CMS Releases CY 2025 OPPS and ASC Final Rule

The Centers for Medicare & Medicaid Services (CMS) has released the calendar year (CY) 2025 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System Final Rule with comment period (CMS-1809-FC), which updates payment rates, policies and regulations affecting Medicare services furnished in hospital outpatient and ASC settings beginning on Jan. 1, 2025.

For CY 2025, CMS increased payment rates under the OPPS and ASC Payment System by 2.9 percent. In continuation of an existing policy, hospitals and ASCs that fail to meet their respective quality reporting program requirements will be subject to a 2 percent reduction in the CY 2025 fee schedule increase factor.

Key Takeaways

• CMS finalized several key policies such as maintaining the low-volume Ambulatory Payment Classification (APC) exemption, excluding nine cell and gene therapies, and creating new payment criteria for high-cost drugs provided by Indian Health Service (IHS) and Tribal facilities.
• CMS did not expand the categories of services subject to prior authorization but finalized a policy to harmonize the timeline for review for nonurgent services and procedures from 10 to seven calendar days.
• CMS finalized Medicaid and Children's Health Insurance Program (CHIP) policies, mandating continuous 12-month eligibility for children under 19 years of age, consistent with the Consolidated Appropriations Act (CAA) of 2023.
• CMS finalized new quality standards for obstetrical care to qualify for Medicare reimbursement. The updated requirements include 1) having obstetrical patients supervised by a registered nurse (RN), midwife or other practitioner with necessary training, 2) keeping obstetrics equipment easily available, 3) conducting one performance improvement project per year, 4) being ready to provide emergency services and 5) having written policies for transferring patients.
• CMS finalized its proposal to make separate payment for non-opioid treatments (including drugs and devices) for pain relief.
• CMS finalized the revision to its current bundling policy for diagnostic radiopharmaceuticals to separately pay for high-cost radiopharmaceuticals with a per-day cost over a specific threshold.
• CMS finalized the policy to expand coverage of colorectal cancer (CRC) screening tests.

To learn more about the OPPS and ASC Final Rule, review the following resources:

• Final Rule
• Press Release
• Fact Sheet

OPPS and ASC Payment System Updates

Under the OPPS and ASC Payment System Final Rule, CMS will increase payment rates by a net 2.9 percent (an increase from 2.6 percent in the proposed rule) for CY 2025 compared to 2024. This includes a 3.4 percent market basket update, offset by a 0.5 percentage point productivity adjustment.

ASC Payment Update

The rule finalizes the ASC conversion factor at $54.895 for facilities meeting quality reporting standards and $53.828 for those not meeting them. The finalized ASC conversion factor reflects a 2.9 percentage point increase aligned with the hospital market basket rate and incorporates a 0.9969 wage index neutrality adjustment factor. Hospitals failing to meet the Hospital Outpatient Quality Reporting (OQR) Program reporting requirements will face an additional 2 percent reduction from the increase factor adjustment to the conversion factor used to calculate the OPPS payment rate.

Ambulatory Payment Classification Group Policies

CMS finalized that a Current Procedural Terminology (CPT) code 0810T (subretinal injection of pharmacological agent, including vitrectomy and one or more retinotomies) will continue to be assigned to APC 1563.

• CMS is soliciting comment on 107 new Healthcare Common Procedure Coding System (HCPCS) codes made effective on Oct. 1, 2024, with interim OPPS status indicators and APC assignments for CY 2025. CMS is also soliciting comment on the new HCPCS codes that will be effective Jan. 1, 2025, with interim status indicators and APC assignments. These assignments will be open for public comment in the CY 2026 proposed rule and finalized in the CY 2026 OPPS/ASC Final Rule.
• The rule finalizes the proposal without modification to retain the universal low-volume APC policy in which services with fewer than 10 claims over the four-year lookback period would be exempted from the New Technology APC to which they are assigned.
• The rule finalizes exempting 23 APCs from the 2 Times Rule that governs whether the costs of items and services within an APC group have comparable resource use.
• For CY 2025 and beyond, CMS will exclude certain cell and gene therapies from Comprehensive APC (C-APC) packaging, recognizing these treatments as primary, independent therapies rather than adjunctive to any C-APC primary service. CMS will provide separate payment for cell and gene therapies like CAR-T cell treatments and gene therapy for spinal muscular atrophy, ensuring these are not bundled with unrelated procedures. Specifically, CMS finalizes its proposal to exclude the following qualifying therapies: Yescarta (Q2041), Kymriah (Q2042), Provenge (Q2043), Tecartus (Q2053), Breyanzi (Q2054), Abecma (Q2055), Carvytki (Q2056), Luxturna (J3398), Zolgensma (J3399), CASGEVY (J3392).

