CMS Seeks Comment on Rural Emergency Hospital Proposed Rule

The Centers for Medicare and Medicaid Services (CMS) recently released a proposed rule to obtain comment on potential Conditions of Participation (CoPs) for critical access hospitals (CAHs) and certain rural hospitals seeking to convert from their current status to be designated as a Rural Emergency Hospital (REH). REHs are a new provider type authorized by the Consolidated Appropriations Act passed Dec. 27, 2020, to address concern regarding the closure of rural hospitals across the country. This new designation provides an opportunity for CAHs and rural hospitals with 50 or fewer beds to continue providing essential services in their communities effective Jan. 1, 2023. REHs would be required to:

  • Discontinue providing acute care inpatient services.
  • Provide 24-hour emergency services, observation care and can choose to offer additional outpatient services.
  • Have an annual per patient average stay of 24 hours or less.
  • Have a transfer agreement with a Level I or II trauma center but not precluded from having agreements with Level III or IV trauma centers.

The CMS recently included payment policies related to the new REH in the 2023 Medicare outpatient prospective payment system (OPPS) proposed rule. Medicare outpatient services provided by a REH will be paid 105% of the Medicare OPPS rate with the REH also receiving a monthly facility payment. The CMS proposes a monthly payment of $268,294 for each REH in 2023, with this amount increased annually based on the hospital market basket change.

The CMS proposes that REHs may provide outpatient services that are not paid under the OPPS such as laboratory services paid under the Clinical Lab Fee Schedule (CLFS), which would be paid at the CLFS rate. REHs can also provide distinct part skilled nursing facility (SNF) services which would be paid based on the SNF prospective payment system. Services paid outside of the OPPS such as lab and SNF would not receive the additional 5% payment. The CMS also seeks input on quality measures recommended by the National Advisory Committee on Rural Health and Human Services, and additional suggested measures for the REH quality reporting program. The CMS is seeking additional comments on behavioral and mental health, rural virtual care and maternal health services.

Comments on the proposed CoP rule are due Aug. 29, while comments regarding payment provisions included in the OPPS proposed rule are due Sept. 13. The CMS is expected to release a final OPPS rule around Nov. 1. Members with questions should contact Lauren LaPine at the MHA.

Member Feedback Requested on Rural Emergency Hospital Proposed Rule

The Centers for Medicare & Medicaid Services (CMS) released a proposed rule June 30 that would establish conditions of participation (CoPs) that Rural Emergency Hospitals (REHs) must meet to participate in the Medicare and Medicaid programs. This proposed rule also includes changes to the Critical Access Hospital CoPs. Proposed payment and enrollment policies, quality measure specifications and quality reporting requirements for REHs will be included in future rulemaking. The CMS also modifies the provider agreement regulations to include REHs. The public comment period will end Aug. 29.

The MHA has been working closely with the Michigan Department of Health and Human Services (MDHHS) and the Michigan Department of Licensing and Regulatory Affairs (LARA) over the past few months to develop the licensure criteria and conversion process for eligible facilities in Michigan to convert to an REH after Jan. 1, 2023. The MHA will develop a comment letter in response to the proposed rule and share a draft with small/rural members prior to submission. To include input from Michigan hospitals eligible to convert to an REH in its comments, the MHA has created a brief survey to collect critical feedback that should be submitted by Aug. 1. Members with questions or concerns are encouraged to contact Lauren LaPine at the MHA.

Long-term Acute-care Hospital Payment System Proposed Rule Released

The Centers for Medicare & Medicaid Services (CMS) recently released a proposed rule to update the Medicare fee-for-service long-term care hospital (LTCH) prospective payment system for fiscal year (FY) 2023.  The proposed rule would:

