payment System (OPPS) Final Rule. This final rule for calendar year (CY) 2024 details significant policy changes and reimbursement updates affecting approximately 3,500 hospitals and about 6,000 ambulatory surgical centers (ASCs).

In this final rule, CMS is projecting a 3.1 percent increase in payment rates for items and services under OPPS. This represents a slight rise from the initial projected 2.8 percent increase.

Reimbursement changes in the OPPS final rule directly impact the amount hospitals and facilities will be reimbursed for outpatient services rendered to Medicare beneficiaries. Understanding these changes helps healthcare provider organizations adapt their financial strategies, budgeting, and operational planning to ensure optimal financial performance and quality outcomes.

These changes are set to take effect on January 1, 2024. Along with establishing payment rates, this year’s rule also includes enhancements to promote health equity, expand access to behavioral healthcare, increase transparency in the health system, and encourage safe, effective, and patient-centered care.

OPPS Changes Hospitals Should Know

CMS summarizes pertinent information and additional details for healthcare facilities in a fact sheet discussing the significant provisions of the final rule (CMS-1786-FC). Some notable changes in the final rule include:

OPPS and ASC Payment for Dental Services. For CY 2024, CMS is finalizing Medicare payment rates under the OPPS for over 240 dental codes to align with the dental payment provisions in the CY 2023 Physician Fee Schedule final rule by assigning them to clinical Ambulatory Payment Classifications (APCs).

The revised CMS regulations are expanding dental services. CMS will guarantee coverage for dental procedures closely linked to other covered services, namely organ transplant, cardiac valve replacement, valvuloplasty, or head and neck cancer treatment. Any dental services accompanying these procedures will be automatically covered.

If other necessary dental procedures do not meet these criteria, hospitals can submit them for consideration for Medicare coverage, but such coverage is not granted automatically. Currently, 241 Current Dental Terminology (CDT) codes for dental services are assigned to an APC for CY 2024.

Additionally, CMS clarified that the Healthcare Common Procedure Coding System (HCPCS) code G0330 (facility services for dental rehabilitation) should only be used if no specific dental code is available to describe the services provided.

CMS expects hospitals to use this code sparingly and that its use will decline over time as CMS adds more dental codes to the list of payable services. However, to use this code with Medicare, the patient must be a Medicare beneficiary receiving one of the services as mentioned above, meet specific eligibility requirements, and receive a service that does not already have a payable dental code assigned.

Intensive Outpatient Program (IOP) Addresses Coverage Gap.  In the CY 2024 OPPS/ASC final rule with comment period, CMS finalized policies designed to close the coverage gap for behavioral health by establishing payment for IOP services under Medicare. IOP services will now be covered when performed in a hospital outpatient department or a community mental health center (CMHC) at a weekly rate equivalent to the partial hospitalization programs (PHP) rate. Notably, this permanent benefit, as of January 1, 2024, will include “Opioid Treatment Program (OTP) intensive outpatient services” as a new covered Part B benefit under opioid use disorder treatment services.

Revisions to Partial Hospitalization Program (PHP) Physician Certification Requirements. Medicare will continue covering PHP services, an “intensive, structured outpatient program” provided as an alternative to inpatient hospitalization. However, there are changes to the physician certification requirements, including:

  • A physician must certify that each patient needs at least 20 hours of PHP services per week.
  • Initial physician recertification must occur after 18 days, with subsequent recertifications no less frequently than every 30 days.
  • No changes to the physician’s requirement to certify that the patient would require inpatient psychiatric services if PHP were not offered.

Medicare also reiterated that treatment of substance use disorders is covered and being added to eligibility criteria.

OPPS Payment Continues for Remote Services. Hospital staff may continue to provide remote mental health services and other remote outpatient therapies, including physical therapy, occupational therapy, speech-language pathology services, diabetes self-management training, and medical nutrition therapy.

CMS is finalizing technical changes to reflect additional information from interested parties regarding how these services are furnished, including creating a new untimed code describing group psychotherapy to reduce administrative burden and increase access to group psychotherapy.

