Tag: Vickie Kunz

MHA Comments on Medicare Fee-for-Service Proposed Rules

Member News

The MHA recently submitted comments to the Centers for Medicare and Medicaid Services (CMS) regarding the proposed rule to update the Medicare fee-for-service (FFS) inpatient rehabilitation facility (IRF) prospective payment system (PPS) for fiscal year (FY) 2024. These comments were due to the CMS June 2.

The MHA has also drafted comments regarding the FY 2024 Medicare FFS proposed rule to update the inpatient psychiatric facility (IPF) and the proposed rule to update the skilled nursing facility (SNF) PPS.  Comments on these rules are due June 5.

The CMS is expected to release final rules to update the IRF, IPF and SNF PPS around Aug. 1, for the Oct. 1, 2023, effective date. The MHA will provide members with an updated Medicare FFS impact analysis following release of the final rules.

Members with questions should contact Vickie Kunz at the MHA.

CMS Releases Medicare Wage Index Information

Member News

The Centers for Medicare & Medicaid Services (CMS) recently released the timetable and preliminary hospital data that will be used to develop the Medicare wage index for fiscal year (FY) 2025, which begins Oct. 1, 2024. The wage index is used to adjust Medicare fee-for-service payments for geographic variations in labor costs and adjusts up to 68% of the inpatient payment rate and 60% of the outpatient payment rate. The hospital wage index is also used to adjust post-acute care payments. Hospitals have until Sept. 1, 2023, to review their data and submit requests for changes to the Medicare Administrative Contractor (MAC), along with supporting documentation.

The MHA is hosting an educational webinar at 10 a.m. June 29 to assist hospitals with data reporting. The webinar is free of charge, but registration is required. The MHA will provide hospitals with comparative data from the latest CMS public use file within the next few weeks. Contract labor will have a significant impact on the FY 2025 wage index due to the workforce shortage and heavy reliance on agency staffing during the pandemic. Hospitals are encouraged to begin reviewing agency staffing invoices for cost reporting periods beginning in federal FY 2021 to ensure the information required for the MAC review process is available.

All prospective payment system hospitals are also required to submit a completed occupational mix survey to the MAC by June 30, with survey results used to adjust the wage index for FYs 2025, 2026 and 2027. The CMS is scheduled to release the preliminary survey results July 12, 2023. Resources on completing the occupational mix survey are available upon request.

Members with questions should contact Vickie Kunz at the MHA.

News to Know – May 15, 2023

Member News
  • Upon the end of the COVID-19 Public Health Emergency, the Health Resources & Services Administration (HRSA) will end a 2020 policy allowing hospitals to use 340B drugs for eligible patients in new hospital locations, even if they have not yet appeared on a filed Medicare cost report. Beginning May 11, 2023, at 11:59 PM ET, the hospital should stop purchasing and using 340B drugs for that outpatient facility that is not yet registered. More information can be found on the HRSA COVID-19 resources website. Members with questions may contact Elizabeth Kutter at the MHA.
  • The MHA is hosting the webinar MHA Programs of All-Inclusive Care for the Elderly (PACE): An Alternative to Traditional Nursing Home care from 8:30 to 9:30 a.m. May 23. Participants will learn about PACE philosophies, services provided, structure and financing and how health systems can partner with local PACE programs to support and enhance senior care. There is no cost to attend and members can register online.
  • Completed 2022 occupational mix surveys must be submitted by acute care hospitals paid under the Medicare prospective payment system to the Medicare Administrative Contractor by June 30, 2023. Hospitals are required to complete the survey every three years, with results from the 2022 survey to be used to adjust the Medicare wage index for fiscal years 2025, 2026 and 2027. Hospitals are encouraged to review their 2019 survey and determine whether there have been payroll changes, new job codes or job descriptions added, etc., to streamline the completion process. It is important to note that contact labor should be included in the various categories of the survey. Resource materials from the educational webinar hosted by the MHA in late January are available upon request. Members with questions should contact Vickie Kunz at the MHA.

Upcoming Webinars on Medicare FFS Quality-based Programs

Member News

The MHA is partnering with DataGen to host two free webinars focused on Medicare fee-for-service (FFS) quality-based programs, which can reduce hospital inpatient FFS payments by up to 6%, depending upon hospital performance. The webinars are scheduled for June 7 and June 14 at 1:30 p.m. ET.

