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In 2021, ambulatory surgical centers (ASCs) will be able to charge Medicare for total hip replacements and other musculoskeletal and coronary procedures that in the past would be reimbursed only if done in a hospital, according to a with comment period, from the Centers for Medicare & Medicaid Services (CMS).

CMS also said it plans to keep its payment cuts for drugs that hospitals acquire through the following a upholding the policy. Under a plan announced in 2018, CMS began paying 340B hospitals a covered drug's average sales price minus 22%; previously the discount was 6%.

"This policy lowers out-of-pocket drug costs for Medicare beneficiaries by letting them share in the discount that hospitals receive under the 340B program," the agency explained in a

Since CMS's 340B pricing policy took effect, CMS said it has saved Medicare beneficiaries almost $1 billion in drug costs and anticipates an additional $300 million in beneficiary savings in 2021.

With regard to the changes around surgical procedures in the , CMS argued that by eliminating a list of 1,700 inpatient-only procedures over a 3-year period, it is providing Medicare beneficiaries with higher value, lower-cost options for care.

CMS Administrator Seema Verma said in a that the new rule is another sign of the Trump administration's commitment to "level the playing field and boost competition at every turn," and that it "allows doctors and patients to make decisions about the most appropriate site of care, based on what makes the most sense for the course of treatment and the patient without micromanagement from Washington."

On January 1, CMS will add 11 procedures to the covered procedure list (CPL) for ASCs, and overhaul the criteria the agency uses to determine what surgical procedures can be added to that list. Instead of requiring procedures to meet certain criteria, the agency will give physicians leeway to decide whether a particular procedure can be done in an ASC or whether it should be done in an inpatient setting.

CMS also plans to add an additional 267 surgical procedures to the ASCs' covered list.

While removing certain procedures from the inpatient-only list allows ASCs to perform and charge for those services, CMS will continue to reimburse those services when they are done in an inpatient setting if a physician deems that the most appropriate setting.

One procedure that would be cheaper in an outpatient rather than an inpatient environment is thromboendarterectomy, a procedure for eliminating blood clots in the lung, the agency explained in a press release.

Medicare beneficiaries would pay a deductible of about $1,500, if they had not had other significant health expenses. Or the same patient with the same procedure could have a copayment of about $1,150 in an outpatient setting, such as an ASC.

CMS also argued that in the midst of a pandemic the rule gives non-COVID-19 patients another venue to receive needed care.

Hospital Leadership Not Happy

Neither of the Wednesday announcements sat well with hospitals.

Hospitals have long been opposed to shifting more surgical procedures to outpatient settings, and have argued in the past that such policies could have "devastating and life-threatening" consequences for patients.

Hospitals are also miffed about the continued 340B cuts.

"This rule would be bad policy at any time and is especially harmful now, as the public health emergency intensifies and front-line hospitals face unprecedented capacity and cost pressures," said Beth Feldpush, DrPH, senior vice president of Policy and Advocacy for America's Essential Hospitals, in a .

"There is no policy justification for the agency's damaging Part B drug payment cuts to hospitals in the 340B Drug Pricing Program. These cuts flout congressional intent for the 340B program and undermine the savings it was designed to create for hospitals that care for underserved people and communities," Feldpush added.

Feldpush called on CMS to "reverse course on this damaging policy and restore support essential hospitals need to meet their safety-net mission."

Tom Nickels, the American Hospital Association's executive vice president for government relations and public policy, called the rule "a blow to America's hospitals and health systems." He added that for nearly 30 years, "the 340B program has helped hospitals stretch scarce federal resources to reach more patients and provide more comprehensive services to vulnerable communities. Continued cuts will result in the further loss of resources for 340B hospitals at the very worst possible time as COVID-19 cases and hospitalizations continue to climb across the country," he said.

Nickels also said AHA is concerned about CMS' proposed plan to eradicate the inpatient-only list, which was created for the express purpose of protecting beneficiaries.

"Many of the services on the inpatient-only list are surgical procedures that may be complex, complicated, and require the care and coordinated services provided in the inpatient setting of a hospital. We'll be evaluating this proposal carefully."

The AHA is also strongly opposed to provisions in the rule that would "loosen the current restrictions on physician-owned hospitals. The Congressional Budget Office, Medicare Payment Advisory Commission and independent researchers have concluded that physician self-referral to facilities in which they have an ownership stake leads to greater per capita utilization of services and higher costs for the Medicare program."

Physician-owned hospitals also have a tendency to "cherry-pick the most profitable patients, jeopardizing communities' access to full-service care," Nickels said.

Maureen Testoni, president and CEO of 340B Health, a nonprofit organization of approximately 1,400 hospitals and health systems participating in the federal 340B program, also voiced frustration: "These cuts undermine the 340B program's purpose and do nothing to lower overall costs for Medicare patients," she said in a press release. "The result of this years-long regulatory offensive against the health care safety net will be hospitals that struggle harder to care for patients with low incomes during a public health emergency when they are needed the most."

Contributing Writer Cheryl Clark contributed to this story.

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