Drugs, Biologicals, Radiopharmaceuticals and Medical Devices

Products with Pass-Through Status

CMS did not receive any comments on its proposed rule and finalized without changes to continue pass-through payment status in CY 2025 for 80 drugs and biologicals. The rule finalizes to end pass-through payment status by the end of CY 2025 for 28 drugs and biologicals that received initial approval between April 2022 and January 2023.

Products without Pass-Through Status

The rule finalized without modification setting the packaging threshold at $140 for determining separate payment classifications for drugs and biologicals, ensuring consistent packaging determinations. The rule finalizes continuing to allow biosimilars to be paid separately if their reference biologicals are also paid separately.

Packaging Policy for Diagnostic Radiopharmaceuticals

CMS currently packages various drugs, biologicals and radiopharmaceuticals, including diagnostic radiopharmaceuticals, based on their use in diagnostic tests or procedures.

In this Final Rule, CMS finalized the agency's proposal to pay separately for diagnostic radiopharmaceuticals with per-day costs above a threshold of $630. CMS is finalizing to pay for separately payable diagnostic radiopharmaceuticals based on their Mean Unit Cost (MUC) derived from OPPS claims for CY 2025 and to update the threshold in CY 2026 and subsequent years by the Producer Price Index (PPI) for Pharmaceutical Preparations. While CMS did not propose to use average sales price (ASP) data for determining payment rates of non-pass-through diagnostic radiopharmaceuticals with claims data, the agency is seeking comment on its use for determining the per-day cost and setting the payment rate for diagnostic radiopharmaceuticals in the future.

Add-On Payment for Select Radiopharmaceuticals

Since CY 2013, CMS has provided an additional $10 payment for Tc-99m produced without highly enriched uranium (HEU) to support U.S. initiatives to reduce reliance on foreign reactors and promote the production of medical radioisotopes from non-HEU sources. CY 2025 will be the final year for this add-on payment, pending certification by the secretaries of the U.S. Department of Energy (DOE) and U.S. Department of Health and Human Services (HHS) that a sufficient global supply of non-HEU Tc-99m exists for U.S. patient needs.

Due to concerns about the domestic supply chain for molybdenum-99 (Mo-99), the precursor to Tc-99m, CMS finalized a new $10 add-on payment per dose, beginning Jan. 1, 2026, for radiopharmaceuticals using Tc-99m derived from domestically produced Mo-99. This initiative aims to ensure equitable reimbursement for providers, reflecting the higher costs of domestically sourced products, and safeguard continued beneficiary access to essential medical resources.

Payment for Devices

CMS received 14 complete pass-through device applications by the March 1, 2024, quarterly deadline. Of these, 10 had received Breakthrough Device designation and U.S. Food and Drug Administration (FDA) marketing authorization, making them eligible to apply under the alternative pathway. Detailed discussion on the applications received begins on page 492 of the Final Rule.

The rule finalized that all 10 proposed breakthrough devices meet the requirements for pass-through payment status under the alternative pathway. The rule finalizes that none of the four applications for traditional pass-through payment status meet the eligibility requirements and are not being approved.

The rule finalized the proposal to replace 0616T with the new CPT code 66683 and remove CPT codes 0617T and 0618T, effective Jan. 1, 2025. Additionally, CMS will continue the CY 2024 policy that reassigns CPT codes 0308T and 66683 from Level 5 to Level 6 Intraocular APC to improve payment stability for this low-volume APC code category.

Because newer HCPCS codes lack claims data, CMS also finalized without modification to apply the greater of 31 percent of the HCPCS code's payment or the APC-wide device offset percentage for new procedure HCPCS codes that include implantation or insertion of a device.

