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What Other Reimbursement Changes Occurred While I Was Focused on COVID-19?

COVID-19 and the accompanying whirlwind of waivers and rule changes demanded everyone’s attention for most of the year. As we start to catch our breath, it is easy to wonder: What else happened in 2020?

This article provides a brief rundown of some of the changes — unrelated to COVID-19 — that you may have missed while completely engrossed by COVID-19. Stay tuned for the Year-End Polsinelli Reimbursement Institute’s Newsletter for a more comprehensive summary of this year’s annual payment rulemaking cycle.

Comprehensive Care for Joint Replacement Model

Centers for Medicare & Medicaid Services (“CMS”) proposed a three-year extension to the Comprehensive Care for Joint Replacement Model, as well as changes to pricing and the definition of an episode of care. 85 Fed. Reg. 10516 (February 24, 2020).

Radiation Oncology Model

CMS issued a final rule implementing a Radiation Oncology Model. 85 Fed. Reg. 61114 (September 29, 2020). The Radiation Oncology Model will make prospective, bundled, episode-based payments for 16 different cancer types, regardless of the modality or site where the treatment is furnished.

End-Stage Renal Disease (“ERSD”) Treatment Choices Model

Under the ESRD Treatment Choices Model, CMS will select certain clinicians who manage patients and certain facilities to participate in the program. CMS will make two payment adjustments:

  • Increased payments for home dialysis and related services for the first three years to incentivize investment in home dialysis; and

  • Additional adjustments to the prospective payment system pertreatment base rate, based on the participant’s home dialysis rate, transplant waitlist rate, and living donor transplant rate. 85 Fed. Reg. 61114 (September 29, 2020).

Medicare Coverage of Innovative Technologies

In response to an Executive Order issued on October 3, 2019, CMS proposed a new Medicare coverage pathway for breakthrough devices to provide national Medicare coverage on the same day that the device obtains Food and Drug Administration market approval. The coverage would last four years. In this rule, CMS also proposed a definition of “reasonable and necessary” for items and services that may be covered under Part A and Part B of the Medicare program, which would apply to all Medicare items and services, not just breakthrough devices covered by the proposed new coverage pathway. 85 Fed. Reg. 54327 (September 1, 2020).

Rural Hospital Demonstration

In August, CMS announced the Community Health Access and Rural Transformation Model (“CHART Model”), through which the agency would provide a pool of $75 million in upfront funding to 15 rural communities that may apply for up to $5 million in funding to develop local transformation plans. Along with the funding, CMS is providing regulatory and operational flexibility to allow updated service delivery models and changes in how participating hospitals in the communities are paid, moving from a system based on volume to stable, monthly payments. CMS stated that it is looking for 20 rural accountable care organizations (“ACOs”) to participate in the model and would pay shared savings upfront so that the ACOs would have infrastructure funding to be successful in achieving better outcomes.

In the Courts

The courts were kind to CMS this summer, granting CMS victories in three cases involving challenges to recent rule changes:

  • The D.C. Circuit upheld CMS’s reductions in reimbursement for offcampus provider-based departments. Am. Hosp. Ass’n v. Azar, 964 F.3d 1230, 1233–34 (D.C. Cir. 2020)

  • The D.C. Circuit upheld also CMS’s cut to covered drug reimbursement for 340B hospitals. Am. Hosp. Ass’n v. Azar, 967 F.3d 818, 820 (D.C. Cir. 2020).

  • A district court upheld the price transparency rules, which require hospitals to disclose their standard charges. Am. Hosp. Ass’n v. Azar, No. 1:19-CV-03619 (CJN) (D.D.C. June 23, 2020). This case has been appealed to the D.C. Circuit.

© Polsinelli PC, Polsinelli LLP in CaliforniaNational Law Review, Volume X, Number 296



About this Author

Kathleen Snow Sutton Healthcare Attorney Polsinelli

Kathleen Sutton’s practice focuses on an array of health care regulatory and business matters. She has experience representing academic medical centers, hospitals, ambulatory surgery centers, senior living communities, medical groups, and other health care providers, advising on transactional and regulatory matters, including:

  • Strategic planning to achieve business goals while navigating the complex interplay of federal and state laws that affect providers.
  • Developing and reviewing business arrangements and...