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An Update on the Hyperbaric Oxygen Fee Reduction

by | Dec 15, 2023 | Fight the Good Fight, Healthcare Payment Policy, Hyperbaric Oxygen Therapy | 0 comments

An Update on the Hyperbaric Oxygen Fee Reduction

Guest Post by John Peters, Undersea & Hyperbaric Medical Society (UHMS) Executive Director

Caroline,

Thank you for allowing me the opportunity to provide an update on the 2024 Final Rule and rate for APC 5061 / Code G0277 (hyperbaric oxygen per 30-minute segment).

On November 3, CMS published the OPPS CY2024 final rule which included a 41.5% decrease rather than a 7.5% increase based on the 2023 rate compared to the proposed rate. The facility fee (APC rate) for HBO2 therapy (G0277), went from the proposed rate of $125.07 to $73.64 per 30-minute segment.

A drop of this magnitude would have devastating consequences for Medicare-aged beneficiaries, due to reduced access to care as hospitals and clinics who operate with costs over $74 per 30-minute would close their doors.

This would also put additional downward pressure on our emergent and urgent hyperbaric medicine programs, and that’s not acceptable.

Since we were notified of this critical issue, the Undersea & Hyperbaric Medical Society (UHMS) has been working daily with our partners and stakeholders, including the American Hospital Association, the Alliance of Wound Care Stakeholders, et al, to see CMS correct what we believe to be an error in their calculations.

So, our initial goals were to:

  1. Get CMS to acknowledge the precipitous drop…
  2. Get them to recalculate the rate and/or explain the methodology change leading to the disparity between the proposed and the final rates, and…
  3. Have them correct it before the effective date of January 1.

We were very quickly able to get CMS to acknowledge the unusual drop. However, CMS has not provided reasoning behind the drop due to their rule-making process guidelines, which left us in a pickle to either trust they would correct the error (if it was an error), or develop a more aggressive approach to this situation. The decision was to do both.

First, we needed to determine if the rate drop was an error and to do that, we had to identify a data analytics firm who had the Medicare cost data for the same period CMS used to run its calculations AND could turn the analysis around in one week. Through the Alliance, we learned that Dobson and DaVanzo (D/D), who we (UHMS) have worked with before, had the data and could meet the deadline. Working with the UHMS Executive Committee, we approved an emergency funding of $15,000 to pay for the analysis. D/D completed the analysis on December 6th. The data run showed that the rate should have been closer to the proposed rate (without a drop). That information was sent to CMS backchannel that night after having been reviewed by key stakeholders.

While we were working with the Alliance on the issue, we were also engaged by our colleagues at the American Hospital Association who have been fantastic to work with and they too ran a separate analysis (they had the Medicare cost data for the respective period) which also showed the rate being closer to the proposed. The AHA completed their analysis slightly ahead of the D/D data run and both results were in a tight range which gave us confidence that CMS had indeed made an error.

With that information, our partners at the AHA and Alliance have communicated to the highest levels of CMS and HHS about the findings.

In summary, the UHMS has been leading a broad coalition of stakeholders to address the situation in rapid fashion.

Here is the schedule of actions that have been taken to date.

  • American Hospital Association letter – distributed 12/6
  • D/D cost data analysis sent to CMS – distributed 12/6
  • Comment letter from the Alliance of Wound Care Stakeholders – distributed 12/8
  • The Stakeholder letter with >1600 signatures – distributed on 12/12
    • 17 Associations
    • 55 Hospital Systems
    • 78 Individual Hospitals
    • 62 Clinics and wound care practices
    • 20 Manufacturers, Health Technology and other vendors
    • 1406 Individuals affiliated with the delivery of HBO2

The UHMS will continue to follow up daily with our partners and stakeholders until this situation is resolved.

Based upon historical precedent, we should expect CMS to issue a corrective notice sometime after the first of the year. For 2023, the corrective notice was published on January 13 and retro to January 1.

It’s important to acknowledge the many individuals and organizations that have and are contributing to this effort. Thank you for stepping up.

Regards,

John Peters
Executive Director
Undersea and Hyperbaric Medical Society

The opinions, comments, and content expressed or implied in my statements are solely my own and do not necessarily reflect the position or views of Intellicure or any of the boards on which I serve.

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