News to Know – Week of Jan. 10

Hospital staff are encouraged to participate in a national webinar hosted by DataGen to review the Medicare fee-for-service outpatient prospective payment system final rule and impact analysis for calendar year 2022. The webinar is scheduled from 3 to 4 p.m. Jan. 19 and is available free of charge; however, registration is required. The MHA plans to distribute hospital-specific impact analyses before the webinar takes place. Members with questions should contact Vickie Kunz at the MHA.

Advocacy Continues to Defend Healthcare from Harmful Federal Policies

President Joe Biden Dec. 10 signed legislation to postpone several proposed cuts in Medicare rates recently approved by Congress. The MHA and the American Hospital Association had urged lawmakers to delay the cuts that would have taken effect Jan. 1 due to the pandemic-related financial pressures healthcare providers continue to experience. Provisions in the legislation include:

  • Eliminating the 2% Medicare sequester cuts from Jan. 1 to April 1, 2022. The legislation would also reduce the cut to 1% from April 1 to June 30, 2022. Absent future legislation, the 2% cuts will take effect July 1, 2022. The package is being funded by increasing the sequester percentage in 2030.
  • Halting the 4% statutory Pay-As-You-Go (PAYGO) sequester for 2022 and adding them to the “2023 scorecard.” This will require additional advocacy with the Congress in late 2022 to eliminate these cuts again.
  • Mitigating the 3.75% payment cut to the Medicare physician fee schedule (PFS) payments finalized for calendar year 2022 by implementing a one-year 3% increase to the PFS conversion factor.
  • Delaying the Clinical Laboratory Fee Schedules cuts for one year, from Jan. 1, 2022, to Jan. 1, 2023. The requirements that certain hospital laboratories report their private payer clinical laboratory test codes, payments and volume data are also delayed.
  • Delaying implementation of the Radiation Oncology Model finalized in the 2022 Medicare outpatient prospective payment system final rule from Jan. 1, 2022, to Jan. 1, 2023.

Despite the limits on visiting Capitol Hill due to the COVID-19 pandemic, the MHA is continuing its work with the Michigan delegation using virtual connections to protect hospitals and other providers from detrimental payment cuts and other healthcare policies. Members with questions regarding payment implications should contact Vickie Kunz at the MHA, while questions regarding advocacy efforts should be addressed to Laura Appel at the MHA.

CMS Offers Open Door Forum on No Surprises Act Dec. 8

The Centers for Medicaid & Medicaid Services (CMS) Center for Consumer Information and Insurance Oversight will host a special Open Door Forum via conference call at 2 p.m. Dec. 8 to review provider requirements under the federal No Surprises Act.

Beginning Jan. 1, patients will have new billing protections when receiving emergency care, nonemergency care from out-of-network providers at in-network facilities, and air ambulance services from out-of-network providers. The new rules will limit out-of-pocket costs for patients and require continued coverage of emergency services without prior authorization regardless of whether a provider or facility is in network.

Slides for the call are available online in advance.  Participants can join the forum by dialing (888) 455-1397 and entering the Conference ID #8604468. The CMS will provide a transcript and audio recording at following the event. Members with questions may contact Vickie Kunz at the MHA.

Medicare Premiums and Deductibles Announced for 2022

The Centers for Medicare & Medicaid Services (CMS) recently announced that the Medicare Part A deductible for inpatient hospital services will increase by $72 in calendar year (CY) 2022 to $1,556. The Part A daily coinsurance amounts will be:

  • $389 for days 61-90 of hospitalization in a benefit period, up from the current $371.
  • $778 for lifetime reserve days up from the current $742.
  • $194.50 for days 21-100 of extended care services in a skilled nursing facility in a benefit period, up from the current $185.50.

The monthly Part A premium, paid by beneficiaries who have fewer than 40 quarters of Medicare-covered employment and certain people with disabilities, will increase by $28 in CY 2022 to $499.

The CMS announced that the annual deductible for Medicare Part B will increase by $30 in 2022 to $233, while the standard monthly premium for Medicare Part B will increase by $21.60 to $170.10. Members with questions should contact Vickie Kunz at the MHA.

Medicare Home Health Prospective Payment System Updated for 2022

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

  • A one-year delay, until Jan. 1, 2023, of the proposed national expansion of the HH value-based purchasing model to replace the pilot that began in nine states (Arizona, Florida, Iowa, Maryland, Massachusetts, Nebraska, North Carolina, Tennessee and Washington) in 2016.
  • A 6.9% increase to the national, standardized 30-day period payment rate HH band from $1,901.12 to $2,031.61 for HH agencies that submit the required quality data.
  • Recalibration of the Patient-driven Groupings Model (PDGM) case-mix weights for the 432 payment groups, using 2020 data.
  • Modification of the HH quality reporting program measures to:
    • Remove an OASIS-based measure: the 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 the Emergency Department Use without Hospitalization During the First 60 days of Home Health (NQF #0173) measure — with one claims-based measure — the Home Health Within Stay Potentially Preventable Hospitalization measure.
  • Continuation of the 4.36% behavioral adjustment that was implemented in 2020 when the new PDGM case-mix classification system was implemented.
  • Finalization of the proposal to make permanent the blanket waiver related to virtual supervision of home health aides that was granted temporarily for the duration of the COVID-19 pandemic.
  • Implementation of a provision of the Consolidated Appropriations Act that would allow occupational therapists to perform the initial and comprehensive patient assessment.
  • Continuation of the 4.36% payment cut to the standardized 30-day payment rate implemented in 2020 when the new PDGM was adopted.

