Tag: The Centers for Medicare and Medicaid Services

CMS Releases Final Rule to Update OPPS

Member News

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

The rule restores 340B drug payments to the default rate, generally average sales price (ASP) plus 6%, up from the previous ASP minus 22.5%, in response to the recent federal Supreme Court (SC) ruling.  The CMS notes that the agency is still evaluating how to apply the SC’s decision in the American Hospital Association (AHA) v Becerra case which ordered the CMS to restore payments. The CMS will address this in future rulemaking prior to the 2024 OPPS proposed rule.  

The MHA, along with the AHA and others, continue to urge the Court to order the CMS to promptly repay hospitals harmed by the unlawful cuts implemented in 2018 and ensure that no hospitals are not penalized.  Other provisions of the final rule include:

  • Increasing the conversion factor by a net 1.7% after budget neutrality adjustments from $84.18 to $85.59 for hospitals that comply with the CMS outpatient quality reporting (OQR) program requirements.
  • Establishing the new rural emergency hospital provider type to allow critical access hospitals and rural hospitals with less than 50 beds to continue providing essential outpatient services while eliminating inpatient services.
  • Exempting rural sole community hospitals 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 40% from $6,175 to $8,625, to maintain outlier payments at the targeted 1% of total OPPS payments, resulting in fewer cases qualifying for an outlier payment.
  • Removing 11 services from the inpatient only list and adding 8 services that were newly created by the American Medical Association Common Procedural Terminology Editorial Panel.
  • Implementing a permanent 5% cap on wage index decreases.
  • Adding four procedures to the Ambulatory Surgical Center covered procedures list.
  • Requiring prior authorization for an additional service category,­ facet joint interventions, beginning dates of service on or after July 1, 2023.
  • Continuing payment for virtual behavioral health services with an in-person service required within six months prior to the initiation of the virtual service and then annually thereafter, with exceptions made based on beneficiary circumstances. The CMS clarified that the requirement for an in-person visit within six months prior to the initial services is not required for patients who began receiving services during the public health emergency (PHE) or during the 151-day period following the end of the PHE.
  • Maintaining the current policy of providing separate payment for non-opioid pain management drugs and biologicals that function as supplies in the ASC setting.
  • Implementing a payment adjustment for 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 and reconciled at cost report settlement for cost reporting periods beginning on or after Jan. 1, 2023.
  • Creating a new G-code for dental rehabilitation services that require monitored anesthesia and the use of an operating room and assigning it to APC 5871 (Dental Procedures), effectively increasing the payment from roughly $200 to approximately $2,000.
  • Changes to the hospital 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 patient encounter quarters for chart-abstracted measures to the calendar year for annual payment update determinations.
  • Adding a targeting criterion for measure data validation.

The MHA will provide hospitals with an updated impact analysis and additional details of the rule in the coming weeks.

Members with questions should contact Vickie Kunz at the MHA.

News to Know – Week of Sept. 12

Member News
  • The Centers for Medicare and Medicaid Services recently released a final rule to update the Medicare fee-for-service inpatient prospective payment system for fiscal year 2023, which begins Oct. 1, 2022. Hospitals are invited to participate in a national webinar hosted by DataGen at 3 p.m. Sept. 14 to review key provisions of the rule and estimated impact analysis provided by the MHA. The webinar is free of charge, but registration is required.
  • 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 Drafts Comments on 340B Provisions and REH Payment Policies

Member News

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.

CMS Releases FY 2023 Final Rule to Update Hospital IPPS

Member News

The Centers for Medicare and Medicaid Services (CMS) recently released a final rule to update the Medicare fee-for-service (FFS) hospital inpatient prospective payment system (IPPS) for fiscal year (FY) 2023. The rule will:

  • Reduce disproportionate share hospital and uncompensated care pool (UCC) payments by $360 million, rather than $800 million as proposed. The CMS projects a UCC pool of roughly $6.87 billion to be allocated to hospitals based on audited Worksheet S-10 data from FY 2018 and FY 2019 cost reports. The CMS finalized its proposal to use a 3-year average to calculate UCC payments starting in FY 2024.
  • Eliminate payment enhancements for Medicare dependent hospitals (MDHs) and low-volume hospitals absent Congressional action to extend those payments which expire Sept. 30, 2022. The MHA, along with the American Hospital Association and others, continue to advocate for making the enhanced low volume hospital adjustment and MDH program permanent.
  • Provide a net 4.15% increase in the federal operating rate for hospitals that successfully participate in the inpatient quality reporting program and are meaningful electronic health record users. This is up from the proposed 3.17% net increase in response to comments received regarding the inflationary increase hospitals are facing and is the highest increase in more than two decades.
  • Increase the standard federal capital rate by 2.4% from $472.60 to $483.76, also higher than the proposed 1.6% increase.
  • Establish a cost outlier threshold of $38,859, up 25% (compared to 39% in the proposed rule) 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.
  • Establish a permanent 5% annual cap on wage index decreases.
  • Modify graduate medical education policy related to full time equivalent caps and increased flexibility for hospitals that participate in a rural track program.
  • Suppress measures in the hospital VBP and HAC reduction programs, resulting in neutral payment adjustment for FY 2023.
  • Add 10 new measures to the inpatient quality reporting (IQR) program, including two health equity measures.
  • Adopt a new “birthing friendly” designation for hospitals that attest positively to both questions in the IQR’s previously adopted Maternal Morbidity Structural Measure.