Eligible Products and Payment Amounts for Non-Opioid Pain Management Payment Policy

Section 4135 (Access to Non-Opioid Treatments for Pain Relief) of the CAA provides for temporary separate payments for certain non-opioid treatments for pain relief in the Hospital Outpatient Department (HOPD) and ASC settings from Jan. 1, 2025, through Dec. 31, 2027.

Relying upon the statutory definition of non-opioid treatment for pain relief outlined in Section 1833(t)(16)(G)(iv) of the Act, CMS finalized that the following six drugs will qualify as non-opioid treatments for pain relief and will receive separate payments in HOPD and ASC settings starting in CY 2025.

• Exparel (HCPCS Code J9066, previously HCPCS code C9290, injection, bupivacaine liposome, 1 mg)
• Omidria (HCPCS code J1097, Phenylephrine 10.16 mg/ml and ketorolac 2.88 mg/ml ophthalmic irrigation solution, 1 ml)
• Dextenza (HCPCS code J1096, Dexamethasone, lacrimal ophthalmic insert, 0.1 mg)
• Xaracoll (HCPCS code C9089, Bupivacaine, collagen-matrix implant, 1 mg)
• Zynrelef (HCPCS code C9088, Instillation, bupivacaine and meloxicam, 1 mg/0.03 mg)
• Ketorolac tromethamine injection (J1885, Injection, ketorolac tromethamine, per 15 mg)

In addition, five devices will qualify. See Table 157 on pages 1072-1073 and Table 158 on pages 1073-1074 of the unpublished rule for a list of these products and their payment amounts.

CMS finalized a payment methodology under Section 1833(t)(16)(G)(ii) of the CAA for non-opioid treatments for pain relief, similar to transitional pass-through provisions in Sections 1833(t)(6)(D)(i) and (ii). For drugs or biological products, the payment will be calculated by subtracting the portion of the Medicare Outpatient Department (OPD) fee schedule associated with the product, with a finalized zero-dollar offset for CY 2025. For medical devices, the payment will be based on the hospital's adjusted charges minus the relevant portion of the fee schedule, also finalized to be zero dollars for CY 2025. This final initial zero-dollar offset is meant to account for the newness of these products and ensure access to opioid alternatives is not hindered by Medicare payment policies.

CMS also finalized a payment cap at 18 percent of the OPD fee schedule amount for the service with which the non-opioid treatment is provided, determined by the top five volume-based OPPS procedures associated with each non-opioid product. CMS also clarifies the description of the payment limitation in the regulatory text to state that the volume weighted average for the payment limitations will be based on the most frequent five OPD primary procedures into which a non-opioid treatment is for. In this Final Rule, CMS has updated the payment limitations based on the most recently available data and has excluded any procedures with which the payment for the non-opioid product was not packaged. This payment limitation will apply to the total separate payment amount billed per date of service, rather than per HCPCS dosage unit, to ensure it accurately reflects total costs. Additionally, CMS finalized new status indicators (K1 for drugs and biologicals, H1 for devices) under the OPPS for these non-opioid products.

New Conditions of Participation

Obstetrical Services Specific Conditions of Participation

CMS has highlighted the current maternal health crisis in the U.S., which has resulted in one of the highest maternal mortality rates among high-income countries with disproportionate impact on racial and ethnic minorities. In response, CMS has undertaken various initiatives to improve maternal healthcare. In May 2024, CMS published a request for information (RFI) on Obstetrical Services Standards for hospitals, critical access hospitals and rural emergency hospitals (REHs) in the FY 2024 Hospital Inpatient Prospective Payment Systems (IPPS) Proposed Rule, seeking public comments on developing targeted baseline health and safety standards for obstetrical (OB) services.

After examining the high rates of maternal mortality and morbidity in the U.S. and reviewing feedback from stakeholders and evaluating available resources and current requirements, CMS has determined that new requirements for OB services are necessary to protect the health and safety of pregnant, birthing and postpartum patients. Consequently, CMS proposed new Conditions of Participation (CoP) for OB services, including requirements for the organization, staffing and delivery of OB services, as well as staff training.

Notably, CMS finalized new Conditions of Participation (CoPs) for hospitals and critical access hospitals (CAHs) for OB services, including new requirements for maternal quality assessment and performance improvement (QAPI), baseline standards for the organization, staffing and delivery of care within OB units and staff training on evidence-based best practices every two years.

