MHA Monday Report Sept. 12, 2022

MHA Monday Report

Healthcare Remains Michigan’s Largest Private-sector Employer Despite Pandemic Losses

The Partnership for Michigan’s Health reports healthcare directly employed nearly 572,000 Michigan residents in 2020, demonstrating that healthcare continues to be the largest private-sector employer in the state despite staffing losses attributed to the COVID-19 pandemic. The 2022 release …


Lt. Gov. Hosted at Capitol Advocacy Center


MHA Drafts Comments on 340B Provisions and REH Payment Policies


MHA Offering Basics of Case Management Boot Camp


Implicit Bias Trainings Available to Meet LARA Requirement


Webinar Explores Guidelines for Strategic Planning


Virtual Nurse Preceptor Academy Supports New Employee Training and Retention


MHA CEO Report – Time to Focus on Cybersecurity


AHA Trustee Insights Outlines Financial Turnaround and Succession Planning


Paul KeckleyThe Keckley Report

In Campaign 2022, Healthcare Voters Will Matter More

“Today begins the countdown to election day November 8: in 63 days, voters will elect 36 Governors, 30 State Attorneys General, 27 Secretaries of State, 35 US Senators, 435 US House of Representatives and State Legislators in 46 states. It’s a consequential election for the country and for its healthcare industry…

Campaigns will avoid healthcare issues other than abortion. Conceding that healthcare is expensive and access uneven, most midterm campaigns will default to partisan themes…”

Paul Keckley, Sept. 6, 2022


News to Know

  • The deadline to provide contact information in preparation for the state’s anticipated grant program to implement an Emergency Department Medication for Opioid Use Disorder program has been extended to Sept. 23.

MHA in the News

MHA CEO Brian Peters

Lt. Governor Gilchrist II Hosted at the Capitol Advocacy Center

The MHA hosted Lt. Gov. Garlin Gilchrist II Sept. 7 at the Capitol Advocacy Center to connect with hospital affiliated legislative officers and MHA staff on current priorities of the administration. The meeting provided an opportunity for MHA members to share priorities and concerns and allowed for an incredible exchange of information, ideas and solutions to the issues many hospitals and health systems are currently experiencing.

Lt. Gov. Gilchrist meets with MHA members.

Lt. Gov. Gilchrist touched on several topics, but the focus was largely on workforce and talent development, workplace violence, health disparities, access to care and rural health. Time was also spent discussing the importance of the 340B drug discount program and expanding behavioral healthcare access. The impact of having a statewide leader understand and discuss these top tier issues with MHA members is unparalleled and creates an opportunity for the MHA to carry strong momentum into the lame-duck state legislative session this fall.

The MHA and MHA members continue to advocate for important healthcare improvements to support the care of Michigan residents and communities. Partnerships with state executive officials also help to build on existing collaborations, create new spaces for improvement and protect MHA priorities.

The MHA will continue to foster opportunities to connect members with state and federal leaders, producing strong information exchanges and advocacy for healthcare priorities. Members with questions should contact Adam Carlson at the MHA.

MHA Drafts Comments on 340B Provisions and REH Payment Policies

The MHA has drafted comments in response to the Centers for Medicare and Medicaid Services (CMS) proposed rule to update the Medicare fee-for-service (FFS) outpatient prospective payment system (OPPS) for calendar year 2023. The MHA submitted comments regarding the 340B provisions in mid-August urging the CMS to:

  • Restore payment rates for 340B drugs to average sales price (ASP) plus 6%.
  • Hold all hospitals harmless for 2018-2022 claims.
  • Find new funds to restore 340B payments to ASP plus 6% with no reduction to the outpatient conversion factor.

The MHA also prepared comments in response to the proposed payment policies for rural emergency hospitals (REHs), a new hospital designation established by the Consolidated Appropriations Act, for critical access hospitals and rural prospective payment system hospitals with fewer than 50 beds.

The MHA recently posted hospital-specific estimated impact reports of the OPPS proposed rule on the hospital association reporting portal (HARP) for members to access and encourages hospitals to review the impact of the proposed rule on their operations and submit comments to the CMS by 5 p.m. Sept. 13. The CMS is expected to release a final rule to update the OPPS, including finalization of REH payment policies around Nov. 1 for the Jan. 1, 2023 effective date.

The MHA will provide an updated impact analysis following release of the final rule. Members with questions should contact Vickie Kunz at the MHA.

