CMS Shares Updates for Medicare Operations During Federal Shutdown

The Centers for Medicare and Medicaid Services (CMS) recently directed Medicare Administrative Contractors (MACs) to hold Medicare fee-for-service (FFS) claims for ten business days, due to the expiration of several Medicare payment provisions and the Oct. 1 federal government shutdown. This action is to prevent the need to reprocess large volumes of claims if congressional action extends payment provisions such as the low volume adjustment and the Medicare dependent hospital program. The CMS believes the temporary hold will have minimal impact on providers due to the 14-day payment floor. Providers may continue submitting claims, but payment will not be released until the hold is lifted.

The MHA confirmed that this does not impact bi-weekly Medicare FFS periodic interim payments and that Medicare Advantage payments to hospitals should not be impacted.

Several temporary telehealth waivers expired Sept. 30, resulting in statutory limitations that were in place for Medicare telehealth services prior to the COVID-19 Public Health Emergency taking effect Oct. 1 for services other than behavioral and mental health services. These include prohibition of many services provided to beneficiaries in their homes and outside of rural areas and hospice recertifications that require a face-to-face encounter. In some cases, these restrictions can impact requirements for meeting continued eligibility for other Medicare benefits.

The acute hospital-at-home program also expired on Sept. 30. The CMS instructed all hospitals with active waivers to discharge all patients or return them to the “brick and mortar” inpatient hospital setting.

The MHA will continue working with congressional delegation to minimize the impact of the shutdown on providers and will provide additional information as it becomes available.  AHA members can access the latest AHA advisory for additional details.  Members with questions may contact Vickie Kunz at the MHA.

CMS Releases FY 2026 Final Rule for Skilled Nursing Facilities

The Centers for Medicare & Medicaid Services (CMS) recently released a final rule to update the Medicare fee-for-service (FFS) prospective payment system (PPS) for skilled nursing facilities (SNFs) for fiscal year (FY) 2026. Key provisions include:

  • Increasing the per-diem federal rate by a net 3.4% after the market basket update, productivity adjustment and other adjustments. SNFs that fail to satisfy Quality Reporting Program requirements will be subject to a 2-percentage point reduction to the market basket update.
  • Updating the labor-related share of the per diem rate from 72% to 71.9%.
  • Making technical changes to the Patient-Driven Payment Model ICD-10 code mapping that assigns patients to clinical categories.
  • Removing four elements recently adopted as standardized patient assessment data elements under the social determinants of health category, including:
    • One item for living situation, two items for food and one item for utilities.
  • Removing the health equity adjustment from the SNF Value-Based Purchasing program scoring methodology beginning for the FY 2027 program year.

The MHA will provide SNFs with an updated facility-specific impact analysis and additional details on the final rule in the coming weeks. Members with questions should contact Vickie Kunz at the MHA.

CMS Releases FY 2026 Final Rule for Inpatient Rehabilitation Facilities

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

Key provisions include:

  • Increasing the IRF PPS payment rate by a net 2.45% after all adjustments, from $18,907 to $19,371. IRFs that fail to comply with the CMS IRF Quality Reporting Program (QRP) requirements are subject to a two-percentage point reduction.
  • Using FY 2024 IRF claims and FY 2023 IRF cost report data to update case mix group weights and average lengths of stay.
  • Maintaining the labor-related share at the current 74.4%.
  • Decreasing the cost outlier threshold by 16.4% from the current $12,043 to $10,062 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 to:
    • Remove the COVID-19 Vaccination Coverage Among Healthcare Personnel measure beginning with the FY 2026 payment year.
    • Remove the COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date measure by making data reporting optional beginning Oct. 1, 2025, and removing it from the IRG patient assessment instrument effective Oct. 1, 2026, the earliest feasible date.
    • Remove four standardized patient assessment data elements related to social drivers of health, including one item on living situation, two items on food security and one item on utilities.

The MHA will provide IRFs with a facility-specific impact analysis and additional details on the final rule in the coming weeks. Members with questions should contact Vickie Kunz at the MHA.

CMS Issues New Guidance on Hospital Price Transparency Requirements

The Centers for Medicare & Medicaid Services (CMS) released updated guidance May 22 related to hospital price transparency requirements under Executive Order 14221, “Making America Healthy Again by Empowering Patients with Clear, Accurate and Actionable Healthcare Pricing Information”.

The new guidance introduces significant changes to existing reporting obligations. Hospitals are now required to include actual dollar amounts for all payer-specific standard charges in their machine-readable files (MRFs), including negotiated rates that were previously allowed to be expressed as percentages or algorithms.

Hospitals may no longer use placeholder values such as “999999999” for estimated allowed amounts. Instead, they must calculate and report the average dollar amount historically received for each item or service using data from electronic remittance advice (835 transactions) from the 12 months prior to the MRF’s posting. If insufficient data exists to calculate the average, hospitals must provide a reasonable estimate along with documentation explaining the methodology used in the MRF notes section.

The MHA encourages hospitals to review their current transparency policies and assess any gaps in their publicly available MRFs.

Members with questions may contact Jim Lee at the MHA