New Standard within Emergency Services CoP

To improve care for all patients, including pregnant, birthing and postpartum women receiving emergency services, CMS proposed a new standard, "Emergency Services Readiness," within the Emergency Services CoPs. This standard would require facilities to have protocols and provisions consistent with nationally recognized and evidence-based guidelines to meet the emergency needs of patients, as well as train staff these protocols and provisions annually.

CMS finalized revisions to the emergency services CoP related to emergency readiness for hospitals and CAHs that provide emergency services. In addition, CMS is finalizing revisions to the Discharge Planning CoP for all hospitals and a phased-in implementation to provide hospitals and CAHs with additional time to come into compliance with requirements. Lastly, CMS includes commentary on whether these requirements should also apply to REHs.

Quality and Health Equity Measures

Overall Hospital Quality Star Rating Modification

To prioritize patient safety, CMS sought public comment on three options for updating the overall hospital quality star rating methodology and whether hospitals that performed in the bottom quartile in the Safety of Care measure group should be eligible to receive five-star ratings. The options are 1) reweighting the Safety of Care measure group, 2) reducing the rating of any hospital in the lowest quartile for Safety of Care by one star or 3) combining a weight change with a policy-based four-star maximum for any hospital in the lowest quartile.

There were mixed reactions to proposals for star rating adjustments, with some endorsing caps or penalties for low safety scores and others expressing concern that these changes could mislead consumers and disproportionately affect small or rural hospitals. CMS noted that feedback will be considered in future rulemaking.

Health Equity Measures Across Quality Programs

CMS finalized three measures for the Hospital OQR, Ambulatory Surgical Center Quality Reporting (ASCQR) and Rural Emergency Hospital Quality Reporting (REHQR) programs, aligned with CMS' goal of advancing health equity:

1. Hospital Commitment to Health Equity (HCHE) measure for the Hospital OQR and REHQR Programs and Facility Commitment to Health Equity (FCHE) measure for the ASCQR Program, beginning with the CY 2025 reporting period and impacting the CY 2027 payment/program determination. This measure uses five attestation-based domains.

Facilities must submit annual attestations on their performance across the five domains, with public reporting planned to encourage transparency and accountability. Although the HCHE and FCHE measures are not tied to direct financial penalties, compliance is required to maintain program eligibility without payment reductions.

2. Screening for Social Drivers of Health measure, with voluntary reporting beginning with CY 2025 and mandatory reporting beginning with CY 2026, impacting the CY 2028 payment/program determination. The measure assesses the total number of patients screened for five specific health-related social needs (HRSNs).
3. Screen Positive Rate for Social Determinants of Healthcare measure, with voluntary reporting beginning with CY 2025 and mandatory reporting beginning with CY 2026 and impacting the CY 2028 payment/program determination. The measure examines the number of beneficiaries who screened positive for each of the five specific social risk factors used in the screening for social determinants of healthcare measure.

Proposed Changes to Hospital OQR Program Quality Measures and Program

CMS finalized the following changes to the Hospital OQR measures, in addition to the health equity measures outlined above:

• Adoption of the Patient Understanding of Key Information Related to Recovery After a Facility-Based Outpatient Procedure or Surgery, Patient Reported Outcome-Based Performance measure, with voluntary reporting beginning with CY 2025 and mandatory reporting beginning with CY 2026 and impacting the CY 2028 payment determination. The goal of this measure is to provide insight into the communication of recovery information and improve patient understanding of this information.
• Removal of the MRI Lumbar Spine for Low Back Pain measure beginning with the CY 2025 reporting period and impacting the CY 2027 payment determination, as recent studies have shown that performance on this measure did not improve patient outcomes.
• Removal of the Cardiac Imaging for Preoperative Risk Assessment for Non-Cardiac, Low-Risk Surgery measure beginning with the CY 2025 reporting period and impacting the CY 2027 payment determination, due to a lack of meaningful data.

CMS also finalizes the proposal to modify the Hospital OQR Program's immediate measure removal policy to an immediate suspension policy, which is used when continued use of a measure raises patient safety concerns. If an immediate suspension occurs, CMS will address the suspension and propose to retain, modify or remove the measure in the next reasonable rulemaking opportunity. This change aligns measure suspension policies across the REHQRP, Hospital OQRP and ASCQRP and is intended to increase transparency and provide opportunity for public input before a measure is potentially removed.

