Tag: Vickie Kunz

CMS Releases FY 2026 Final Rule for Inpatient Rehabilitation Facilities

Member News

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 Releases FY 2026 Final Rule for Inpatient Psychiatric Facilities

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) 2026.

Key provisions of the include:

  • Increasing the IPF PPS federal per diem base rate by a net 1.9% after all adjustments, from $876.53 to $892.87 for IPFs that comply with the CMS IPF quality reporting program (QRP) requirements. The rate for providers that failed to report quality data is $875.44.
  • Increasing the Electroconvulsive Therapy payment per treatment by a net 1.9% from $661.52 to $673.85 for IPFs that comply with IPF QRP requirements and $660.70 for IPFs that fail to report data.
  • Revising the labor-related share from the current 78.8% to 79%.
  • Increasing the cost outlier threshold by 3.3% from the current $38,110 to $39,360 to achieve the 2% target for outlier payments as compared to aggregate IPF payments, decreasing the number of cases that qualify for outlier payments.
  • Modifying the facility-level adjustment factors:
    • Rural adjustment from 1.17 to 1.18
    • Teaching adjustment from 0.5150 to 0.7957
  • Maintaining the 1.54 adjustment factor for IPFs with qualifying emergency departments.
  • Updating the IPFQR Program to:
    • Remove four measures beginning with the calendar year 2024 reporting period/FY 2026 payment determination:
      • Facility Commitment to Health Equity
      • COVID-19 Vaccination Coverage among Health Care Personnel
      • Screening for Social Drivers of Health
      • Screen Positive Rate for Social Drivers of Health
    • Modify the reporting period of the 30-day-Risk-Standardized All Cause Emergency Department Visit Following an Inpatient Psychiatric Facility Discharge measure (referred to as the IPF ED Visit measure) from a one year, calendar year to a two-year, fiscal year period.
  • Finalizing changes to the IPFQR program’s extraordinary circumstances exception (ECE) policy to include extensions as a type of relief that the agency may grant in response to an ECE request

The MHA will provide IPFs with an updated hospital-specific impact analysis and additional details on the final rule in the near future. Members with questions should contact Vickie Kunz at the MHA.

CMS Releases FY 2026 Hospital Inpatient Prospective Payment System Final Rule

Member News

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

Highlights of the final rule include:

  • Increasing the standard operating rate by a net 1.9%, after the 0.7% productivity cut and budget neutrality adjustments, from $6,624.39 to $6,752.61, for hospitals that successfully comply with the CMS quality reporting program and electronic health record requirements. Hospitals that do not meet requirements for these programs are subject to a reduced annual update.
  • Increase the federal capital rate by 2.3%, from $512.14 to $524.15.
  • Decrease the cost outlier threshold by 12.6% from $46,217 to $40,397 to maintain the target of paying 5.1% of aggregate IPPS payments as outlier.
  • Rebasing and revising the labor-related share of the standardized operating rate from 67.6% to 66% for hospitals with a wage index greater than 1.0.
  • Increasing disproportionate share hospital and uncompensated care (UCC) payments by approximately $2 billion nationally. UCC payments will be allocated using the average of three most recent years of audited Worksheet S-10 data.
  • Adding five new Medicare Severity Diagnosis Related Groups (MS-DRGs) while deleting six MS-DRGs, with most changes within Major Diagnostic Category 05, Diseases and Disorders of the Circulatory System.
  • Removing four measures from the Hospital Inpatient Quality Reporting Program effective with the 2024 reporting and FY 2026 payment period:
    • COVID-19 vaccination coverage among health care personnel.
    • Hospital commitment to health equity structural measure.
    • Screening for social drivers of health.
    • Screen positive rate for social drivers of health.
  • Modifying the Hybrid hospital-wide readmission and mortality measures and the stroke mortality and elective total hip and knee arthroplasty measures.
  • Updating and codifying the Extraordinary Circumstances Exception (ECE) policy to clarify that the CMS has discretion to grant an extension in response to an ECE request from a hospital.
  • Removing the health equity adjustment from the hospital value-based purchasing program scoring methodology beginning with the FY 2026 program.
  • Modifying the six measures in the Readmissions Reduction Program to include Medicare Advantage (MA) beneficiaries in the patient cohorts and shortening the applicable performance period from three years to two years. For example, FY 2027 HRRP penalties would be based on performance July 1, 2023, through June 30, 2025. The CMS did not finalize its proposal to include MA data in the calculations of aggregate payments for excess readmissions; as a result, aggregate penalties are expected to include 2% instead of 13% under the proposed update.
  • Making a technical update to the National Healthcare Safety Network healthcare associated infection measures baseline.