The first webinar will review the Medicare value-based purchasing program. Due to the pandemic, the Centers for Medicare and Medicaid Services (CMS) neither penalized nor rewarded hospitals for fiscal years (FYs) 2022 and 2023, but will do so for FY 2024. The CMS withholds 2% from Medicare FFS inpatient claims, totaling approximately $1.7 billion nationally, with these funds redistributed based on performance. The latest estimates indicate 27 Michigan hospitals will be subject to a $2.8 million payment penalty for FY 2024, with 54 hospitals gaining $6.7 million. Members are encouraged to register for the value-based purchasing webinar.

The second webinar will review the Medicare readmissions reduction (RRP) and hospital acquired conditions (HAC) reduction programs. The CMS opted not to penalize hospitals under the HAC program for FY 2023, but penalties resume in FY 2024, with 25% of hospitals nationally subject to a 1% payment penalty. The RRP evaluates readmissions for six medical conditions, with hospitals subject to penalties of up to 3% that is applied to Medicare inpatient payments for all FFS discharges. The latest FY 2024 estimates indicate 66 Michigan hospitals will be subject to a $12 million RRP penalty, with 24 hospitals subject to a $9.5 million HAC penalty. Members are encouraged to register for the RRP and HAC webinar.

Hospital quality department and finance staff are encouraged to participate in these webinars, which will be recorded and available for future reference. Members with questions should contact Vickie Kunz at the MHA.

CMS Releases FY 2024 LTCH Prospective Payment System 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 for federal fiscal year (FY) 2024. When all proposed changes are considered, the rule is estimated to result in a 2.5% decrease in Medicare FFS payments. The MHA opposes this reduction given the historical inflationary increases faced by hospitals for labor, equipment, supply and drug costs. Specifically, the proposed rule would:

  • Provide a net 3.3% increase in the standard LTCH PPS rate from $46,433 to $47,948, for LTCHs that meet the CMS quality program reporting requirements. Facilities that fail to meet these requirements are subject to a two percentage point reduction to the annual update.
  • Increase the high-cost outlier (HCO) threshold for standard LTCH cases by 245% from the current $38,518 to $94,378, to achieve the target of paying roughly 8% of aggregate LTCH payments as HCO payments. This increase will result in a dramatic decrease in the number of cases qualifying for an outlier payment.
  • Pay all site-neutral cases at the site-neutral rate since the public health emergency will end May 11, resulting in ending the requirement all LTCH cases be paid based on the standard LTCH rate regardless of whether they met LTCH criteria.
  • Update the cost outlier threshold for site-neutral cases to mirror that of the proposed inpatient PPS threshold of $40,732, up 4.8% from the current $38,859.
  • Update the LTCH quality reporting program (QRP) by adopting two new measures, modifying the COVID-19 Vaccination Coverage among Healthcare Personnel measure and removing two measures.
  • Increasing the data completion threshold beginning with the FY 2026 LTCH QRP. The CMS would require LTCHs to report 100% of the required quality measure data and standardized assessment data collected using the LTCH CARE Data Set tool on at least 90% (instead of 80%) of assessments submitted to the CMS. If LTCHs fail to meet this requirement, they would be subject to a 2% point reduction to their applicable annual update.

The MHA continues to review the proposed rule and will provide hospitals with an estimated impact analysis in the near future. The MHA will share its draft comments with members when available and encourages members to provide comments to Vickie Kunz at the MHA by June 1 for consideration in the MHA’s comments. The CMS will accept comments on the proposed rule through June 9, with a final rule expected around Aug. 1, for the Oct. 1 effective date.

Members with questions should contact Vickie Kunz at the MHA.