The CMS continues to review input received on the agency’s plans to define digital quality measures for the HH quality reporting program and the potential use of fast healthcare interoperability resources in support of digital quality measurement. The MHA will provide members with an updated estimated impact analysis soon. Members with questions should contact Vickie Kunz at the MHA.

Medicare Outpatient Payment Final Rule Makes Changes for 2022

The Centers for Medicare & Medicaid Services (CMS) recently released a final rule to update the Medicare fee-for-service outpatient prospective payment system (OPPS) effective Jan. 1, 2022. Provisions of the rule will:

  • Increase the civil monetary penalty (CMP) for hospitals that fail to comply with the price transparency requirements that took effect Jan. 1, 2021. The CMS is setting a minimum CMP of $300/day that will apply to smaller hospitals with a bed count of 30 or fewer and a penalty of $10/bed/day for hospitals with a bed count greater than 30, up to a maximum daily penalty of $5,500.
  • Increase the standard outpatient conversion factor by 1.7%, from $82.80 to $84.18, for hospitals that comply with the outpatient quality reporting program (QRP) requirements.
  • Implement a cost outlier threshold of $6,175, a 16.5% increase from the current threshold of $5,300.
  • Halt the elimination of the inpatient only list and add back to the list the services removed in 2021 except for CPT codes 22630 (Lumbar spine fusion), 23472 (Reconstruct shoulder joint), 27702 (Reconstruct ankle joint) and their corresponding anesthesia codes.
  • Reinstate the ambulatory surgical center (ASC) covered procedures list (CPL) criteria that were in effect in 2020 and prior years and adopt a process, beginning in March 2022, to allow an external party to nominate a surgical procedure to be added to the ASC CPL.
  • Continue the current policy of paying a reduced amount of average sales price minus 22.5% for drugs and biologicals purchased under the 340B drug discount program. The CMS will continue to exempt rural sole community hospitals, prospective payment-exempt cancer hospitals and children’s hospitals from the reduced payment policy implemented for most hospitals in 2018.
  • Make non-opioid pain management drugs and biologicals that function as a surgical supply in the ASC setting eligible for separate payment when such product is approved by the Food and Drug Administration, indicated for pain management or as an analgesic, and has a per-day cost above the OPPS drug packaging threshold.
  • Modify the hospital outpatient QRP by adopting three new measures, including the COVID-19 Vaccination Coverage Among Health Care Personnel measure in the OPPS and ASC settings, and removing two measures:
  • OP-02: Fibrinolytic Therapy Received Within 30 Minutes of Emergency Department Arrival measure.
  • OP-03: Median Time to Transfer to Another Facility for Acute Coronary Intervention measure.
  • Require mandatory reporting of the outpatient and ASC consumer assessment of healthcare providers and systems patient experience survey beginning in 2024.
  • Make several modifications to the Radiation Oncology Model and officially launch the model Jan. 1, 2022.

The CMS received input on the new Rural Emergency Hospital designation and continues to review comments; the agency will respond to the comments in future rulemaking. The CMS also received input on making reporting of health disparities based on social risk factors and race and ethnicity more comprehensive and actionable by including additional demographic data points.

The MHA will provide hospitals with an estimated impact analysis of the final rule soon. Members with questions should contact Vickie Kunz at the MHA.

MHA Comments on Outpatient, Physician Fee Schedule Proposed Rules

The MHA submitted comments on two proposed rules for Medicare payment systems in calendar year 2022 that the Centers for Medicare & Medicaid Services recently released.

The MHA’s comments on the combined rule for the hospital outpatient and ambulatory surgical center payment systems largely focused on price transparency changes, continuing payment cuts to the 340B drug discount program, reduced payment rates for clinic visits provided at grandfathered off-campus hospital outpatient departments, and restoration of the inpatient only list.

The association’s comments on the Medicare Physician Fee Schedule (MPFS) rule focused on a few key issues, including the MPFS conversion factor, appropriate use criteria, telehealth services, electronic prescribing of controlled substances for Part D drugs and closing the health equity gap.

Members with questions regarding the outpatient and ambulatory surgical center rule should contact Vickie Kunz and questions about the MPFS rule should be directed to Renée Smiddy.

Registration Required for Sept. 20 Launch of OBRA Electronic System

MHA members are encouraged to complete registration for the new electronic system that will be used to complete required Omnibus Budget Reconciliation Act (OBRA) forms 3877 and 3878 beginning Sept. 20. The new electronic system will replace the current paper process for completing forms 3877 and 3878, which are required for discharging certain patients from an inpatient hospital to post-acute care settings. Note that Microsoft Edge and Google Chrome are the suggested browsers for this system.