The MHA continues to review the final rule and will provide hospitals with an updated estimated impact analysis and rule brief in the next few weeks. Members with questions should contact Vickie Kunz at the MHA.

CMS Releases CY 26 PFS Proposed Rule

Member News

The Centers for Medicare & Medicaid Services (CMS) recently released a proposed rule to update the physician fee schedule (PFS) for calendar year (CY) 2026.

Highlights of the proposal include:

  • Implementing the one-time 2.5% statutory increase included in the One Big Beautiful Bill Act.
  • Establishing two separate conversion factors: one for qualifying alternative payment model participants (QP) and another for non-qualifying physicians and practitioners.
    • The QP conversion factor would increase by 3.8% to $33.59.
    • The non-QP conversion factor would increase by 3.6% to $33.42.
  • Modifying several telehealth waivers, including:
    • Permanently removing the frequency limitations for subsequent inpatient visits, nursing facility visits and critical care consultations.
    • Permanently adopting a definition of direct supervision to include virtual presence via audio/video real-time communications technology.
      • Does not propose to continue allowing virtual supervision of residents when the service is performed virtually across all teaching settings; this would be allowed only for services provided in non-metropolitan statistical areas.
    • Extending the ability for federally qualified health centers and rural health clinics to bill telehealth services through Dec. 31, 2026.
  • Enhancing integration of behavioral health into primary care by:
    • Clarifying that marriage and family therapists and mental health counselors can bill Medicare directly for Community Health Integration and Principal Illness Navigation Services.
    • Creating add-on codes for Advanced Primary Care Management services that complement previously established Behavioral Health Integration or psychiatric Collaborative Care Model services.
    • Proposing deletion of the HCPCS code that describes social determinants of health risk assessment and altering language to refer to “upstream drivers” of health rather than “social determinants.”
  • Using new methodologies to calculate units of Medicare Part D drugs purchased under the 340B drug pricing program that must be excluded from the calculation of Medicare drug inflation rebates beginning Jan. 1, 2026, as required under the Inflation Reduction Act of 2022. The CMS proposes a claims-based methodology that would determine which Part D drug units are 340B eligible for exclusion. The CMS seeks comments on two methodologies: a prescriber-pharmacy methodology and a beneficiary-pharmacy methodology.
  • Implementing the Ambulatory Specialty Model, a mandatory payment model within selected core-based statistical areas, focused on specialists who frequently treat beneficiaries with congestive heart failure and low back pain, to begin Jan. 1, 2027, and run through Dec. 31, 2031.
  • Establishing a MIPS performance threshold of 75 points for the 2026 performance period through the 2028 performance period, as well as adopting six new MIPS Value Pathways (MVPs) and modifying performance categories under the Quality Payment Program. The new MVPs are proposed for the following:
    • Diagnostic radiology
    • Interventional radiology
    • Neuropsychology
    • Pathology
    • Podiatry
    • Vascular surgery
  • The CMS is seeking input on Executive Order 14192, “Unleashing Prosperity Through Deregulation.”

Hospitals are encouraged to contact Vickie Kunz by Sept. 2 regarding issues identified and submit comments to the CMS by Sept. 12. The MHA will provide an impact analysis in the coming weeks. A final rule is expected early November for the Jan. 1, 2026, effective date. Members with questions should contact Vickie Kunz at the MHA.

MHA Monday Report July 21, 2025

Monday Report, Member News

CMS Releases Medicare 2026 Outpatient Prospective Payment System Proposed Rule

The Centers for Medicare & Medicaid Services (CMS) recently released a proposed rule to update the Medicare fee-for-service outpatient prospective payment system effective Jan. 1, 2026. The proposed rule: Provides a net 0.9% increase …

On Demand Webinar: Balancing the Complexities of the Healthcare Workforce in Rural Markets

MHA Endorsed Business Partner AMN Healthcare recently hosted the webinar Balancing the Complexities of the Healthcare Workforce in Rural Markets. Speakers  John Higgins, vice president of talent management, Essentia Health, …

Vaccination Resources Available for Healthcare Providers

The MHA remains committed to supporting vaccination efforts across the state by providing healthcare professionals with timely resources, updated guidance and tools to strengthen public health outreach. The state of Michigan has reported 18 measles …

MDHHS Proposes Policy Changes to Streamline Mental Health Assessments for Youth

The Michigan Department of Health and Human Services (MDHHS) recently released a proposed policy to revise the Michigan Child and Adolescent Needs and Strengths (MichiCANS) screening tool for individuals under age 21. The policy aims …

Latest AHA Trustee Insights Examines The Boards Role in Workforce Strategy

The July edition of Trustee Insights, the monthly digital package from the American Hospital Association (AHA), highlights board-level strategies for advancing leadership development, governance structure, care transformation and the use of AI in healthcare data analysis. …

Keckley Report

AMA, AHA Board Meetings this week: Shared Concerns, Divergent Positioning

“This week, two boards with much on the line in U.S. healthcare will convene:

  • The American Medical Association (AMA) Board of Trustees will meet in San Diego.
  • The American Hospital Association (AHA) Board of Trustees will meet in Nashville.

