Tag: proposed rule

CMS Releases Home Health PPS Proposed Rule

Member News

The Centers for Medicare and Medicaid Services (CMS) recently released a proposed rule updating the home health (HH) prospective payment system (PPS) for calendar year (CY) 2026.

Highlights of the proposed rule include:

  • A 6% rate cut from the current $2,057.35 to $1,933.61 after the net 2.4%  market basket update, an 8.3% cut due to budget neutrality requirements of the Patient-Driven Groupings Model (PDGM) and a 0.5% decrease related to outlier payments and other adjustments. Providers who fail to submit quality data are subject to an additional 2% point reduction.
  • A higher fixed-dollar loss ratio of 0.46, up from 0.35, expected to decrease outlier payments by 0.5% of total payments. The CMS proposes to maintain the existing 0.8 loss-sharing ratio.
  • Recalibration of relative weights for the PDGM using CY 2024 data.
  • Removing the face-to-face encounter restriction. Currently the CMS allows nonphysician practitioners to perform the required face-to-face encounter regardless of whether they were the certifying practitioner or previously cared for the patient. However, if a physician performed the face-to-face encounter, they were required to be the certifying physician or have previously cared for the patient. The CMS proposes to remove this restriction, allowing physicians to perform the face-to-face encounter regardless of whether they are the certifying physician or previously cared for the patient.
  • Removing the measure that assesses the percentage of patients receiving COVID-19 vaccinations from the HH quality reporting program (QRP). The proposal also requests information on changing the data submission deadline for HH QRP data, advancing digital quality measures and new measure concepts for the HH QRP.
  • Adding four new measures to the HH value-based purchasing program—Medicare Spending per Beneficiary and three measures assessing patient functional improvement in dressing and bathing.
  • New and revised provider enrollment provisions to reduce improper payments, including retroactive revocation of a provider’s Medicare enrollment such as if the beneficiary attest that the provider did not provide the service that was claimed. The CMS also proposed to deactivate an enrolled physician or practitioner’s billing privileges if they have not ordered or certified services for 12 consecutive months.
  • The CMS is collecting feedback on Executive Order 14192, “Unleashing Prosperity Through Deregulation”.

The MHA will provide members with an estimated impact analysis in the next several weeks and encourages members to contact Vickie Kunz regarding issues identified by Aug. 22. The CMS will accept comments on the HH proposed rule until Sept. 2. Members with questions should contact Vickie Kunz at the MHA.

CMS Releases FY 2026 Proposed Rule for Inpatient Rehabilitation Facilities

Member News

The Centers for Medicare & Medicaid Services (CMS) recently released a proposed rule to update the Medicare fee-for-service prospective payment system (PPS) for inpatient rehabilitation facilities (IRFs) for fiscal year (FY) 2026.

Key provisions of the proposed rule include:

  • Increasing the IRF PPS payment rate by a net 2.4% after all adjustments, from $18,907 to $19,364. IRFs that fail to comply with the CMS IRF Quality Reporting Program (QRP) requirements are subject to a two-percentage point reduction.
  • Increasing the labor-related share from the current 74.4% to 74.5%.
  • Decreasing the cost outlier threshold by 0.6% from the current $12,043 to $11,971 to achieve the 3% target for outlier payments as compared to aggregate IRF payments, decreasing the number of cases that qualify for outlier payments.
  • Changes to the IRF QRP that propose to:
    • Make optional the reporting of four standardized patient assessment data elements in the IRF Patient Assessment Instrument focused on social determinants of health beginning with Oct. 1, 2025 reporting. The items would be removed entirely by the FY 2028 IRF QRP.
    • Remove two COVID-19 vaccination measures from the IRF QRP for FY 2026.
    • Seek input on future IRF QRP measure concepts, reducing the burden of reporting patient assessment data and advancing digital quality measures in the IRF QRP.

The CMS is seeking comments on opportunities to streamline regulations and reduce administrative burdens on providers, suppliers, beneficiaries and other interested parties participating in the Medicare program.

The MHA will provide IRFs with a facility-specific impact analysis and additional details on the proposed rule in the near future. The MHA also encourages members to submit comments to the CMS by June 10 and to contact Vickie Kunz at the MHA with questions and  issues identified by May 27.

CMS Releases FY 2026 Hospital IPPS Proposed Rule

Member News

The Centers for Medicare & Medicaid Services (CMS) recently released a proposed rule to update the Medicare fee-for-service inpatient prospective payment system (IPPS) for fiscal year (FY) 2026.

