CY 2025 Medicare Hospital Outpatient Prospective Payment System – Final Rule

On November 1, the Centers for Medicare & Medicaid Services (CMS) finalized its Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) payment rates for calendar year (CY) 2025 (fact sheet; press release). This rule changes the definition of “custody” in Medicare's payment exclusion rule to improve access to care for people who have recently been released from incarceration or are on parole, probation or home detention.

Intensive Outpatient Services - Payment Rates for Partial Hospitalization Program (PHP) and Intensive Outpatient Program (IOP) Services — In the CY 2024 rule, CMS finalized several changes to align coding, billing, and payment between PHP and IOP services provided in the same settings. For CY 2025, CMS is finalizing its proposal to maintain this rate structure and update payment rates using the latest available cost information from the three latest fiscal year cost reports, as well as OPPS claims from CY 2023.

In accordance with the methodology established in CY 2024, the agency will also continue basing the payment rates for these services on the geometric mean per diem cost for days with three services and four or more services, calculated separately for Community Mental Health Centers (CMHCs) and hospital outpatient departments.  As a reminder, CMS has a specific definition of CMHC that does not align with the Ohio definition. There were no changes to allow IOP services in outpatient clinic settings.