CMS Releases FY 2024 Skilled Nursing Facility Proposed Rule

Member News

The Centers for Medicare & Medicaid Services (CMS) recently released a proposed rule to update the Medicare fee-for-service prospective payment system for skilled nursing facilities (SNF) for fiscal year (FY) 2024, beginning Oct. 1, 2023. The CMS did not propose new minimum staffing requirements for SNFs in this rule but restated the agency’s intention to propose such requirements in separate rulemaking this spring. Key provisions of the proposal include:

  • Continuation of the negative 2.3% parity adjustment to the Patient Driven Payment Model (PDPM) case mix indices following implementation of the PDPM to maintain budget neutrality with the prior RUG-IV case-mix system. The CMS finalized a two-year phase-in of the proposed 4.6% negative adjustment for FY 2023 and 2024 despite opposition from the MHA, the American Hospital Association and others.
  • A 3.7% net increase to the SNF federal per diem base rate for providers that comply with the CMS IPF quality reporting program (QRP) requirements. Facilities should note that the 3.7% net increase will be offset by the negative 2.3% parity adjustment described above.
  • A slight increase in the labor-related share from the current 70.8% to 71%.
  • Changes to the SNF QRP including:
    • Adopting one new quality measure: The Discharge Function Score (DC Function).
    • Modifying the COVID-19 Vaccination Coverage Among Health Care Personnel measure.
    • Removing three measures:
      • Application of Percent of Long-Term Care Hospitals Patients with an Admission and Discharge Functional Assessment and a Care Plan that Addresses Function.
      • The Application of the IRF Functional Outcome Measure: Change in Self-Care Score for Medical Rehabilitation Patients.
      • The Application of the IRF Functional Outcome Measure: Change in Mobility Score for Medical Rehabilitation Patients.
    • Adopting four new measures for the SNF Value-based Purchasing (VBP) program:
      • Nursing Staff Turnover Measure.
      • Discharge Function Score Measure.
      • Long Stay Hospitalization Measure per 100 residents.
      • Percent of Residents Experiencing One or More Falls with Major Injury (Long-Stay).
    • Replacing the 30-Day All Cause Readmission Measure with Within Stay Potentially Preventable Readmissions Measure.
    • Adoption of Health Equity Adjustment.

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 with SNF operations to review the proposed rule, provide comments to Vickie Kunz at the MHA by May 25 and submit comments to the CMS by June 5. The CMS is expected to release a final rule around Aug. 1, for an Oct. 1, 2023, effective date.  Members with questions should contact Vickie Kunz at the MHA.

CMS Releases FY 2024 Inpatient Psychiatric Facility Proposed Rule

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 psychiatric facilities (IPF) for fiscal year (FY) 2024, beginning Oct. 1, 2023. Key provisions of the proposal include:

  • A 3.1% net increase to the IPF federal per diem base rate for providers that comply with the CMS IPF quality reporting (QR) program requirements, resulting in a proposed rate of $892.58, up from the current $865.63.
  • A 3.1% increase to the electroconvulsive therapy (ECT) per diem payment rate from the current $372.67 to $384.27 for providers that comply with the CMS IPF QR program requirements.
  • A rebased IPF PPS market basket to use FY 2021 data instead of FY 2016.
  • An increase in the labor-related share from the current 77.4% to 78.5%.
  • A 41% increase in the outlier threshold amount from the current $24,630 to $34,750 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.
  • Modifying the excluded unit regulation to allow a hospital to open a new IPF unit and begin being paid under the IPF PPS at any time during the cost reporting period if the hospital meets certain requirements. Currently, facilities cannot attain excluded unit status in the middle of a cost reporting period.
  • Changes to the IPF QRP including:
    • Adopting four new quality measures, including one on patient experience.
    • Modifying the COVID-19 Vaccination Coverage Among Health Care Personnel measure.
    • Removing two measures:
      • Patients Discharged on Multiple Antipsychotic Medications with Appropriate Justification (HBIPS-5).
      • Tobacco Use Brief Intervention Provided or Offered and Tobacco Use Brief Intervention Provided (TOB-2/2a).
    • Adopting a data validation pilot program starting with data submitted in 2025.

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 with IPF operations to review the proposed rule, provide comments to Vickie Kunz at the MHA by May 25 and submit comments to the CMS by June 5. The CMS is expected to release a final rule around Aug. 1, for an Oct. 1, 2023, effective date.

Members with questions should contact Vickie Kunz at the MHA.