The rule proposes to:

  • Increase the standard operating rate by a net 3.2%, after the 0.8% productivity cut and budget neutrality adjustments, from $6,624.39 to $6,835.47, for hospitals that successfully comply with the CMS quality reporting program and electronic health record requirements. Hospitals that do not meet the requirements for these programs are subject to a reduced annual update.
  • Increase the federal capital rate by 3.3%, from $512.14 to $528.95.
  • Decrease the cost outlier threshold by 4.1%, from $46,217 to $44,305, to maintain the target of paying 5.1% of aggregate IPPS payments as outlier.
  • Rebase and revise the labor-related share of the standardized operating rate from 67.6% to 66% for hospitals with a wage index greater than 1.0.
  • Increase disproportionate share hospital and uncompensated care (UCC) payments by $1.5 billion nationally. UCC payments will be allocated using the average of three most recent years of audited Worksheet S-10 data.
  • Add seven new Medicare-Severity (MS) Diagnosis Related Groups, while deleting six MS-DRGs, with most changes within Major Diagnostic Category 05, Diseases and Disorders of the Circulatory System.
  • Remove four measures from the Hospital Inpatient Quality Reporting Program, effective with the 2024 reporting and FY 2026 payment period:
    • COVID-19 vaccination coverage among health care personnel.
    • Hospital commitment to health equity structural measure.
    • Screening for social drivers of health.
    • Screen positive rate for social drivers of health.
  • Modify the Hybrid hospital-wide readmission and mortality measures and the stroke mortality and elective total hip and knee arthroplasty measures.
  • Update and codify the Extraordinary Circumstances Exception (ECE) policy to clarify that the CMS has discretion to grant an extension in response to an ECE request from a hospital.
  • Remove the health equity adjustment from the hospital value-based purchasing program scoring methodology beginning with the FY 2026 program.
  • Include Medicare Advantage patients in the calculation of multiple claims-based measures across several programs, including the Hospital Readmissions Reduction program, beginning with the FY 2027 program.
  • Shorten the Hospital RRP’s performance period from three years to two years. For example, FY 2027 HRRP penalties would be based on July 1, 2023 through June 30, 2025 performance.
  • Seek stakeholder comments in response to the Request for Information on opportunities to streamline regulations and reduce administrative burden on providers, suppliers, beneficiaries and other interest parties in the Medicare program.

The MHA continues to review the proposed rule and will provide hospitals with an estimated impact analysis in the next few weeks. The MHA encourages hospitals to review the proposed rule and submit comments to the CMS by June 10 and to notify Vickie Kunz at the MHA regarding questions or issues identified by May 27.

CMS Releases 2025 Physician Fee Schedule Proposed Rule

Member News

The Centers for Medicare & Medicaid Services (CMS) recently released a proposed rule to update the physician fee schedule (PFS) payment system effective Jan. 1, 2025.

The proposal would:

  • Reduce the PFS conversion factor by a net 2.8% from the current $33.29 to $32.36 after expiration of the 2.93% statutory payment increase for 2024 and a 0% conversion factor update.
  • Refine guidance regarding the complexity add-on code (G2211) for payment of evaluation and management visits.

Extend certain telehealth waivers through 2025 including:

  • Allowing providers to report enrolled practice addresses instead of home addresses when services are performed from their home.
  • Defining direct supervision to include virtual presence via audio/video real-time communications technology.
  • Revise the data reporting period and phase-in of payment reductions for clinical laboratory tests under the clinical laboratory fee schedule by updating the data reporting period to Jan. 1 – March 31, 2025.
  • Extending the phase-in of payment reductions by an additional year meaning that 2024 payments cannot be reduced below 2023 amounts and 2025-2027 payments cannot be reduced more than 15% compared to the previous year.
  • Delay implementation of the CMS’ rebased and revised Medicare economic index until future rulemaking.
  • Codify policies established in revised guidance for Medicare Part B and Part D drug inflation rebate programs and propose new and revised policies for these programs.
  • Exclude suspected anomalous spending from financial calculation for the Medicare Shared Savings Program (MSSP).
  • Add six new measures to the MSSP measure set and streamline reporting options
  • Add six new optional merit-based incentive payment system value pathways for 2025.

The MHA encourages members to contact Vickie Kunz by Aug. 30, regarding issues identified. Hospitals are encouraged to review the proposed rule and submit comments to the CMS by Sept. 9.  The CMS is expected to release a final rule around Nov. 1, for the Jan. 1, 2025, effective date.  Members with questions may contact Vickie Kunz at the MHA.

CMS Releases FY 2025 LTCH PPS Proposed Rule

Member News

The Centers for Medicare & Medicaid Services (CMS) recently released a proposed rule to update the Medicare fee-for-service (FFS) long-term care hospital (LTCH) prospective payment system (PPS) for fiscal year 2025.

