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Pulmonary Rehabilitation Payment Cuts in Proposed CMS Outpatient Prospective Payment Rule

Last week, CMS released the proposed Hospital Outpatient Prospective Payment System rule for calendar year 2023. The proposed rule covers a wide range of coverage and payment policies for Medicare outpatient services and Medicare quality programs. Of direct interest to ATS members is that the proposed rule includes a nearly 50 percent reduction in reimbursement for outpatient non-COPD pulmonary rehabilitation – codes G0237 and G0238.


CMS pays for outpatient non-COPD pulmonary rehabilitation in Ambulatory Payment Classifications (APCs) – a system where CMS groups multiple services with clinical and resource use similarity into a single category and pays the group average for all services.


In this case, the proposed payment cut is driven entirely by the addition of the COVID-19 nasal swab test to the APC. The addition of over a million COVID-19 swab test claims, which have relatively modest costs, has distorted average payment for the APC, leading to a nearly 50 percent reduction for all services in the APC. In the past, CMS has taken steps to prevent new cost data from creating wide payment swings in APCs. The ATS will reach out to CMS to raise our concerns and urge the agency to take steps to prevent the payment distortion caused by the addition of COVID-19 swab tests to the APC.

Last Reviewed: July 2022