Hospitals should ensure that the skilled nursing facilities and other post-acute facilities to which they commonly discharge patients are aware they must register and that the date the system will go live is quickly approaching.

When registering, users must submit a letter requesting access to the OBRA electronic system on their organization’s letterhead. The OBRA office provided a sample letter to assist in the process. In addition, the Michigan Department of Health and Human Services OBRA office has released several training modules for the system.

The MHA has convened a work group since January to identify issues and provide input to the OBRA office. The final work group meeting is scheduled for Oct. 1, after the system is live. Members with specific questions should contact the OBRA office. General questions should be directed to Vickie Kunz at the MHA.

Registration Open for Completing OBRA Forms Electronically

The electronic system that will be used to complete required Omnibus Budget Reconciliation Act (OBRA) forms 3877 and 3878 will go live Sept. 20. The new electronic system will replace the current paper process for completing the forms, which are required for discharging certain patients from an inpatient hospital to post-acute care settings.

The MHA encourages users to complete registration for the system as soon as possible. Note that Microsoft Edge and Google Chrome are the suggested browsers for this system. The Michigan Department of Health and Human Services OBRA office has released several training modules and the OBRA coordinator list to assist in transitioning to the electronic process.

The MHA continues to convene a workgroup to identify issues and provide input to the OBRA office. Members with specific questions should contact the OBRA office directly. General questions should be directed to Vickie Kunz at the MHA.

Inpatient Prospective Payment System Final Rule Released for FY 2022

The Centers for Medicare & Medicaid Services (CMS) recently released a final rule to update the Medicare fee-for-service hospital inpatient prospective payment system for fiscal year (FY) 2022. Provisions of the final rule take effect Oct. 1, 2021, unless otherwise noted. Included in the rule are provisions that will:

  • Repeal the requirement that hospitals report the median payer-specific negotiated rate for inpatient services by Medicare severity diagnosis-related group (MS-DRG) for Medicare Advantage plans on the Medicare cost report for periods ending on or after Jan. 1, 2021. The CMS is also repealing the market-based MS-DRG relative weight methodology it had planned to implement in FY 2024 and will continue using the existing cost-based methodology.
  • Provide hospitals with a neutral score for the FY 2022 Value-based Purchasing (VBP) program due to suppressing many of the measures impacted by the public health emergency (PHE). The CMS also finalized a measure suppression policy for certain measures in the Readmissions and Hospital-acquired Conditions (HAC) Reduction programs impacted by the PHE. Unlike the FY 2022 VBP program, hospitals will be scored for the FY 2022 Readmissions and HAC Reduction programs using the remaining measures.
  • Extend the New COVID-19 Treatments Add-on Payment for certain eligible products through the end of the fiscal year in which the PHE ends and provide a one-year extension of the Technology Add-on Payments for 13 technologies that otherwise would be discontinued in FY 2022.
  • Provide a net 2.7% increase to the standard operating rate, after budget neutrality, for hospitals that comply with the CMS quality reporting program (QRP) requirements and a 1.4% increase in the federal capital rate. Hospitals that fail to comply with the QRP or electronic health record (EHR) meaningful use requirements are subject to a lower operating rate update.
  • Increase the cost outlier threshold by 6.6% from the current $29,064 to $30,988, resulting in fewer cases qualifying for an outlier payment.
  • Decrease the Medicare uncompensated care pool by approximately $1.1 billion, resulting in a pool of roughly $7.2 billion that would be distributed using Worksheet S-10 data from FY 2018 cost reports.
  • Adopt five new measures in the hospital inpatient QRP, most notably the COVID-19 Vaccination Coverage Among Health Care Personnel (HCP) and adoption of practices to reduce maternal morbidity. These two measures must be reported starting Oct. 1, 2021, and will impact FY 2023 payment determinations.
  • Remove three measures from the inpatient QRP beginning with the FY 2026 payment determination:
    • Exclusive Breast Milk Feeding (PC-05) (NQF #0480).
    • Admit Decision Time to Emergency Department Departure Time for Admitted Patients (ED-2) (NQF # 0497). 
    • Discharged on Statin Medicaid electronic clinical quality measure (STK-06) (NQF #0439).
  • Continue the EHR reporting period of a minimum of any continuous 90-day period for new and returning eligible hospitals for calendar years 2022 and 2023 and increasing it to a minimum of any continuous 180-day period for calendar year 2024.

The CMS had proposed to implement several provisions of the Consolidated Appropriations Act, including its requirement for 1,000 new Medicare-funded medical residency positions over five years; however, due to the number and nature of comments received, the agency will address those provisions in future rulemaking. In addition, the agency had proposed to codify into Medicare regulations some longstanding Medicare organ acquisition payment policies but will also address those regulations in future rulemaking.

The MHA will provide hospitals with an updated impact analysis of the final rule soon. Members with questions should contact Vickie Kunz at the MHA.