New 2025 Hospital Outpatient, ASC Payments, Requirements Finalized

The Centers for Medicare & Medicaid Services (CMS) released its final hospital outpatient prospective payment system (OPPS) and ambulatory surgical centers (ASC) rule for calendar year (CY) 2025. Access the full final rule on the Federal Register.

Payment updates 

For CY 2025, CMS finalizes an increase to the outpatient department fee schedule factor of 2.9%. This increase factor includes a 3.4% market basket update minus a productivity adjustment of 0.5%. 

CMS estimates total payments to OPPS providers (including beneficiary cost sharing and estimated changes in enrollment, utilization, and case mix) for CY 2025 would be approximately $87.7 billion, an increase of approximately $4.7 billion compared to estimated CY 2024 OPPS payments.

Using a conversion factor of $89.169 in the calculation of the national unadjusted payment rate, plus other required adjustments — wage index budget neutrality adjustment of 1.0026, cancer hospital payment adjustment of 1.0005, the 5% annual cap for hospital wage index reductions adjustment of 0.9927, adjustment of 0.10% for the difference in pass-through spending — results in a conversion factor for CY 2025 of $89.379.

Wage index changes

CMS finalizes adopting the Office of Management and Budget’s new core-based statistical area delineations (CBSA). CMS notes these updates reflect changes to rural or urban status for existing counties, as well as addition or removal of certain individual CBSAs compared to the previous delineations. CMS indicates any policies and adjustments finalized for the FY 2025 inpatient prospective payment system post-reclassified wage index are reflected in the final CY 2025 OPPS wage index beginning on January 1, 2025. 

Sole community hospitals

For CY 2025, CMS will continue the current payment policy adjustment of 7.1% for rural sole community hospitals for all services and procedures paid under the OPPS, excluding separately payable drugs and biologicals, brachytherapy sources, items paid at charges reduced to costs, and devices paid under the pass-through payment policy. 

Device pass-through status

CMS indicates it received 14 complete applications for device pass-through status for CY 2025. Ten applications were through the breakthrough device designation and received approval. Four were via traditional pathway and were not approved.

Inpatient only list (IPO)

CMS adds three newly created codes for liver allograft services to the IPO list for CY 20205. They remove one code (22848) from the IPO list. 

Virtual direct supervision

CMS finalizes extending through December 31, 2025, virtual direct supervision of cardiac rehabilitation among several other services.  

Diagnostic radiopharmaceuticals

CMS will separately pay for diagnostic radiopharmaceuticals with per day costs above a threshold of $630. That threshold is approximately two times the volume weighted average cost amount currently associated with diagnostic radiopharmaceuticals. Any diagnostic radiopharmaceutical with a per day cost at or below that threshold will continue to be policy packaged under the current policy.

CMS finalizes relying on the CY 2023 mean unit cost data derived from hospital claims data for payment rates for diagnostic radiopharmaceuticals for CY 2025 and will update the $630 threshold in CY 2026 and subsequent years by the producer price index for pharmaceutical preparations. 

Add-on payment for radiopharmaceutical technetium-99m (Tc-99m)

For CY 2025, an add-on payment will apply for radiopharmaceuticals using Tc-99m produced with highly enriched uranium. For 2026, CMS replaces this add-on payment with one for radiopharmaceuticals using Tc-99m derived from domestically produced molybdenum-99 (Mo-99). To address foreign-domestic payment inequity, CMS is finalizes an add-on payment of $10 per dose for radiopharmaceuticals using Tc-99m derived from domestically produced Mo-99.

Partial hospitalization program (PHP), intensive outpatient programs (IOP)

For PHPs and IOPs, CMS finalizes continuing their rate structure and updating it using the CY 2023 claims data and the latest available cost information from cost reports from the prior three fiscal years.

Indian health services (IHS), tribal clinics

CMS amends the Medicaid clinic services regulation to authorize federal reimbursement for services furnished outside the “four walls” of a freestanding clinic by IHS/tribal clinics. In addition, at state option, federal reimbursement would also be available for services provided by behavioral health clinics and services provided by clinics located in rural areas via the same “four walls” policy. 

CMS also finalizes starting January 1, 2025, to separately pay IHS and tribal hospitals for high-cost drugs furnished in hospital outpatient departments through an add-on payment in addition to the all-inclusive rate (AIR). CMS indicates the add-on payment would not affect the calculation of the annual AIR payment amount. 

Colorectal cancer screening coverage

CMS finalizes removing coverage for the barium enema procedure and adding coverage for the computed tomography colonography procedure. 

HIV PrEP payment

For CY 2025, CMS finalizes paying for HIV PrEP drugs and related services as additional preventive services under the OPPS. These drugs are currently covered under Part D, though with cost-sharing and deductibles. 

CMS will generally use a site neural payment for the listed codes in OPD compared to when furnished in physician offices.