Proposal Released to Update Medicare Outpatient Prospective Payment System

The Centers for Medicare and Medicaid Services (CMS) recently released a proposed rule to update the Medicare fee-for-service outpatient prospective payment system (OPPS) effective Jan. 1, 2023.

The CMS notes that the agency did not rework the proposed rule to incorporate the recent Supreme Court decision to restore payments for 340B drugs. While the rule proposes to continue paying average sales price (ASP) minus 22.5% for 340B drugs, the CMS notes that the agency expects to revert to the previous policy of paying ASP plus 6%. The CMS anticipates offsetting the 340B payment increase estimated at $1.96 billion nationally by reducing the proposed conversion factor. The CMS indicated the reduced conversion factor would be $83.28, which is 1.1% lower than the current factor of $84.18.

Other provisions of the proposal include:

  • Establishing the new rural emergency hospitals (REH) model with proposals regarding payment policy, quality measures and enrollment policies
  • Exempting rural sole community hospitals (SCHs) from the site neutral clinic visit cuts and instead paying the full OPPS rate for visits provided at grandfathered off-campus hospital outpatient departments
  • Increasing the cost outlier threshold by 35% from the current $6,175 to $8,350 to maintain outlier payments at the targeted 1% of total OPPS payments, resulting in fewer cases qualifying for an outlier payment.
  • Updating the inpatient only list to remove 10 services and add eight services.
  • Implementing a permanent 5% cap on wage index decreases.
  • Adding one procedure, a lymph node biopsy or excision, to the Ambulatory Surgical Center (ASC) Covered Procedures List.
  • Requiring prior authorization for an additional service category,­ facet joint interventions, beginning dates of service on or after March 1, 2023.
  • Proposing separate payment in the ASC setting for four non-opioid pain management drugs that function as surgical supplies.
  • Continuing payment for remote behavioral health services beyond the end of the public health emergency.
  • Implementing a payment adjustment for additional costs incurred for domestically manufactured National Institute for Occupational Safety and Health (NIOSH)-approved surgical N95 respirators with payments provided biweekly as interim lump-sum payments to the hospitals and reconciled at cost report settlement.
  • Changes to the hospital outpatient quality reporting (OQR) program including:
  • Making the Cataracts: Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery (OP-31) measure voluntary rather than mandatory beginning with the 2025 reporting period and 2027 payment determination.
  • Aligning the hospital OQR program patient encounter quarters for chart-abstracted measures to the calendar year for annual payment update determinations.
  • Seeking comment on the future reimplementation of the Hospital Outpatient Volume on Selected Outpatient Surgical Procedures (OP-26) measure or the future adoption of another volume indicator as a quality measure.
  • A request for information on improving health equity.

The MHA will provide hospitals with an estimated impact analysis in the coming weeks. Comments are due to the CMS Sept. 13. The MHA will release its draft comment letter prior to the due date and encourages members to review the proposed rule and contact Vickie Kunz regarding issues identified by Sept. 2. The CMS is expected to release a final rule around Nov. 1.

MHA Podcast Explores the 340B Drug Pricing Program

The MHA released another episode of the MiCare Champion Cast, which features interviews with healthcare policy experts in Michigan on key issues that impact healthcare and the health of communities.

On this episode, Karen Cheeseman, CEO of Mackinac Straits Health System (MSHS) and Leah Heffernan, retail pharmacy director at MSHS, explain what the 340B drug pricing program is and how it benefits Michigan’s rural communities.

The federal 340B Drug Pricing Program requires that drug companies sell discounted prescription drugs to entities that provide care in underserved communities, including those in rural communities like MSHS. Those interested in helping protect 340B can visit the MHA Legislative Action Center to contact state lawmakers in a few quick steps.

Cheeseman has been with the health system for 17 years, previously serving as chief operating officer and, prior to that, chief human resource officer. She is a member of the American College of Healthcare Executives and served on both the Small and Rural Health Council and Legislative Policy Panel at the MHA. Heffernan has been with Mackinac Straits as a retail pharmacy director for three years, working daily to ensure all operations run smoothly at the system’s retail pharmacy.

This podcast is part of the statewide #MiCareMatters campaign, launched in 2017, which aims to build a network of citizens — “MiCare Champions” — who will be called upon to engage in advocacy efforts to protect access to affordable healthcare services in Michigan. It is currently available via Spotify, iTunes and SoundCloud.

For more information, visit micarematters.org. Members with questions or who would like to submit ideas for future podcasts should contact Lucy Ciaramitaro at the MHA.