Remote services will continue to be reimbursed for Medicare beneficiaries through the end of 2024 using modifier 95 to identify services provided via telehealth. Remote mental health services may be provided to patients located at home by state-licensed providers.

Website Requirements under Hospital Price Transparency Ruling. Finally, changes are coming for January 1, 2024, requiring hospitals to modify their public website’s home page to include a .txt file in the root folder with a standardized set of fields, including:

  • Hospital location name(s) that correspond to the Machine-Readable File (MRF).
  • Source page URL that hosts the MRF.
  • A direct link to the MRF URL.
  • Hospital Point of Contact Information.

What’s more, the public website must include a footer that is labeled “Price Transparency.” The footer must be on the hospital’s homepage and link directly to the publicly available webpage hosting the MRF.

How to Prepare for OPPS Policy Changes

As hospitals and health systems face continual industry shifts in billing, coding, quality standards, and price transparency guidelines, it’s increasingly crucial for them to choose a partner who can help navigate these challenges and make necessary clinical, operational, and financial adjustments.

Organizations must uphold coding, billing, and reimbursement changes to ensure timely and accurate payments for outpatient services. Meanwhile, health systems administrators are increasingly concerned about managing revenue cycle challenges, particularly considering the upcoming OPPS payment updates in 2024.

However, healthcare facilities and health system leaders can overcome these challenges and adapt to new regulations using mid-revenue cycle management tools like Vitalware by Health Catalyst®.

This suite of solutions and expertise provides a robust knowledge base of codes and crosswalks in addition to regulatory coding and billing guidance, enabling healthcare providers to submit claims and reduce denials confidently.

Streamlining Access to Reports and Industry Data, Codes Under OPPS

To that end, Vitalware users can download facility reports and industry data through the application. This includes updates on Current Procedural Terminology (CPT®) and Healthcare Common Procedure Coding System (HCPCS) codes, a crosswalk to new biosimilar drugs, Ambulatory Payment Classification (APC) grouping changes, and new technology add-on payment (NTAP) criteria. Users can quickly identify new codes, view deleted codes with suggested replacements, and access status indicators or reimbursement changes for existing codes.

Indeed, leading health systems leverage Vitalware mid-cycle revenue solutions to collate and coordinate all chargemaster data in an integrated framework. These applications empower organizations to operate more transparently, price strategically, and oversee a compliant and efficient financial operation. The most pertinent solutions are as follows:

  • VitalIntegrity detects and remedies compliance issues immediately and identifies the root cause of revenue leakage from missed or inaccurate charges.
  • VitalCDM organizes, displays, and manages all chargemaster data within one connected solution to enable hospital billing departments to present an accurate bill or claim consistently. The tool is proven to create precise reimbursement, increase operational efficiency, and minimize compliance risk.
  • VitalKnowledge® provides compliance, revenue, and coding teams with comprehensive, current medical coding information that is readily accessible to any hospital personnel who need access to current coding, billing, and regulatory information.
  • Hospital Price Index (HPI) is designed to assist hospitals in meeting the requirements for price transparency regulations. This mandate has already been implemented, but federal regulators have broadened and updated criteria since it took effect on January 1, 2021. There is potential for severe penalties for non-compliance. The inclusion of shoppable items in the price transparency requirements necessitates that hospitals and suppliers publicly disclose chargemaster data, shoppable services, and all services. The HPI offers a comprehensive view of all three categories, including the necessary “standard charges.”

Disclaimer: This webinar/presentation was current at the time it was published or provided via the web and is designed to provide accurate and authoritative information regarding the subject matter covered. The information provided is only intended to be a general overview with the understanding that neither the presenter nor the event sponsor is engaged in rendering specific coding advice. It is not intended to take the place of either the written policies or regulations. We encourage participants and readers to review the specific regulations and other interpretive materials as necessary.

Additional Reading

Would you like to learn more about this topic? Here are some articles we suggest:

Hospital Price Transparency: Five Changes You Should Know

Hospitals Chargemaster Basics: What It Is, How It Works, and Why It’s So Important

Predicting Denials to Improve the Healthcare Revenue Cycle and Maximize Operating Margins

What is IT Managed Services in Healthcare?

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