  • Increase the standard federal rate by a net 2.8% for cases that meet LTCH criteria.
  • Continue paying site-neutral cases at the full-site neutral rate, instead of the prior 50/50 blend of LTCH and site-neutral rates.
  • Establish a cost outlier threshold of $44,182 for cases paid based on the LTCH standard rate, up 34% from the current $33,015 threshold, resulting in fewer cases qualifying for an outlier payment. The CMS adjusts this threshold annually to maintain outlier payments at the targeted 8% of aggregate LTCH payments.
  • Cap annual wage index decreases at 5%.
  • Cap annual decreases at 10% for Medicare Severity Long-term Care Diagnosis-related Group relative weights to mitigate negative impacts of significant weight decreases.
  • Seek input on strategies to improve measurement of disparities in health outcomes. Through a Request for Information, the CMS requests input on its framework to collect, stratify and report quality performance across the CMS programs including specific methods that could be used within the LTCH quality reporting program (QRP).
  • Request input on the potential inclusion of an updated healthcare-associated infection measure in the LTCH QRP. The National Healthcare Safety Network Healthcare-associated Clostridioides difficile infection (CDI) Outcome Measure would improve upon the CDI measure currently used in the LTCH QRP by using data from electronic health records.

The MHA is continuing to review the proposed rule and will provide hospitals with an estimated impact analysis soon. The association will also share its draft comments with members when available. The CMS will accept comments on the proposed rule until June 17. Members with questions should contact Vickie Kunz at the MHA.

CMS Releases FY 2023 Proposed Rule to Update Hospital IPPS

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) 2023. When all proposed changes are considered, the rule is expected to result in a net decrease due to proposed cuts to disproportionate share hospital (DSH) and other payments. The MHA considers these cuts to be unacceptable given the extraordinary inflationary environment and extreme labor and supply cost pressures that hospitals continue to experience.  The proposed rule would:

  • Reduce national DSH and uncompensated care (UCC) pool payments by $800 million. The CMS projects a UCC pool of roughly $6.5 billion to be allocated to hospitals based on audited Worksheet S-10 data from FY 2018 and FY 2019 cost reports. The CMS proposes to use a three-year average to calculate payments starting in FY 2024.
  • Eliminate payment enhancements for Medicare-dependent hospitals and low-volume hospitals absent congressional action to extend those payments beyond the Sept. 30, 2022, expiration date.
  • Provide a net 3.2% increase in the federal operating rate for hospitals that successfully participate in the inpatient quality reporting program (QRP) and are meaningful electronic health record users.
  • Increase the standard federal capital rate by 1.6% from $472.60 to $480.29.
  • Establish a cost outlier threshold of $43,214, up 39% from the current $30,988 threshold, resulting in fewer cases qualifying for an outlier payment. The CMS adjusts the threshold annually to ensure that outlier payments do not exceed the established target of 5.1% of aggregate IPPS payments.
  • Cap wage index decreases at 5%, ensuring each hospital’s wage index is at least 95% of its final wage index for the prior fiscal year. This policy would be funded by a national adjustment to the standard federal operating rate. The CMS proposes to continue the current policy that provides a wage index increase for hospitals in the bottom quartile.
  • Modify graduate medical education policy related to full-time-equivalent caps and increase flexibility for rural hospitals that participate in a rural track program.
  • Suppress several measures in the hospital value-based purchasing program and continue the special scoring methodology used for FY 2022 to ensure hospitals are neither penalized nor rewarded due to the COVID-19 public health emergency.
  • Suppress all six measures in the hospital acquired conditions (HAC) reduction program. If finalized as proposed, hospitals will not be given a measure score, a total HAC score, or a payment penalty for FY 2023.
  • Establish a publicly reported hospital designation on the quality and safety of maternity care in efforts to reduce maternal mortality and morbidity, a priority of the Biden-Harris administration. The CMS would award this designation to hospitals that report “Yes” to both questions in the Maternal Morbidity Structural Measure, previously finalized in the Hospital Inpatient QRP.
  • Seek input on ways to advance health equity. The CMS is seeking comment on key considerations to improve data collection to better measure and analyze disparities across CMS programs and policies and approaches for updating the Hospital Readmission Reduction Program to encourage providers to improve performance for socially at-risk populations.
  • Seek input on the appropriateness of a payment adjustment for FY 2023 and beyond to recognize the additional resource costs associated with acquiring surgical N95 respirators that are approved by the National Institute for Occupational Safety and Health and are wholly domestically made.

The MHA is continuing to review the proposed rule and will provide hospitals with an estimated impact analysis soon. The association will also share its draft comments with members when available. The CMS will accept comments on the proposal through June 17. Members with questions should contact Vickie Kunz at the MHA.