Additionally, CMS finalizes the proposal to require that Electronic Health Record (EHR) technology be certified to all available electronic clinical quality measures (eCQMs) to ensure hospitals can accurately capture and report the data needed for these measures.

CMS also finalizes the proposal to include the Median Time from Emergency Department (ED) Arrival to ED Departure for Discharged ED Patients measure – Psychiatric/Mental Health Patients strata publicly on Care Compare. While this data is already available online, CMS believes that displaying this information on Care Compare will be useful to patients when choosing care locations, as well as for researchers and hospital staff aiming to address health disparities and improve timely access to care.

Other Notable Proposals

Individuals Currently or Formerly in the Custody of Penal Authorities

CMS finalized a proposal to revise 42 CFR 411.4 to clarify the "no legal obligation to pay" payment exclusion by narrowing the description of custody to exclude individuals on bail, parole, probation or home detention to facilitate access to Medicare coverage, with one small modification to the regulatory text based on comments.

Remote Services (Diabetes, Medical Nutrition, Mental Health)

In the Proposed Rule, CMS noted that the agency recognizes that for the past several years, through the public health emergency (PHE) for COVID-19 and several legislative extensions of PHE-related flexibilities for Medicare telehealth services, the agency has "generally aligned" payment policies for outpatient therapy services, diabetes self-management training (DSMT) and medical nutrition therapy (MNT) services furnished remotely by hospital staff to beneficiaries in their homes with policies for Medicare telehealth services. CMS states that "to the extent that therapists and DSMT and MNT practitioners continue to be distant site practitioners for purposes of Medicare telehealth services, CMS anticipates aligning the agency's policy for these services with policies under the Physician Fee Schedule (PFS) and continuing to make payment to hospitals for these services when furnished by hospital staff.

In the Final Rule, CMS clarifies the policies for remotely furnished outpatient therapy services, DSMT and MNT services and mental health services furnished remotely to beneficiaries in their homes by hospital staff to maintain alignment across payment systems. CMS notes that Section 4113 of the CAA expanded the range of practitioners eligible to furnish telehealth services only through CY 2024, which included physical therapists (PTs), occupational therapists (OTs) and speech-language pathologists (SLPs) and that, beginning Jan. 1, 2025, these practitioners will no longer be able to bill for Medicare telehealth services. Consequently, the agency notes that beginning Jan. 1, 2025, CMS likewise will no longer pay for outpatient therapy, DSMT and MNT services when furnished remotely by hospital staff to beneficiaries in their homes

Payment for HIV PrEP in HOPDs

In this Final Rule, CMS is finalizing paying for HIV pre-exposure prophylaxis (PrEP) drugs covered as an additional preventive service and related services under the OPPS. CMS is also finalizing the agency's proposed site neutral policy where products are generally paid similar rates under the OPPS and PFS.

Inpatient-Only List

CMS finalized adding three services to the inpatient-only (IPO) list, which includes services that should only be performed inpatient due to their complexity and the level of post-operative care required (CPT codes 0894T, 0895T and 0896T), which will be effective Jan. 1, 2025. Table 138 contains all the changes to the IPO list.

Further, CMS is finalizing the addition of three liver allograft services for which codes were newly created by the American Medical Association (AMA) CPT Editorial Panel for CY 2025 to the IPO list (assigning them to status indicator "C" (Inpatient Procedures)). Additionally, CMS is finalizing the removal of a pelvic fixation code (CPT code 22848) from the IPO list for CY 2025 (reassigning it to status indicator "N" (Items and Services Packaged into APC Rates)).

Partial Hospitalization Services

CMS finalized updates to policies and payment rates for Partial Hospitalization Programs (PHPs) and Intensive Outpatient Programs (IOPs) furnished in HOPDs and Community Mental Health Centers (CMHCs). No new services were added to be eligible under PHP and IOP, and no adjustments to coding and billing policies have been made since CY 2024. However, CMS is finalizing changes to payment rates for the PHP and IOP APCs as put forth in the proposed rule to support accurate reimbursement and better alignment with the actual services provided. The final payment rates for CY 2025 are based on CY 2023 claims data and available cost information. CMS is finalizing its proposal to maintain the same outlier payment metrics as CY 2024 and will continue to use a separate outlier policy for CMHCs.

