OPPS Prior Authorization Rules Go Into Effect July 1: Are You Ready?

By Colleen O. Hall, CPC, CPMA, CIRCC; Caroline Meyer; and Madeleine Sanderson
| 6/2/2020
OPPS Prior Authorization Rules Go Into Effect July 1: Are You Ready?
The final 2020 outpatient prospective payment system (OPPS) and ambulatory surgical center (ASC) payment system rules from the Centers for Medicare & Medicaid Services (CMS) went into effect on Jan. 1, 2020. These rules, which outline changes to amounts and factors CMS uses when determining payment rates for Medicare services, have significant financial implications for healthcare providers. While the majority of changes already went into effect at the beginning of the year, healthcare leaders will want to make sure that, starting July 1, they are submitting a prior authorization request for any service on the CMS list of outpatient department services requiring prior authorization.
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Following are a breakdown of those services and a review of strategies for preparing for implementation.

Which services will require prior authorization?

Services on the list of outpatient department services requiring prior authorization typically are those that CMS has identified as being performed mainly for cosmetic purposes and that therefore might pose a potential risk for incorrect payment based on medical necessity concerns. The five service categories1 are:

  1. Blepharoplasty and related services
    Services in this category include removal of excessive eyelid skin, brow and eyelid paralysis correction, and more.
  2. Botulinum toxin (Botox) injection
    Services in this category include chemical injections to destroy facial and neck nerve muscles.
  3. Panniculectomy and related services
    Included services in this category relate to excision of excessive skin and subcutaneous tissue (including lipectomy) and suction-assisted removal of fat.
  4. Rhinoplasty and related services
    Services in this category include nasal and cheekbone graft, repair, and reshaping.
  5. Vein ablation and related services
    Services in this category include destruction of insufficient veins of the arm or leg using various methods.

Snapshot: Some key changes in the 2020 OPPS final rule2

  • An estimated 1.3% payment rate increase for services provided by outpatient departments
  • Removal of 12 procedures from the CMS inpatient-only list
  • Addition of five devices eligible for pass-through status
  • A change to the minimum required level of supervision for all hospital outpatient therapeutic services from direct supervision by a physician to general supervision
  • A 60% reduction to payments for evaluation and management services provided in exempted hospital outpatient departments, as described by code G0463
  • Addition of 20 items to the list of surgical procedures covered when performed in an ASC
  • A total of 394 CPT code changes

Preparing for implementation

To ready themselves for implementation of the new prior authorization rule, healthcare leaders should:

  • Understand which facilities and services are affected. The new requirement affects only hospital outpatient departments and, more specifically, the five service categories previously listed. It does not apply to ASCs.
  • Prepare to comply with the rule by putting necessary workflows in place. This should help determine who within the organization is responsible for each step in the prior authorization process. Then, establish procedures to make sure each step within the process is completed efficiently and comprehensively.
  • Develop a systemwide monitoring mechanism to track these changes. Creation of such a tool can help ensure that change management is realized appropriately, which also might encourage compliance.

Thoroughly understanding this and the other OPPS rules that went into effect in January – and related implications for their organizations – are musts for healthcare leaders. For additional guidance, leaders should seek assistance from third-party specialists.

1 “Final Rule: CMS-1717-FC: Prior Authorization Process and Requirements for Certain Hospital Outpatient Department (OPD) Services; Table 65: Final List of Outpatient Services That Require Prior Authorization,” Centers for Medicare & Medicaid Services, Federal Register, Vol. 84, No. 218, Nov. 12, 2019, https://www.cms.gov/files/document/cpi-opps-pa-list-services.pdf

2 “CY 2020 OPPS/ASC Final Rule Executive Summary,” Healthcare Financial Management Association, Jan. 8, 2020, https://www.hfma.org/industry-initiatives/regulatory-and-accounting-resources/fact-sheets/cy2020-opps-asc-final-rule-executive-summary.html; "Medicare Program: Changes to Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; Revisions of Organ Procurement Organizations Conditions of Coverage; Prior Authorization Process and Requirements for Certain Covered Outpatient Department Services; Potential Changes to the Laboratory Date of Service Policy; Changes to Grandfathered Children’s Hospitals-Within-Hospitals; Notice of Closure of Two Teaching Hospitals and Opportunity to Apply for Available Slots," Centers for Medicare & Medicaid Services, Federal Register, Vol. 84, No. 218, Nov. 12, 2019, https://www.federalregister.gov/documents/2019/11/12/2019-24138/medicare-program-changes-to-hospital-outpatient-prospective-payment-and-ambulatory-surgical-center; “AMA Releases 2020 CPT Code Set,” American Medical Association, Sept. 4, 2019, https://www.ama-assn.org/press-center/press-releases/ama-releases-2020-cpt-code-set

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Colleen O. Hall
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Caroline Meyer
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Madeleine Sanderson