Proposed Rule to Update Inpatient Rehabilitation Facilities Payment for FY 2023

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 rehabilitation facilities (IRFs) for fiscal year (FY) 2023, which begins Oct. 1, 2022. Key highlights of the proposal include a/an:

  • 2.7% increase to the IRF standard federal rate for providers in compliance with the CMS IRF quality reporting program (QRP), resulting in a proposed rate of $17,698, up from the current $17,240, for IRFs that comply with the IRFQRP.
  • Update to the case mix group relative weights using updated FY 2021 claims and the most recent cost report data.
  • Permanent policy to smooth the impact of year-to-year payment reductions related to decreases in the wage index. The CMS is proposing that an IRF’s wage index for FY 2023 and subsequent years would not be less than 95% of its prior year wage index.
  • Increase in the labor-related share from the current 72.9% to 73.2%, which will increase payments for IRFs with a wage index greater than 1.0.
  • 37% increase in the outlier threshold amount from the current $9,491 to $13,038 to maintain estimated outlier payments at 3% of total estimated aggregate IRF PPS payments. This will result in fewer cases being eligible for an outlier payment.
  • Modification to existing facility payment adjustments for teaching, low-income and rural IRFs.
  • Update to the existing policy affecting displaced medical residents.
  • Solicitation of comments on expanding the current IRF transfer policy to include discharges to home health as recommended by the Office of Inspector General.
  • Requirement that IRFs collect quality data on all patients, regardless of payer, beginning Oct. 1, 2023.
  • Request for information on some quality reporting-related topics:
    • Potential inclusion of an updated healthcare-associated infection measure in the IRFQRP. The National Healthcare Safety Network Healthcare-associated Clostridioides difficile Infection Outcome Measure would use data from electronic health records.
    • Feedback on strategies to improve measurement of disparities in healthcare outcomes. The CMS requests input on its framework to collect, stratify and report quality performance data across programs, as well as specific methods the agency could use with the IRFQRP.

The MHA will review details of the proposed rule and provide IRFs with an estimated impact analysis for Medicare FFS patients soon. The CMS is accepting comments until May 31. Members with questions should contact Vickie Kunz at the MHA.

Comments Due Aug. 27 on Home Health Proposed Rule

The Centers for Medicare & Medicaid Services (CMS) recently released a proposed rule to update the Medicare fee-for-service prospective payment system for home health (HH) agencies effective Jan. 1, 2022. Key aspects of the proposal include:

  • Expanding the HH value-based purchasing model nationally to replace the pilot that began in nine states (AZ, FL, IA, MD, MA, NE, NC, TN, WA) in 2016.
  • Increasing the national, standardized 30-day HH payment rate by 5.9% from $1,901.12 to $2,013.43 for HH agencies that submit the required quality data.
  • Recalibrating the Patient-driven Groupings Model (PDGM) case-mix weights for the 432 payment groups using 2020 data.
  • Updating the HH quality reporting program to:
    • Remove the Outcome and Assessment Information Set (OASIS)-based Drug Education on All Medications Provided to Patient/Caregiver During All Episodes of Care measure.
    • Replace two claims-based measures, the Acute Care Hospitalization During the First 60 Days of Home Health (NQF #0171) measure and Emergency Department Use without Hospitalization During the First 60 days of Home Health (NQF #0173), with one claims-based measure, Home Health Within Stay Potentially Preventable Hospitalization.
  • Modifying HH aide supervision requirements to make permanent the regulatory blanket waivers related to HH aide supervision that were issued during the COVID-19 pandemic.
  • Implementing a provision of the Consolidated Appropriations Act that would allow occupational therapists to perform the initial and comprehensive patient assessment.
  • Continuing the 4.36% behavioral adjustment reduction to the standardized 30-day payment rate implemented in 2020 when the new PDGM was adopted.
  • Consistent with other recent proposed rules, the CMS included two requests for information:
    • The use of fast healthcare interoperability resources in support of digital quality measurement in quality reporting programs.
    • Closing the health equity gap on ways to attain health equity for all patients.

Members are encouraged to review the proposed rule and submit comments to the CMS by Aug. 27. The MHA will provide members with an estimated impact analysis within the next few weeks. Those with questions should contact Vickie Kunz at the MHA.

