On April 27, 2021, the Centers for Medicare & Medicaid Services (CMS) published a new proposed rule for Fiscal Year 2022 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long Term Care Hospital (LTCH[st1] [AP2] ). The proposed rule would update Medicare fee-for-service payment rates and policies for inpatient hospitals and long-term care hospitals for fiscal year (FY) 2022. Besides building on key priorities to close health care equity gaps, it is important for #medtech to note that the proposed rule also aims to support greater access to life-saving diagnostics and therapies during the public health emergency (PHE) and beyond. Additionally, the rule “seek[s] to sustain hospital readiness to respond to future public health threats, enhance the health care workforce in rural and underserved communities, and revise scoring, payment and public quality data reporting methods to lessen the adverse impacts of the pandemic and future unplanned events.”
CMS pays acute care hospitals (with a few exceptions specified in the law) for inpatient stays under the IPPS. LTCHs are paid under the LTCH PPS.
CMS has proposed approximately raising these payments by 2.8 percent for FY 2022. Other proposed changes for hospitals in the new rule include the following:
- Payment reductions for excess readmissions under the Hospital Readmissions Reduction Program.
- Payment reduction (1 percent) for the worst-performing quartile under the Hospital-Acquired Condition Reduction Program;
- Upward and downward adjustments under the Hospital Value-Based Purchasing Program.
It is important to note that although this proposed rule is for 2022, they will be basing payment rates on data from FY 2019 rather than 2020 because of the ongoing and unprecedented effects of COVID-19. They are additionally proposing continuing New Technology Add-on Payments for 14 new technologies that would have been discontinued in 2022.
In addition to raising payment rates, CMS is also seeking to alleviate strain on hospitals by repealing the requirement that a hospital report on the Medicare cost report the median payer-specific negotiated charge that the hospital has negotiated with all of its MA organization payers, by MS-DRG, for cost reporting periods ending on or after January 1, 2021. This would allow hospitals to reduce administrative duties by as much as 64,000 hours. Moreover, the CMS rule proposes the continued use of the existing market-based MS-DRG relative weight methodology through FY 2024, rather than the previously proposed methodology that was adopted for FY 2024.
As a final note, CMS is making an update to both the Medicare cost sharing payments program and the Medicare shared savings program.
For the Medicare cost sharing payments, CMS would make it mandatory for state Medicaid provider enrollment systems to include enrollments from Medicare providers serving dually eligible patients. This would be mandatory even if the provider or suppler of a type not recognized as eligible to enroll in the state Medicaid program, for the specific purpose of including processing cost sharing claims for services delivered to the dually eligible individuals. According to CMS, this change is to reduce appeal and litigation costs.
Commenting on the proposed rule is requested through June 28.
If the proposed IPPS will have an impact on your Products, contact us to get the details of the proposed rule, its impact, and how to comment on it.
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Disclaimer: The information in this blog is based on payer information which is dynamic. It is accurate at the time of posting but should not be construed to be reimbursement or legal advice. CPT® is the trademark of the American Medical Association (AMA).
Sources:
- https://www.cms.gov/newsroom/fact-sheets/fiscal-year-fy-2022-medicare-hospital-inpatient-prospective-payment-system-ipps-and-long-term-care
- https://www.federalregister.gov/documents/2021/05/10/2021-08888/medicare-program-hospital-inpatient-prospective-payment-systems-for-acute-care-hospitals-and-the
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[st1]Hyperlink the rule and not CMS. Write out abbreviations the first time.
[AP2]written out