The MHA is continuing to review the final rule and will provide hospitals with an updated impact analysis in the near future. Members with questions should contact Vickie Kunz at the MHA.

Final Rule to Update Inpatient Rehabilitation Facilities Payment for FY 2023

Member News

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 inpatient rehabilitation facilities (IRFs) for fiscal year (FY) 2023, which begins Oct. 1, 2022. Key provisions of the rule include:

  • Requirement that the IRF-patient assessment instrument be completed on ALL patients, regardless of payor, beginning Oct. 1, 2024. This is delayed from the proposed Oct. 1, 2023 reporting date.
  • A 3.7% net increase to the IRF standard federal rate for providers in compliance with the CMS IRF quality reporting program, resulting in a rate of $17,878, up from the current $17,240. This increase is higher than the 2.7% proposed net increase due to comments received urging the CMS to more accurately reflect inflationary pressures experienced by IRFs and other providers.
  • Unchanged labor-related share with the CMS maintaining the current 72.9%.
  • Updated case mix group relative weights using updated FY 2021 claims and FY 2020 cost report data.
  • Permanent policy to limit annual wage index decreases to 5%.
  • A 32% increase in the outlier threshold amount from the current $9,491 to $12,526 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.
  • Codification of the existing teaching status adjustment policy for IRF closures and displaced medical residents.
  • Indication that the CMS will respond in a potential future rule to comments received regarding expansion of the IRF transfer payment policy to include patients discharged to home health.

The MHA continues to review details of the final rule and will provide IRFs with an updated impact analysis for Medicare FFS patients in the near future. Members with questions should contact Vickie Kunz at the MHA.

CMS Releases FY 2023 Inpatient Psychiatric Facility Final Rule

Member News

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 inpatient psychiatric facilities (IPFs) for fiscal year (FY) 2023, which begins Oct. 1, 2022. In response to comments received urging the CMS to recognize the inflationary pressures currently faced by IPFs and other providers, the final rule provides a 3.9% net rate increase, up from the proposed 2.9% net increase.

Key provisions of the final rule include a:

  • 3.9% increase in the IPF federal per diem base rate for providers that comply with the CMS IPF quality reporting (QR) program requirements, resulting in a rate of $865.63, up from the current $832.94.
  • 3.9% increase to the electroconvulsive therapy treatment rate from the current $358.60 to $372.67 for providers that comply with the CMS IPF QR program requirements.
  • Permanent limit of 5% for annual decreases to the wage index.
  • Slight increase in the labor-related share from the current 77.2% to 77.4%, which will increase payments for IPFs with a wage index greater than 1.0.
  • 54% increase in the outlier threshold amount from the current $16,040 to $24,630 to maintain estimated outlier payments at 2% of total estimated aggregate IPF PPS payments. This will result in fewer cases qualifying for an outlier payment.

The MHA continues to review details of the final rule and will provide IPFs with an updated impact analysis for Medicare FFS patients in the near future. Members with questions should contact Vickie Kunz at the MHA.

U.S. House Passes Advancing Telehealth Beyond COVID-19 Act

Member News

The U.S. House of Representatives passed July 27 the Advancing Telehealth Beyond COVID–19 Act to expand telehealth services by extending several telehealth flexibilities under Medicare that were initially authorized during the public health emergency relating to the COVID-19 pandemic.

Specifically, the bill allows federally qualified health centers and rural health clinics to serve as the distant site (i.e., the location of the healthcare practitioner); allows beneficiaries to receive telehealth services at any site, regardless of type or location; allows any type of practitioner to furnish telehealth services, subject to approval by the Centers for Medicare & Medicaid Services; and allows audio-only evaluation and management, and behavioral health services.

The legislation passed the House in a 416-12 vote. The entire Michigan delegation to the U.S. House voted in favor of the bill. The bill now moves to the U.S. Senate, where it likely has adequate support for passage.

For more information about the Advancing Telehealth Beyond COVID-19 Act, contact Lauren LaPine at the MHA.

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.

CMS Wage Data Revisions Due Sept. 2

Uncategorized, Member News

Hospitals are encouraged to review their preliminary wage and occupational mix data released May 23 by the Centers for Medicare and Medicaid Services (CMS) and submit any requests for changes to their Medicare Administrative Contractor by Sept. 2 since no new requests for changes will be accepted after that date.

This data is being used by the CMS to develop the fiscal year (FY) 2024 Medicare wage index which will be used to adjust up to nearly 70% of the payment amount across Medicare prospective payment systems including inpatient, outpatient and post-acute care settings effective Oct. 1, 2023. To assist hospitals in reviewing their data, the MHA distributed hospital-specific reports that included comparisons to the previous two years and to that of other hospitals in their core-based statistical area. Materials and a recording of the MHA’s educational webinar held June 29 are available upon request by contacting Crystal Mitchell at the MHA.

Hospitals are also reminded that applications for Medicare geographic reclassifications are due Sept. 1 to the Medicare Geographic Classification Review Board (MGCRB). Applications approved by the MGCRB are valid for three years, FY 2024 -2026, and can be withdrawn if needed. Applications, instructions and other information regarding hospital wage index reclassifications are available on the CMS website.

Members with other questions regarding the Medicare wage index or geographic reclassification process should contact Vickie Kunz 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.