Media scrutiny: Media attention to physicians and hospitals is significant and increasing. Winning the hearts and minds of populations is complicated and expensive. Polling suggests the public trusts physicians, nurses and pharmacists more than hospitals, insurers and drug companies but concerns about affordability and institutional mistrust are mounting for all.”

Paul Keckley, July 13, 2025

MHA in the News

The MHA continued to receive media coverage during the week of July 14 about the impacts of the federal budget reconciliation bill, officially referred to as the One Big Beautiful Big Act (OBBBA). Coverage includes …

CMS Releases Medicare 2026 Outpatient 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 outpatient prospective payment system (OPPS) effective Jan. 1, 2026.

The proposed rule:

  • Provides a net 0.9% increase to the OPPS conversion factor from $89.17 to $89.96 for hospitals enrolled in Medicare before Jan. 1, 2018. The update includes a 3.2% market basket update, mandated 0.8 percentage point productivity adjustment, other budget neutrality adjustments and a 2% reduction for the 340B remedy offset (described below). Hospitals that fail to meet outpatient quality reporting program requirements are subject to an additional two-percentage point reduction.
  • Shortens the timeline for OPPS hospitals to repay the $7.8 billion received through higher payments for non-drug services in 2018-2022 due to the CMS’ budget-neutral policy that cut payments to 340B hospitals. The CMS proposes a 2% annual reduction to the OPPS conversion factor to repay the full $7.8 billion by 2031, up from the initially proposed 0.5% annual reduction over 16 years.
  • Implements a site neutral payment policy for drug administration services provided in grandfathered off-campus hospital outpatient departments. The CMS proposed to pay a physician fee schedule equivalent rate for 61 HCPCS codes assigned to drug administration ambulatory payment classifications, which equates to roughly 40% of the OPPS rate. Rural sole community hospitals are exempt from this cut.
  • Includes a new drug acquisition cost survey for all OPPS hospitals in late 2025 or early 2026 for separately payable drugs, with survey results to be used to set 2027 rates for separately payable drugs.
  • Eliminates the inpatient only (IPO) list over three years, beginning with the removal of 285 mostly musculoskeletal services in 2026, making these procedures payable in outpatient settings.
  • Decreases the outlier fixed-dollar threshold by 11.2% from the current $7,175 to $6,450.
  • Updates the Outpatient, Rural Emergency Hospital (REH) and Ambulatory Surgical Center (ASC) Quality Reporting Programs, including removing four measures related to COVID-19 vaccination of health care personnel and health equity. For the Outpatient and REH programs, the CMS proposes a new e-measure on timeliness of emergency department care and establishing requirements for REHs to report e-measures. The CMS also proposes updates to the methodology used to calculate the Overall Hospital Star Ratings that would limit any hospital in the bottom safety quartile to a maximum of four stars and in 2027, drop such hospitals one full star.
  • Updates the ASC covered procedures list to add 276 procedures plus an additional 271 procedures proposed for removal from the 2026 IPO list.
  • Requires hospitals to report payer-specific Medicare Advantage payment rates on their Medicare cost report for periods ending on or after Jan. 1, 2026. The CMS plans to use this data for a proposed fiscal year 2029 methodology change in calculating inpatient Medicare severity diagnosis related group (MS-DRG) relative weights to reflect relative market-based pricing.
  • Requires hospital to disclose detailed ranges of rates negotiated with health insurance plans (known as allowed amounts) by updating hospital price transparency regulations beginning Jan. 1, 2026, to require four new data elements. Hospitals must publish 10th-percentile, median and 90th-percentile allowed amounts (plus counts) instead of a single estimated allowed amount.
  • Revises the definition of direct supervision for cardiac rehabilitation, intensive cardiac rehabilitation and pulmonary rehabilitation services and diagnostic services (excluding service with a global surgery indicator of 010 or 090) provided to hospital outpatients to permanently allow virtual direct supervision.