Review Time Frames for the HOPD Prior Authorization Process

In CY 2020, CMS established a nationwide prior authorization process and requirements for certain OPD services. Providers must submit a prior authorization request to the Medicare Administrative Contractor (MAC) for services included on the list of OPD services that require prior authorization.

In the CMS Interoperability and Prior Authorization Final Rule, CMS finalized for Medicare Advantage and other plans response times of seven calendar days for standard prior authorization requests. Even though Medicare wasn't subject to this rule, CMS proposed to align the time frame for prior authorization requests for fee-for-service hospital outpatient services to seven calendar days, instead of 10 business days, for standard reviews. CMS stated that this change would not only streamline the prior authorization processes so that they are the same across payers but would also help to reduce provider burden by having the same time frame and reducing the potential for delays in care by decreasing the time beneficiaries and providers wait for prior authorization decisions on standard requests in fee-for-service Medicare.

In the Final Rule, CMS estimates that the total annual number of submissions will be 564,010 (394,808 submissions through fax or electronic means and 169,203 mailed submissions). Therefore, CMS estimates that the annual burden hours allotted across all providers will be 316,412 hours (0.5 hours x 564,010 submissions plus 3 hours x 11,469 providers for education). The annual burden cost is $12,572,244 (316,412 hours x $37.06 plus $846,015 for mailing costs). The agency estimates the annual burden to be 316,412 hours and $12,572,244. Lastly, CMS states that the information collection review approved under Office of Management and Budget (OMB) control number 0938-1368 will be revised and submitted to OMB for approval of this extension.

Continuous Eligibility for Children in Medicaid and CHIP

In alignment with the CAA and to ensure continuous eligibility (CE) in Medicaid and CHIP for children under 19, CMS proposed to make CE mandatory for all states. This change would remove previous state options to limit CE to younger age groups or shorter periods. Additionally, the CAA, 2023 aligns CHIP's CE policy with Medicaid, removing the option for states to disenroll children for nonpayment of premiums or enrollment fees during the CE period. States may still collect enrollment fees before initial enrollment or reenrollment and can disenroll children with unpaid premiums at the end of the 12-month CE period, following required grace period protocols. This alignment ensures consistent coverage protections across both Medicaid and CHIP. The current Medicaid regulation includes exceptions that allow states to terminate coverage during a CE period if 1) the child or representative requests it, 2) eligibility was erroneously granted due to agency error or fraud or 3) the child is deceased. These exceptions remain unchanged to maintain program integrity.

In this rule, CMS finalized revisions of Medicaid and CHIP regulations to codify the requirement within the CAA to require states to provide 12 months of CE to children under age 19 in Medicaid and CHIP, with limited exceptions

Medicaid Clinic Services' Four Walls Exceptions

Under law, states may choose to offer certain Medicaid benefits to categorically needy and medically needy Medicaid beneficiaries. Clinic services are one of these optional benefit categories. The first type of services included in the benefit are services furnished at the clinic (the "four walls" requirement) by or under the direction of a physician or dentist. 

CMS finalized three exceptions:

• An exception for IHS and Tribal clinics, allowing them to provide services outside the clinic walls. This change would be mandatory for all states that opt to cover Medicaid clinic services.
• An optional exception for clinics primarily organized to treat outpatients with behavioral health disorders, including mental health and substance use disorders. These clinics would be allowed to provide services outside the clinic walls, including nonbehavioral health services. This exception is optional for states.
• An optional exception for clinics located in rural areas (excluding rural health clinics), allowing them to offer services outside the clinic walls. This change aims to improve access to healthcare services for residents in rural areas who often lack access due to distance and transportation challenges. States can choose to adopt this exception to better serve their rural populations.

These exceptions are designed to remove barriers to accessing care for vulnerable populations, ensuring they receive necessary services regardless of their ability to visit a clinic in person.

Blended Payment Policy for Investigational Device Exemption Studies and Coverage and Evidence Development Clinical Trials

In the CY 2023 OPPS/ASC Final Rule, CMS established a policy to make a single blended payment for devices and services in Category B investigational device exemption (IDE) studies to preserve the scientific validity of these studies. This policy involves creating or revising HCPCS codes to describe Category B IDE studies, including both treatment and control arms, along with routine care items and services. The single blended payment rate takes into account the frequency of device use compared to the control group, averaging the payment for the device with zero payment for the control in a 1:1 ratio. CMS has clarified that this policy only applies to IDE studies with a control arm; studies without a control arm are paid using standard Medicare payment methodologies.