Specifically, the rule proposes:

  • Increasing the standard LTCH PPS rate by a net 2.4% from $48,117 to $49,263 for LTCHs that meet the CMS quality program reporting (QPR) requirements. LTCHs that fail to meet these requirements are subject to a two percentage point reduction to the annual update.
  • Rebasing the market basket from 2017 to 2022 base year.
  • Increasing the high-cost outlier (HCO) threshold by 52% for standard LTCH cases from the current $59,873 to $90,921 to achieve the target of paying roughly 8% of aggregate LTCH payments as HCO payments. This increase will result in a decrease in the number of cases qualifying for an outlier payment.
  • Continuing to pay cases at the site neutral rate if they fail to meet LTCH criteria.
  • Updating the cost outlier threshold for site-neutral cases to the inpatient PPS threshold proposed at $49,237, up from $42,750.
  • Revising core based statistical areas as a result of the new Office of Management and Budget labor market delineations based on the 2020 Decennial Census.
  • Updating the LTCH QRP to require reporting of four new items to the LTCH Continuity Assessment Record and Evaluation (CARE) Data Set, (LCDC) social determinant of health category.
  • Modifying the Transportation assessment item.
  • Seeking responses on two requests for information:
    • Quality measure concepts for future years.
    • Future LTCH Star rating.

The MHA continues to review the proposed rule and will provide LTCHs with an estimated impact analysis in the next few weeks. The MHA encourages hospitals to review the rule and submit comments to the CMS by June 10 and to notify Vickie Kunz regarding issues identified by May 28.

Members with questions should contact Vickie Kunz at the MHA.

CMS Releases FY 25 Hospital IPPS Proposed Rule

Member News

The Centers for Medicare & Medicaid Services (CMS) recently released a proposed rule to update the Medicare fee-for-service (FFS) hospital inpatient prospective payment system (IPPS) for fiscal year (FY) 2025.

The rule proposes to:

  • Increase the standard operating rate by a net 2.6%, after budget neutrality adjustments, from $6,497.77 to $6,666.10, for hospitals that successfully comply with the CMS quality reporting program and electronic health record requirements. Hospitals that do not meet requirements for these programs are subject to a lower annual update.
  • Increase the federal capital rate by 2.5%, from $503.83 to $516.41.
  • Increase the cost outlier threshold by 15%, from $42,750, to $49,237, to maintain the target of paying 5.1% of aggregate IPPS payments as outlier. This will result in fewer cases qualifying for an outlier payment.
  • Update core based statistical areas as a result of the new Office of Management and Budget labor market delineations based on the 2020 Decennial Census.
  • Implement a separate IPPS payment for small, independent hospitals, defined as those with 100 or fewer beds that are not part of a chain organization, to voluntarily establish and maintain a six-month buffer stock of one or more of 86 essential medicines.
  • Create 10 new Medicare Severity Diagnosis Related Groups (MS-DRGs) and delete three MS-DRGs, most of which are within Major Diagnostic Category 08 (Diseases of the Musculoskeletal System and Connective Tissue) and specific to interbody spinal fusion devices.
  • Establish a new mandatory CMS Innovation Center model that would provide bundled payment for certain surgical procedures.
  • Use FY 2019, 2020 and 2021 Worksheet S-10 uncompensated care cost (UCC) data for the UCC pool allocation, which comprises 75% of Medicare disproportionate share hospital payments.
  • Add seven new measures, primarily focused on patient safety-related practices and outcomes, to the inpatient quality reporting program. Also remove five measures and modify two existing measures, including the Hospital Consumer Assessment for Healthcare Providers and Systems survey measure.
  • Increase the number of mandatory electronic clinical quality measures that hospitals must report for both the IQR and the Promoting Interoperability programs.
  • Require weekly reporting by hospitals, including critical access hospitals, of acute respiratory illness data beginning Oct. 1, 2024, on confirmed infection of COVID-19, influenza and respiratory syntactical virus among hospitalized patients, hospital capacity and limited patient demographic information, including age.
  • Change severity level designation for Z codes describing inadequate housing and housing instability from non-complication or comorbidity to complication or comorbidity for FY 2025.
  • Solicit input through requests for Information on:
    • Hospital resource usage for providing inpatient pregnancy and childbirth services to Medicare patients compared to non-Medicare patients.
    • Requirements and structure should be for a possible future obstetrical services conditions of participation.

The MHA continues its review of the proposed rule and will provide hospitals with an estimated impact analysis in the next few weeks. The MHA encourages hospitals to review the rule and submit comments to the CMS by June 10 and to notify the MHA regarding issues identified by May 24.

Members with questions should contact Vickie Kunz at the MHA.

CMS Releases FY 2025 Proposed Rule for Inpatient Psychiatric Facilities

Member News

The Centers for Medicare & Medicaid Services (CMS) recently released a proposed rule to update the Medicare fee-for-service (FFS) prospective payment system (PPS) for inpatient psychiatric facilities (IPFs) for federal fiscal year (FY) 2025.