The MHA will provide a hospital-specific impact analysis within the next few weeks and encourages hospitals to contact Vickie Kunz by Sept. 2, regarding issues identified. Hospitals are encouraged to review the proposed rule and its impact on operations and submit comments to the CMS by Sept. 15. The CMS is expected to release a final rule in early November for the Jan. 1, 2026 effective date. Members with questions may contact Vickie Kunz at the MHA.

CMS Releases Home Health PPS Proposed Rule

Member News

The Centers for Medicare and Medicaid Services (CMS) recently released a proposed rule updating the home health (HH) prospective payment system (PPS) for calendar year (CY) 2026.

Highlights of the proposed rule include:

  • A 6% rate cut from the current $2,057.35 to $1,933.61 after the net 2.4%  market basket update, an 8.3% cut due to budget neutrality requirements of the Patient-Driven Groupings Model (PDGM) and a 0.5% decrease related to outlier payments and other adjustments. Providers who fail to submit quality data are subject to an additional 2% point reduction.
  • A higher fixed-dollar loss ratio of 0.46, up from 0.35, expected to decrease outlier payments by 0.5% of total payments. The CMS proposes to maintain the existing 0.8 loss-sharing ratio.
  • Recalibration of relative weights for the PDGM using CY 2024 data.
  • Removing the face-to-face encounter restriction. Currently the CMS allows nonphysician practitioners to perform the required face-to-face encounter regardless of whether they were the certifying practitioner or previously cared for the patient. However, if a physician performed the face-to-face encounter, they were required to be the certifying physician or have previously cared for the patient. The CMS proposes to remove this restriction, allowing physicians to perform the face-to-face encounter regardless of whether they are the certifying physician or previously cared for the patient.
  • Removing the measure that assesses the percentage of patients receiving COVID-19 vaccinations from the HH quality reporting program (QRP). The proposal also requests information on changing the data submission deadline for HH QRP data, advancing digital quality measures and new measure concepts for the HH QRP.
  • Adding four new measures to the HH value-based purchasing program—Medicare Spending per Beneficiary and three measures assessing patient functional improvement in dressing and bathing.
  • New and revised provider enrollment provisions to reduce improper payments, including retroactive revocation of a provider’s Medicare enrollment such as if the beneficiary attest that the provider did not provide the service that was claimed. The CMS also proposed to deactivate an enrolled physician or practitioner’s billing privileges if they have not ordered or certified services for 12 consecutive months.
  • The CMS is collecting feedback on Executive Order 14192, “Unleashing Prosperity Through Deregulation”.

The MHA will provide members with an estimated impact analysis in the next several weeks and encourages members to contact Vickie Kunz regarding issues identified by Aug. 22. The CMS will accept comments on the HH proposed rule until Sept. 2. Members with questions should contact Vickie Kunz at the MHA.

MHA Monday Report June 23, 2025

Member News, Monday Report

Senate Health Policy Holds Testimony on Opioid Legislation

The Senate Health Policy Committee held testimony on legislation related to treating patients with opioid use disorders during the week of June 16. Collectively, Senate Bills 397–405 make numerous changes to improve coverage and access for Michiganders to receive …

MHA Shares Recent Medicare and Medicaid Enrollment Analysis

The MHA recently updated its analysis of Medicaid and Medicare enrollment based on May 2025 data. The analysis includes program enrollment as a percentage of each county’s total population and the split between fee-for-service and …

Recording and Materials Available from Medicare Quality Based Program Webinars

The MHA recently partnered with DataGen to host two webinars focused on the three Medicare fee-for-service (FFS) quality-based programs. These programs, mandated by the Affordable Care Act of 2010, can reduce hospital inpatient FFS payments …

MHA Guide to Behavioral Health Sites of Care Now Available

In an effort to help Michigan communities make informed decisions about where to seek behavioral healthcare services, the MHA has developed the Guide to Michigan’s Behavioral Healthcare Crisis Continuum. This material offers a broad overview of …

Michigan CNOs Convene at MHA Headquarters for Statewide Meeting

Chief nursing officers from across Michigan convened June 12 at the MHA headquarters in Okemos for a statewide, in-person meeting focused on healthcare policy, leadership and workforce safety. The meeting was led by Amy Brown, …

Latest AHA Trustee Insights Examines How Boards are Reimagining Workforce

The June edition of Trustee Insights, a monthly digital publication from the American Hospital Association, highlights how board members can support workforce planning and leverage innovation to strengthen healthcare delivery. One article outlines key questions …

Keckley Report

The May 2025 CPI Report: Good News, Bad News for Healthcare

“Last Wednesday, the Bureau of Labor Statistics issued its Consumer Price Index Report for May, 2025: “The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1% on a seasonally adjusted basis in May, after rising 0.2% in April. Over the last 12 months, the all-items index increased 2.4% before seasonal adjustment.” …

The public’s appetite to slow health spending, expose prices and costs and address the system’s waste, fraud and abuse is strong and growing. It’s certain to figure prominently in Congress’ budget negotiations and increasingly in household spending decisions.