CMS Releases FY 2024 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 (IRF) for federal fiscal year (FY) 2024. Key provisions of the proposal include:

  • Rebasing the IRF market basket using data from cost reports beginning in FY 2021, instead of FY 2016 data.
  • Increasing the IRF PPS payment rate by 3.3% from $17,878 to $18,471 for IRFs that comply with the CMS IRF Quality Reporting Program (QRP) requirements. IRFs that fail to comply are subject to a two percentage point reduction.
  • Increasing the labor-related share from the current 72.9% to 74.1%.
  • Using the FY 2024 pre-floor, pre-reclassification inpatient PPS hospital wage index, with a 5% cap on any decrease to a provider’s wage index from its prior year wage index.
  • Decreasing the cost outlier threshold by nearly 23% from the current $12,526 to $9,690, to achieve the 3% target for outlier payments as compared to aggregate IRF payments, which will increase the number of cases that qualify for outlier payments.
  • Updating the IRF QRP by:
    • Modifying the COVID-19 Vaccination Coverage among Healthcare Personnel measure.
    • Adopting one new measure: The Discharge Function Score measure.
    • Removal of three existing measures:
      • The Application of Percent of Long-Term Care Hospital Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function measure (NQF #2631).
      • The IRF Functional Outcome Measure: Change in Self-Care Score for Medical Rehabilitation Patients measure (NQF #2633.
      • The IRF Functional Outcome Measure: Change in Mobility Score for Medical Rehabilitation Patients measure (NQF #2634).
    • Modifying the excluded unit regulation to allow a hospital to open a new IRF unit and begin being paid under the IRF PPS at any time during the cost reporting period if the hospital meets certain requirements rather than the current limit that only allows for payment under the IRF PPS at the beginning of a cost reporting period.

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 with IRF operations to review the proposed rule, provide comments to Vickie Kunz at the MHA by May 25 and submit comments to the CMS by June 2. The CMS is expected to release a final rule around Aug. 1, for an Oct. 1, 2023, effective date.

Members with questions should contact Vickie Kunz at the MHA.

MDHHS Releases Proposed Policy on REH Reimbursement

Member News

The Michigan Department of Health and Human Services (MDHHS) recently released a proposed policy to establish Medicaid reimbursement methodology for hospitals that convert to the new rural emergency hospital (REH) provider type. Critical access hospitals and rural hospitals with 50 or fewer beds are eligible to apply for the Medicare REH designation effective Jan. 1, 2023.

Hospitals that convert to the REH designation are required to update their enrollment and subspeciality with the MDHHS and must end date their inpatient services. Providers must notify the MDHHS via the Community Health Automated Medicaid Processing System within 35 days of any change to their enrollment information.

The MDHHS will reimburse REHs using existing Outpatient Prospective Payment System (OPPS) methodology. Critical access hospitals that convert to the REH designation will continue being paid based on the higher OPPS payment factor while others will be paid based on their current payment factor. The MDHHS updates the outpatient payment factors annually effective Jan. 1 to maintain budget neutrality following the Medicare update.

Hospitals are encouraged to review existing supplemental payment program policy to evaluate the potential impact. While the proposed policy does not provide specifics, the MHA anticipates that REHs will continue to receive outpatient Medicaid Access to Care Initiative and Hospital Rate Adjustment payments. The MHA will ask the MDHHS to clarify how the REH conversion will impact supplemental payment programs in the final policy. Hospitals are encouraged to review the proposed policy and submit comments to the MDHHS by May 10.

Members that are evaluating REH conversion are encouraged to contact Lauren LaPine at the MHA and  members with questions regarding the proposed reimbursement policy should contact Vickie Kunz at the MHA.

Required Occupational Survey Due June 30

Member News

Completed 2022 occupational mix surveys must be submitted by acute care hospitals paid under the Medicare prospective payment system to the Medicare Administrative Contractor by June 30, 2023. Hospitals are required to complete the survey every three years, with results from the 2022 survey to be used to adjust the Medicare wage index for fiscal years 2025, 2026 and 2027.

Hospitals are encouraged to review their 2019 survey and determine whether there have been payroll changes, new job codes or job descriptions added, etc., to streamline the completion process. It is important to note that contact labor should be included in the various categories of the survey.

Resource materials from the educational webinar hosted by the MHA in late January are available upon request. Members with questions should contact Vickie Kunz at the MHA.