CMS Issues CY 2025 Final Rule for Medicare Hospital Outpatient Prospective Payment System (HOPPS) and Ambulatory Surgery Center (ASC)

On November 1, 2024, the Centers for Medicare and Medicaid Services (CMS) issued the final rule for the Medicare Hospital Outpatient Prospective Payment System (HOPPS) and Ambulatory Surgery Center (ASC) Prospective Payment System for calendar year (CY) 2025. This final rule covers outpatient hospital and ASC services furnished to beneficiaries on or after January 1, 2025. Highlights are described below: 

For Outpatient Hospital:

  • CMS finalized a Conversion Factor (CF) of $89.179 for hospitals that meet the hospital outpatient quality (OQR) reporting program requirements; and a CF of $ $87.439 for hospitals that do not meet the hospital OQR requirements. 
  • CMS finalized to increase payment rates by 2.9 percent for hospitals that meet the hospital OQR reporting program requirements and a continuation of 2.0 percent reduction in payment for hospitals that do not meet the hospital OQR requirements. 
  • CMS proposed to continue the 5 percent cap wage index reduction. This means the wage index for FY 2025 would not be less than 95 percent of the finalized wage index for the prior year. This would continue for subsequent years where the wage index for a given year would not be less than 95 percent of final wage index for the prior year. On October 3, 2024, an interim final action with comment period (IFC) entitled “Changes to the Fiscal Year 2025 Hospital Inpatient Prospective Payment System (IPPS) Rates Due to Court Decision” (CMS-1808-IFC) was issued. This document outlined changes to the Medicare IPPS wage index values and established a traditional payment exception for low wage hospitals impacted by removal of the low wage index policy and related low wage index budget neutrality factor from standardized amount. After evaluation, CMS finalized their proposal to continue the low wage index policy.
  • CMS finalized their proposal to continue a 7.1% adjustment factor to payments to certain rural sole community hospitals and proposed a budget neutrality factor for the rural adjustment at 1.0000.  
  • CMS finalized their proposal to continue to reimburse drugs and biologicals purchased under the 340B program at the default rate of ASP plus 6 percent; utilizing only the “TB” modifier to identify 340B acquired drugs and biologicals; and  the “TB” modifier descriptor (Drug or biological acquired with 340B drug pricing program discount, reported for informational purposes for select entities) would be changed effective January 1, 2025, to no longer include “…for select entities”, as all entities would report this modifier after this date.   
  • For CY 2025, there are no proposed changes to the Ambulatory Payment Classification (APC) payment policy or packaging policy, including continuation of special payment policy and methodology for the HOPPS complexity-adjusted comprehensive ambulatory payment classifications (C-APCs).  
  • CMS finalized their proposal to continue to use code G0463 in CY 2025 for the standardized code on which to base the relative payment weights, which means a continuation of a payment rate of 40% of the HOPPS rate for all off-campus outpatient departments, excepted and nonexcepted. 
  • CMS received several requests recommending specific services be removed from the Inpatient Only (IPO) list. Based on the established criteria, CMS did not find sufficient evidence to support that these services met the criteria for removal, except for code 22848, which was proposed and finalized to be removed from the IPO list for CY 2025. In addition, CMS finalized their proposal to add 3 services to the IPO list that were newly created by the AMA CPT® Editorial Panel for CY 2025. These new services are described by CPT® codes 0894T, 0895T and 0896T, which will be effective on January 1, 2025.
  • CMS finalized their proposal to change the current completion timeframe for Medicare FFS (Fee for Service) standard pre-authorization requests from 10-business days to 7-business days. This is to align the timeframes across the prior authorization programs and shorten the wait time for beneficiaries to have access to care.

For Ambulatory Surgery Centers (ASCs): 

  • CMS finalized their proposal to increase payment rates by 2.9 percent for hospitals that meet the Ambulatory Surgical Center Quality Reporting (ASCQR) Program and a continuation of a 2.0 percent reduction in payment for ASCs that do not meet the ASCQR program requirements. 
  • CMS finalized the Conversion Factor (CF) of $53.895 for ASCs that meet the ASCQR Program requirements and a CF of $53.828 for hospitals that do not meet the ASCQR Program requirements. 
  • For the complexity adjustment payments, CMS finalized their proposal in CY 2023 to assign each eligible code combination a new C code that describes the primary and add-on code procedures performed. The new C codes would be added to the ASC CPL and when an ASC bills the C code, they will be paid the higher payment rate. For CY 2025, CMS finalized their proposal to continue this special payment policy a methodology.  
  • CMS proposed to maintain the criteria used to review and update the ASC covered procedure list (ASC CPL). Based on their review, they have finalized to add 21 medical and dental procedures for CY 2025.  

The complete HOPPS/ASC proposed rule summary can be found on the GORE Coding Resource Center website under “Education – CMS Rules Updates”: https://gore.rccsclients.com/education/rules-updates/.