Medicare Outpatient Payment Final Rule Makes Changes for 2022

The Centers for Medicare & Medicaid Services (CMS) recently released a final rule to update the Medicare fee-for-service outpatient prospective payment system (OPPS) effective Jan. 1, 2022. Provisions of the rule will:

  • Increase the civil monetary penalty (CMP) for hospitals that fail to comply with the price transparency requirements that took effect Jan. 1, 2021. The CMS is setting a minimum CMP of $300/day that will apply to smaller hospitals with a bed count of 30 or fewer and a penalty of $10/bed/day for hospitals with a bed count greater than 30, up to a maximum daily penalty of $5,500.
  • Increase the standard outpatient conversion factor by 1.7%, from $82.80 to $84.18, for hospitals that comply with the outpatient quality reporting program (QRP) requirements.
  • Implement a cost outlier threshold of $6,175, a 16.5% increase from the current threshold of $5,300.
  • Halt the elimination of the inpatient only list and add back to the list the services removed in 2021 except for CPT codes 22630 (Lumbar spine fusion), 23472 (Reconstruct shoulder joint), 27702 (Reconstruct ankle joint) and their corresponding anesthesia codes.
  • Reinstate the ambulatory surgical center (ASC) covered procedures list (CPL) criteria that were in effect in 2020 and prior years and adopt a process, beginning in March 2022, to allow an external party to nominate a surgical procedure to be added to the ASC CPL.
  • Continue the current policy of paying a reduced amount of average sales price minus 22.5% for drugs and biologicals purchased under the 340B drug discount program. The CMS will continue to exempt rural sole community hospitals, prospective payment-exempt cancer hospitals and children’s hospitals from the reduced payment policy implemented for most hospitals in 2018.
  • Make non-opioid pain management drugs and biologicals that function as a surgical supply in the ASC setting eligible for separate payment when such product is approved by the Food and Drug Administration, indicated for pain management or as an analgesic, and has a per-day cost above the OPPS drug packaging threshold.
  • Modify the hospital outpatient QRP by adopting three new measures, including the COVID-19 Vaccination Coverage Among Health Care Personnel measure in the OPPS and ASC settings, and removing two measures:
  • OP-02: Fibrinolytic Therapy Received Within 30 Minutes of Emergency Department Arrival measure.
  • OP-03: Median Time to Transfer to Another Facility for Acute Coronary Intervention measure.
  • Require mandatory reporting of the outpatient and ASC consumer assessment of healthcare providers and systems patient experience survey beginning in 2024.
  • Make several modifications to the Radiation Oncology Model and officially launch the model Jan. 1, 2022.

The CMS received input on the new Rural Emergency Hospital designation and continues to review comments; the agency will respond to the comments in future rulemaking. The CMS also received input on making reporting of health disparities based on social risk factors and race and ethnicity more comprehensive and actionable by including additional demographic data points.

The MHA will provide hospitals with an estimated impact analysis of the final rule soon. Members with questions should contact Vickie Kunz at the MHA.

Proposal Released to Update Medicare Outpatient Prospective Payment System

The Centers for Medicare & Medicaid Services (CMS) recently released a proposed rule to update the Medicare fee-for-service outpatient prospective payment system (OPPS) effective Jan. 1, 2022. Provisions of the proposed rule would:

  • Increase the standard outpatient conversion factor by 2%, from $82.80 to $84.46 for hospitals that comply with the outpatient quality reporting program (QRP) requirements.
  • Implement a cost outlier threshold of $6,100, a 15% increase from the current threshold of $5,300.
  • Codify hospital pricing transparency requirements.
  • Request information on rural emergency hospitals (REHs), which were established as a new provider type by the Consolidated Appropriations Act of 2021. REHs must have a staffed emergency department to provide services 24 hours a day 7 days per week and can provide observation care and other outpatient services. REHs must not provide acute care inpatient services, except for skilled nursing services in a distinct-part unit.
  • Maintain the inpatient only list (IPO) and add the 298 services removed from the IPO list in 2021 back to the list beginning in 2022.
  • Codify in regulation the five longstanding criteria used to determine whether a procedure or service should be removed from the IPO list.
  • Reinstate the ambulatory surgical center (ASC) covered procedures list criteria that were in effect in 2020 and prior years.
  • Continue the current policy of paying a reduced amount of average sales price minus 22.5% for drugs and biologicals purchased under the 340B drug discount program. The CMS proposes to continue to exempt rural sole-community hospitals, PPS-exempt cancer hospitals and children’s hospitals from the adjusted payment policy.
  • Modify the hospital outpatient QRP by adopting several new measures, including the COVID-19 Vaccination Coverage Among Health Care Personnel measure in the OPPS and ASC settings and removing two measures:
    • OP-02: Fibronlytic Therapy Received Within 30 Minutes of Emergency Department Arrival.
    • OP-03: Median Time to Transfer to Another Facility for Acute Coronary Intervention measure.
  • Request information from stakeholders on potential measure updates on reporting and submission requirements for the Safe Use of Opioids – Concurrent Prescribing electronic clinical quality measure in the hospital inpatient QRP.
  • Require mandatory reporting of the outpatient and ASC consumer assessment of healthcare providers and systems patient experience survey beginning in 2024.
  • Seek input on ways to make reporting of health disparities based on social risk factors and race and ethnicity more comprehensive and actionable.