Key provisions of the proposed rule include:

  • Increasing the Electroconvulsive Therapy (ECT) payment per treatment by 71% from $385.58 to $660.30 for IPFs that comply with IPF quality reporting program (QRP) requirements and $647.45 for IPFs that fail to report data.
  • Decreasing the IPF PPS federal per diem base rate by a net 2.3% after all adjustments, from $895.63 to $874.93. IPFs that fail to comply with the CMS IPF Quality Reporting Program (QRP) requirements would be paid using a base rate of $857.89.
  • Updating the wage index using the most recent Office of Management and Budget (OMB) statistical area delineations based on the 2020 Decennial Census.
  • Increasing the labor-related share from the current 78.7% to 78.8%.
  • Increasing the cost outlier threshold by 6% from the current $33,470, to $35,590 to achieve the 2% target for outlier payments as compared to aggregate IPF payments, decreasing the number of cases that qualify for outlier payments.
  • Maintaining the existing facility-level adjustment factors for rural location, teaching status and emergency department.
  • Changes to the IPFQR Program:
    • Adopting the 30-Day Risk-Standardized All-Cause Emergency Department (ED) Visit Following an IPF Discharge measure beginning with the FY 2027 payment determination.
    • Modifying reporting requirements to require IPFs to submit patient-level data on a quarterly basis.
  • Requesting comments on future revisions to the IPF PPS facility-level adjustment factors and development of the new standardized IPF Patient Assessment Instrument (IPF-PAI), required by the Consolidated Appropriations Act, 2023, for rate year 2028.

The MHA will provide IPFs with a facility-specific impact analysis and additional details on the proposed rule in the near future. The MHA also encourages members to submit comments to the CMS by May 28 and to contact the MHA with issues identified by May 21.

Members with questions should contact Vickie Kunz at the MHA.

CMS Releases FY 2025 Proposed Rule for Skilled Nursing Facilities

Member News

The Centers for Medicare & Medicaid Services (CMS) released a proposed rule April 3 to update the Medicare fee-for-service (FFS) prospective payment system (PPS) for skilled nursing facilities (SNFs) for federal fiscal year (FY) 2025.

Key provisions of the proposed rule include:

  • Increasing the per diem federal rate by a net 4.1% after the market basket update, productivity adjustment and other adjustments.
  • Updating the base year data used to determine the SNF market basket from 2018 to 2022.
  • Updating the wage index used under the SNF PPS to reflect data from the 2020 decennial census.
  • Increasing the labor-related share of the per diem rate from 71.1% to 71.9%.
  • Making technical revisions to the code mappings used to classify patients under the Patient Driven Payment Model (PDPM) that assigns patients to clinical categories.
  • Revising the CMS nursing home enforcement authority to allow the agency to impose multiple financial penalties on facilities with safety deficiencies.
  • Adopting four new patient assessment items related to health-related social needs with SNFs required to collect and report specific data elements related to living situation, food and utilities beginning with the FY 2027 SNF quality reporting program (QRP).
  • Modifying the patient assessment item on transportation to simplify the response options and revise the look-back period.
  • Adopting a data validation process for the SNF QRP beginning with the FY 2027 program.
  • Proposing operational updates to the SNF Value-Based Purchasing program, including policies regarding measure removal and review and corrections.
  • Updating the case mix methodology used to calculate the Total Nurse Staffing measure.
  • A Request for Information (RFI) on potential updates to the Non-Therapy Ancillary component of the PDPM.

The MHA will provide SNFs with a facility-specific impact analysis and additional details on the proposed rule in the near future. The MHA also encourages members to submit comments to the CMS by May 28 and to contact the MHA with issues identified by May 22.

Members with questions should contact Vickie Kunz at the MHA.

Updates on Medicare Advantage Enrollment & Proposed Rule

Member News

The MHA recently updated its analysis of Medicare enrollment data to reflect Medicare enrollment as a percentage of each county’s total population and the split for Medicare between traditional fee-for-service and Medicare Advantage (MA). Statewide, nearly 22% of the total population is enrolled in Medicare.

Total Medicare enrollment is approximately 2.21 million, with 60% of beneficiaries enrolled in a MA plan.  MA enrollment as a percentage of total Medicare enrollment varies by county, ranging from 43% to 75%. November enrollment spread across 49 MA plans with up to 32 plans covering beneficiaries in some Michigan counties.

The MHA recently submitted comments to the Centers for Medicare & Medicaid Services (CMS) on the 2025 MA proposed rule. The MHA continues to urge the CMS to hold MA plans accountable for complying with provisions of the 2024 MA final rule and recommend the CMS impose intermediate sanctions, civil monetary penalties or terminate contracts of noncompliant plans.

Members with enrollment questions should contact the Health Finance team at the MHA.