For CY 2025, CMS proposed technical refinements to Category B clinical trials coding and payment policy for devices and procedures. CMS also proposed to extend coding and payment policy to drugs and devices that meet the Medicare Coverage and Analysis Group's coverage with evidence development (CED) requirement for which there is a control arm. CMS clarified that Category B IDE studies with no control arm are payable under normal methodology versus not payable. CMS proposes a similar policy for payment of devices under a CED national coverage determination (NCD) – e.g., a single blended payment rate that would be dependent on the specific trial protocol.

CMS proposed payment of drugs at an adjusted payment level representing the frequency with which the study drug and placebo (or comparator) is furnished. The base payment amount for the study drug is proposed to be ASP plus 6 percent. If no ASP data is available, then CMS proposed to pay wholesale acquisition cost (WAC) with initial sales period at WAC plus 3 percent otherwise at WAC plus 6 percent. If no WAC data is available, CMS proposed to pay 95 percent average wholesale price. The placebo/comparator would be assigned "zero dollar" and used with the drug amount to determine a blended rate.

In the Final Rule, CMS finalizes a clarification to the Category B clinical trials coding and payment policy for devices and procedures to specify that CMS policy applies only to IDE studies with a control arm and where a payment adjustment is necessary to preserve the scientific validity of such a study. CMS is not finalizing the proposal to extend the coding and payment policy to drugs and devices that are being studied in clinical trials under a CED National Coverage Determination (NCD) for which the trial includes a treatment and control arm for CY 2025. CMS states the agency is taking additional time to consider the broad implications of a payment methodology for clinical trials for CED drugs and devices.

Coverage Changes for Colorectal Cancer (CRC) Screening Services

As discussed in the CY 2025 PFS Proposed Rule, based on public input and consultation with specialty societies, CMS proposed to update and expand coverage for CRC screening.

CMS proposed to make the following revisions:

• remove coverage for the barium enema procedure
• add coverage for the computed tomography colonography (CTC) procedure
• expand the existing definition of a "complete colorectal cancer screening" to include a follow-on screening colonoscopy after a Medicare-covered blood-based biomarker CRC screening test

However, CMS is modifying its proposal to add coverage for the CTC procedure, reassigning CPT code 74263 to AP 5523 (Level 3 Imaging Without Contrast).

All-Inclusive Rate Add-On Payment for High-Cost Drugs Provided by the IHS and Tribal Facilities

In the Proposed Rule, CMS sought comment on how to best apply an add-on payment model, calculation and proposed implementation plan. CMS issued an RFI regarding the relative operating costs of Tribally operated outpatient clinics, as well as feedback and supporting evidence to address whether or why payment set at the IHS all-inclusive rate (AIR) would be more appropriate than payment rates under the federally qualified health center prospective payment system.

In the Final Rule, CMS finalizes the policy to separately pay IHS and Tribal hospitals for high-cost drugs furnished in HOPDs as proposed with modifications to 1) use the lower 48 AIR amount in effect at the time of the release of the CY OPPS/ASC Final Rule with comment period to calculate the threshold for the list of drugs qualifying for the add-on payment for the following calendar year and 2) adopt a drug packaging threshold exception for biosimilars that parallels the drug packaging threshold exception for biosimilars under the OPPS.

Further, CMS states that in determining which drugs would be eligible for the add-on payment, the agency considered limiting the add-on payment to high-cost oncology drugs but determined that it would be appropriate to apply the add-on payment to all high-cost drugs for several reasons, including 1) the same equity and access concerns that supported utilizing an add-on payment for oncology drugs also supported utilizing an add-on for high-cost drugs used in other care specialties, 2) CMS determined that applying the add-on payment to all high-cost drugs would eliminate the possibility of unintentionally excluding an oncology drug from separate payment due to the inherent challenge of defining a class of drugs and 3) the proposal would parallel how drugs are being paid for under Arizona Medicaid (AHCCCS) for IHS and Tribal facilities.

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