Tag: rural emergency hospitals

CMS Seeks Comment on Rural Emergency Hospital Proposed Rule

Member News

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.

Proposal Released to Update Medicare Outpatient Prospective Payment System

Member News

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.

Member Feedback Requested on Rural Emergency Hospital Proposed Rule

Member News

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.