Non-opioid pain treatments

CMS finalizes six drugs and five devices that qualify as non-opioid treatments for pain relief and be paid separately in both the OPD and ASC settings starting in CY 2025. See Tables 157-158 in final rule. 

Revision of term “custody” for penal authorities

CMS narrows the definition of “custody” so it no longer includes individuals who are on parole, probation, and home detention. This removes the presumption Medicare is prohibited from paying for health care items or services furnished to individuals on parole, probation, or home detention. 

Prior authorization 

For 2025, CMS is changing the review timeframe for prior authorization requests for certain OPD services from 10 business days to seven calendar days for standard reviews.

Conditions of participation (CoPs): obstetrics, emergency services

Based on ongoing concerns with maternity care, CMS finalizes a new obstetrics (OB) services CoP for hospitals, including critical access, related to requirements for the organization, staffing, and OB services and staff training. These include requirements for: 

• Organization and integration of obstetrical services within the hospital, including baseline standards for the organization
• Maternal quality assessment and performance improvement program, 
• Staffing and delivery of care within obstetrical units
• Staff training annually using evidence-based best practices 

CMS also finalizes a new standard entitled “emergency services readiness” within the existing emergency services CoP for patients — including pregnant, birthing, and postpartum women — for hospitals and critical access hospitals (CAHs) providing emergency services, regardless of whether they provide OB services. 

In addition, the hospital discharge planning CoP doesn’t currently include baseline requirements related to patient transfers. CMS finalizes revisions to the discharge planning CoP for all hospitals and CAHs related to transfer protocols. This would require hospitals have written policies and procedures for transferring patients under their care, inclusive of hospital inpatients (for example, transfers from the emergency department to inpatient admission, transfers between inpatient units in the same hospital, as well as transfers between inpatient units at different hospitals).

CMS agrees with commenters and will phase in the changes over a two-year timeframe. See Table 174 for details. 

Quality programs

CMS finalizes cross-cutting program in three programs: the Hospital Outpatient Quality Reporting (OQR), Rural Emergency Hospital Quality Reporting (REHQR), and Ambulatory Surgical Center Quality Reporting (ASCQR) Programs. CMS requires the following for all: 

• Adopt the Hospital Commitment to Health Equity measure in the Hospital OQR and REHQR Programs and the Facility Commitment to Health Equity (FCHE) measure in the ASCQR Program beginning with the CY 2025 reporting period/CY 2027 payment or program determination 
• Adopt the Screening for Social Drivers of Health (SDOH) measure in all three programs beginning with voluntary reporting for the CY 2025 reporting period followed by mandatory reporting beginning with the CY 2026 reporting period/CY 2028 payment or program determination 
• Adopt the Screen Positive Rate for SDOH measure in all three programs beginning with voluntary reporting for the CY 2025 reporting period followed by mandatory reporting beginning with the CY 2026 reporting period/CY 2028 payment or program determination

Outpatient quality program (OQP)

In addition to the above cross-cutting measures, CMS finalizes the OQP adopt the patient understanding of key information related to recovery after a facility-based outpatient procedures or surgery for the CY 2026 voluntary reporting period with mandatory reporting beginning in CY 2027. 

CMS finalizes removing from the OQP the MRI lumbar spine for low-back pain measure and the cardiac imaging for preoperative risk assessment for non-cardiac, low-risk surgery measure with the CY 2025 reporting period/CY 2027 payment determination. CMS will also remove the Cardiac Imaging for Preoperative Risk Assessment for Non-Cardiac, Low-Risk Surgery measure beginning with the CY 2025 reporting period/CY 2027 payment determination. 

Finally, CMS requires electronic health record (EHR) technology be certified to all electronic clinical quality measures available to report beginning with the CY 2025 reporting period/CY 2027 payment determination. 

Ambulatory surgical centers (ASC)

Payment updates 

For CYs 2019 through 2023, CMS had previously adopted a policy to update the ASC payment system using the hospital market basket update. Considering the impact of the COVID-19 public health emergency on health care use, CMS extended that policy an additional two years, through CYs 2024 and 2025. 

Using the hospital market basket methodology, for CY 2025, CMS finalizes increasing payment rates under the ASC payment system by a net 2.9%. Based on this update, CMS estimates total payments to ASCs for CY 2025 will be approximately $7.4 billion, an increase of approximately $308 million compared to estimated CY 2024 Medicare payments.

The CY 2024 ASC conversion factor rate of $53.514 would be adjusted by the final wage index budget neutrality factor of 0.9969 plus the 2.9% market basket update, resulting in a final CY 2025 ASC conversion factor of $54.895.

Covered surgical produces list (CPL) 

For CY 2025, CMS finalizes adding 21 medical and dental procedures to the ASC CPL and ancillary services lists. See Table 154 in the final rule. 

How CLA can help with the 2025 hospital outpatient rule

Final payment and program changes can have real financial and operational impacts. CLA can help you analyze these policies and chart your course for the future. 

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