The CPI is a lag indicator. It does not foretell the health economy of the future. That’s the discussion that’s needed.”

Paul Keckley, June 16, 2025

News to Know

MHA Endorsed Business Partner SUNRx is inviting 340B member hospitals to register for the Regional 340B Roundtable July 8 at Belterra Resort in Florence, IN.

 

MHA in the News

The Becker’s Healthcare Podcast published an episode June 16 that features MHA CEO Brian Peters joining host Scott Becker to discuss the current healthcare landscape and what the future looks like. Peters spent time discussing …

Recording and Materials Available from Medicare Quality Based Program Webinars

Member News

The MHA recently partnered with DataGen to host two webinars focused on the three Medicare fee-for-service (FFS) quality-based programs. These programs, mandated by the Affordable Care Act of 2010, can reduce hospital inpatient FFS payments by up to 6% based on performance.

The Medicare value-based purchasing (VBP) program is funded by a 2% contribution from inpatient operating payments of eligible prospective payment system hospitals with these funds, totaling approximately $1.7 billion, redistributed among hospitals nationally. Each hospital’s total performance score is determined based on four program domains, comprised of various measures. Materials and the recording of the June 11 webinar are available.

The second webinar, focusing on the Hospital Readmissions Reduction Program (RRP) and Hospital-Acquired Conditions (HAC) Reduction Programs, was also held. The RRP evaluates Medicare FFS patients with six medical conditions and penalizes hospitals for exceeding expected readmission rates. The HAC program evaluates performance on six measures and penalizes hospitals in the worst performing quartile compared to all other eligible hospitals nationally. For these two programs, hospitals can remain whole or be subject to payment penalties of up to 3% for the RRP and 1% for the HAC program, with all penalties benefiting the Centers for Medicare & Medicaid Services. Materials and the recording from the June 17 webinar are also available.

The MHA recently provided prospective payment system hospitals with the latest VBP and HAC program estimates through the hospital association reporting portal.

Members with questions should contact Vickie Kunz at the MHA.

MHA Monday Report June 2, 2025

Member News, Monday Report

MHA and DataGen to Host Upcoming Medicare Quality-Based Program Webinars

The MHA has partnered with DataGen to host two upcoming webinars focused on the Medicare fee-for-service (FFS) quality-based programs which can reduce hospital inpatient FFS payments by up to 6% based on performance. The webinars …

MHA Releases Executive Summary of Recent MDHHS Blood Lead Testing Mandate Rules

The MHA recently released an executive summary regarding the Michigan Department of Health and Human Services’ (MDHHS) adoption of new administrative rules establishing universal blood lead testing requirements for minors across the state. The goal of …

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 …

Language, Trust and Care: Reflections from the AHA Behavioral Health Workshop

I had the opportunity to attend at the end of April a Behavioral Health Workshop in New Orleans hosted by the American Hospital Association. This interactive event brought together hospital leaders, clinical teams and behavioral health professionals to co-design care

Keckley Report

The Summer of 2025 for U.S. Healthcare: What Organizations should Expect

“Last Thursday, the Make America Healthy Again Commission released its 68-page report “Making America’s Children Healthy Again Assessment” featuring familiar themes—the inadequacy of attention to chronic disease by the health system, the “over-medicalization” of patient care vis a vis prescription medicines et al, the contamination of the food-supply by harmful ingredients, and more. HHS Secretary Kennedy, EPA Administrator Zeldin and Agriculture Secretary Rollins pledged war on the corporate healthcare system ‘that has failed the public’ and an all-of-government approach to remedies for burgeoning chronic care needs. …

As MAHA promotes its agenda, Congress passes a budget and MAGA advances its anti-establishment agenda vis a vis DOGE et al, healthcare operators will be in limbo. The dust will settle somewhat this summer, but longer-term bets will be modified for most organizations as compliance risks change, state responsibilities expand, capital markets react and Campaign 2026 unfolds.

And in most households, concern about the affordability of medical care will elevate as federal and state funding cuts force higher out of pocket costs on consumers and demand for lower prices.

The summer will be busy for everyone in healthcare.”

Paul Keckley, May 27, 2025

Laura AppelMHA in the News

WLUC TV6 in Michigan’s Upper Peninsula published a story May 29 on the shortage of inpatient psychiatric beds in Michigan, placing a heavy focus on the testimony the MHA delivered May 20 before the House …