Skilled Nursing Facility Prospective Payment System Proposed Rule Released

The Centers for Medicare & Medicaid Services (CMS) released a proposed rule to update the Medicare fee-for-service prospective payment system (PPS) for skilled nursing facilities (SNFs) for fiscal year (FY) 2022, which begins Oct. 1, 2021.

Key provisions of the proposal would:

  • Increase the standard federal rate by a net 1.3% for SNFs that comply with the quality reporting program (QRP) requirements. SNFs that fail to submit data are subject to a 2 percentage point reduction in their annual update.
  • Update the diagnosis code mappings in the Patient Driven Payment Model case-mix system implemented in FY 2021.
  • Reduce the labor-related share of the federal rate from 71.3% to 70.1%.
  • Modify the denominator for the Transfer of Health Information to the Patient – Post-acute Care measure in the SNF QRP to exclude patients discharged home under the care of a home health or hospice provider and add two new quality measures beginning with the FY 2023 QRP:
    • The SNF Healthcare Associated Infection Requiring Hospitalization measure.
    • The COVID-19 Vaccination Coverage among Healthcare Personnel measure.
  • Suppress the SNF 30-Day All-cause Readmission Measure for the FY 2022 SNF value-based purchasing program year due to the public health emergency (PHE), which significantly impacted the measure and resulting performance scores.
  • Reduce the number of quarters for publicly reporting SNF QRP measures due to the PHE.

The CMS is working to make healthcare quality more transparent to consumers and providers. Included in the proposed rule is a request for input on ways to attain health equity for all patients through policy solutions as demonstrated through the adoption of the standardized patient assessment data elements (SPADEs) in the FY 2020 SNF final rule. These elements include several social determinants of health. The CMS seeks feedback on the possibility of expanding measure development and the collection of other SPADEs that address gaps in health equity in the SNF PPS. The CMS also seeks input on the potential use of Fast Healthcare Interoperability Resources in support of Digital Quality Measurement in QRPs, aligning with other quality programs where possible.

The CMS will accept comments on the proposed rule until June 7. The MHA will provide SNFs with an estimated impact analysis and summary of the proposed rule soon. Members with questions should contact Vickie Kunz at the MHA.

Comments Being Accepted on Inpatient Rehabilitation Facilities Proposed Rule

The Centers for Medicare & Medicaid Services (CMS) released a proposed rule to update the Medicare fee-for-service prospective payment system for inpatient rehabilitation facilities (IRFs) for fiscal year (FY) 2022, which begins Oct. 1, 2021.

Key provisions of the proposal would:

  • Increase the standard federal rate by 2.5% from $16,856 to $17,273 for facilities that comply with the IRF quality reporting program (QRP). Facilities that fail to comply are subject to a 2 percentage point reduction.
  • Increase the cost outlier threshold by 16% from $7,906 to $9,192, resulting in fewer cases qualifying for an outlier payment.
  • Modify the IRF QRP by:
    • Proposing the addition of the COVID-19 Vaccination Coverage among Healthcare Personnel (HCP) measure, requiring IRFs to report HCP vaccinations in their facilities.
    • Updating the denominator for the Transfer of Health Information to the Patient-Post Acute Care quality measure to exclude patients discharged home under the care of a home health or hospice provider.
    • Updating the number of quarters of data used for public reporting to account for the COVID-19 public health emergency reporting exception granted for Jan. 1 – June 30, 2020.

As it works to make healthcare quality more transparent to consumers and providers, the CMS is seeking input on ways to attain health equity for all patients through policy solutions, as demonstrated by the adoption of standardized patient assessment data elements (SPADEs). These data elements include several social determinants of health that were finalized in the FY 2020 final rule for the IRF QRP. Through a Request for Information within the proposal, the CMS is seeking comment on expanding measure development and the collection of other SPADEs that address health equity gaps. The agency also seeks feedback on its plans to define digital quality measures for the IRF QRP and the potential use of fast healthcare interoperability resources within the IRF QRP, aligning with other quality programs where possible.

The CMS will accept comments on the proposed rule until June 7. The MHA will provide IRFs with an estimated impact analysis and summary of the proposed rule within the next month. Members with questions should contact Vickie Kunz at the MHA.