The MHA encourages members to contact Vickie Kunz at the MHA to discuss questions they have before submitting comments to the CMS by Sept. 17, and to convey to the MHA by Sept. 3 any concerns identified for consideration in the association’s comments. The association will provide hospitals with an estimated impact analysis of the proposed rule within the next few weeks.

Medicare Outpatient Prospective Payment System Rule Finalized for 2021, Webinar Offered

This article was revised Dec.10 to include Jan. 5 webinar information.

The Centers for Medicare & Medicaid Services (CMS) recently released a final rule to update the Medicare fee-for-service outpatient prospective payment system (PPS) effective Jan. 1, 2021, unless otherwise noted. The final rule will:

  • Require all hospitals, including critical access hospitals, to report information about COVID-19 therapeutic inventory and usage and to report acute respiratory illness during the public health emergency (PHE) for COVID-19.
  • Increase the outpatient payment rate by a net 2.5%, from $80.79 to $82.80, for hospitals that comply with requirements of the outpatient quality reporting program.
  • Maintain the current payment policy for 340B drugs at average sales price (ASP) minus 22.5% as implemented in 2018, rather than reducing payments to ASP minus 28.7% as proposed. Rural sole-community hospitals, children’s hospitals and PPS-exempt cancer hospitals continue to be paid ASP plus 6%.
  • Require prior authorization for two additional service categories — cervical fusion with disc removal and implanted spinal neurostimulators — for dates of service July 1, 2021, and after.
  • Eliminate the inpatient-only list over three calendar years, beginning with the removal of 266 musculoskeletal-related services (including total hip arthroplasty) and 32 additional HCPCS codes in 2021.
  • Create two new comprehensive ambulatory payment classifications (C-APCs) for Level 8 Urology and Related Services (C-APC 5378) and Level 5 Neurostimulator and Related Procedures (C-APC 5465), increasing the number of C-APCs to 69.
  • Reduce the level of supervision of outpatient therapeutic services for nonsurgical extended duration therapeutic services, such as certain infusion services. The CMS stipulates general supervision for the entire service, including the initiation portion of the service, which currently requires direct supervision. The CMS also finalized its proposal to permit direct supervision for pulmonary and cardiac rehabilitation services using virtual presence of the physician through audio/video real-time communications technology, subject to clinical judgment of the supervising physician, until the latter of the end of the calendar year in which the PHE ends or Dec. 31, 2021.
  • Establish and update the methodology used to calculate the Overall Hospital Star Ratings, beginning with 2021, by adopting a simple average of measure scores and reducing the total number of measure groups from seven to five. The CMS is also increasing the comparability of star ratings by peer grouping hospitals by the number of measure groups. The CMS did not finalize its proposals related to stratification of the readmissions group by dual eligible patients.
  • Add 11 procedures to the ambulatory surgical center covered-procedures list (CPL), including total hip arthroplasty, under the standard review process. Additionally, the CMS revised the criteria used to add procedures to the CPL, which resulted in adding 267 surgical procedures to the CPL beginning in 2021.
  • Remove certain restrictions on the expansion of physician-owned hospitals that qualify as “high Medicaid facilities.”

The MHA anticipates distributing hospital-specific impact analyses in early January.  A national webinar to review the final rule and impact analysis will be available from 3 to 4 p.m. Jan. 5. The webinar is hosted by DataGen and is offered free of charge, but registration is required. Members with questions should contact Vickie Kunz at the MHA.