American Society of Plastic Surgeons
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  1. Health Policy

Medicare: Proposed and Final Rules

Each year, CMS sets forth proposed payment and policy changes to the:

  • Physician Fee Schedule (PFS) /Quality Payment Program (QPP)
    • This rule establishes RVUs for the PFS and rules for the QPP and other Medicare Part B payment policies to ensure that payment systems are updated to reflect changes in medical practice and the relative value of services, as well as changes in Medicare statute.
    • Release of the 2022 Proposed Rule is expected before July 1, 2021.
  • Hospital Outpatient Prospective Payment System
    • This rule provides updates to the payment policies and payment rates for services furnished to Medicare beneficiaries in hospital outpatient departments (HOPDs) and ambulatory surgical centers (ASCs).
    • Release of the 2022 Proposed Rule is expected before July 1, 2021.
  • Hospital Inpatient Prospective Payment System (IPPS)
    • This rule sets payment and policy changes to the Medicare IPPS, including review of MS-DRGs to ensure relativity of payments; reviews of IME and DME funding; and capital-related costs of acute care hospitals and certain hospitals and hospital units that are excluded from IPPS.
    • Release of the 2022 Proposed Rule is expected before May 1, 2021.

Proposed Rule files are publicly available to encourage analysis of the changes before they are finalized. Comments can be submitted to the Agency about the impact of these proposed changes to the payment systems.

ASPS staff review each rule, providing updates on issues that may impact a plastic surgeon's office. Working with ASPS leadership, staff routinely submit comment letters to the Agency.

Terms to Know

Federal Register: The Federal Register is the official daily publication for agency rules, proposed rules, and notices of Federal agencies and organizations, as well as for Executive Orders and other presidential documents. The Federal Register is published by the Office of the Federal Register within the National Archives and Records Administration (NARA). To learn more, visit the Federal Register website at https://www.federalregister.gov.

Notice of Proposed Rulemaking (NPRM): An official document that announces and explains an agency's plan of action to address a problem and accomplish the goals of any authorizing statute /congressional action that the Agency has been made responsible for. Generally, this plan must be published in the Federal Register. While a proposed rule is under review (generally a 60-day period), any affected entity can submit comments and/or ask for a meeting to provide information on how the rule might affect them. The Agency reviews public comments and may make some adjustments to their proposals before publishing a final rule.

PAYGO: Pay-As-You-Go Act of 2010. Mandates the Office of Management and Budget (OMB) must maintain five- and 10-year scorecards that report the estimated cumulative changes in revenues and outlays generated by new legislation. If either scorecard indicates a net increase in the deficit, OMB must order a sequestration to eliminate the overage.

Recoupment: the recovery by Medicare of any outstanding Medicare debt by reducing present or future Medicare payments and applying the amount withheld to the indebtedness (42 CFR 405.370). For the purposes of recovering accelerated and advance payments, recoupment means the recovery by Medicare of any outstanding Medicare accelerated and advance payment loans by reducing present or future Medicare payments and applying the amount withheld to the outstanding loan balance.

Rule Making Process: Federal regulations are created through a process known as "rulemaking." Once an agency decides that a regulatory action is necessary or appropriate, it develops and typically publishes a proposed rule in the Federal Register, soliciting comments from the public on the regulatory proposal. After the agency considers this public feedback and makes changes where appropriate, it then publishes a final rule in the Federal Register with a specific date upon which the rule becomes effective and enforceable. In issuing a final rule, the agency must describe and respond to the public comments it received. See also NPRM.

Sequestration: The automatic reduction (i.e., cancellation) of certain federal spending, generally by a uniform percentage. The sequester is a budget enforcement tool that was established by Congress in the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA, also known as the Gramm-Rudman-Hollings Act; P.L. 99-177, as amended) and was intended to encourage compromise and action, rather than being implemented (also known as triggered). Generally, this budget enforcement tool has been incorporated into laws to either discourage or encourage certain budget objectives or goals. When these goals are not met, either through the enactment of a law or the lack thereof, a sequester is triggered and certain federal spending is reduced.

The Medicare program is impacted by sequestration since Medicare benefit payments are considered mandatory spending. Medicare's benefit structure remains unchanged under a mandatory sequestration order; beneficiaries see few direct impacts. However, Medicare plans and providers see reductions in payments – payments and Medicare Integrity Program spending cannot be reduced by more than 2%.

Under a Statutory PAYGO sequestration order, Medicare benefit payments and Medicare Program Integrity spending cannot be reduced by more than 4%

CMS Resources