Applied Policy

CMS Proposes FY 2023 Payment Policies for Hospitals, Increasing Payment, Capping Wage Index Decreases, and Promoting Maternal Health (CMS-1771-F)

CMS Proposes FY 2023 Payment Policies for Hospitals, Increasing Payment, Capping Wage Index Decreases, and Promoting Maternal Health (CMS-1771-F)

[vc_row full_width=”stretch_row” gap=”35″][vc_column][vc_column_text]On August 1, the Centers for Medicare & Medicaid Services (CMS) issued the fiscal year (FY) 2023 final Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System rule. See the press release here. CMS has provided a rule overview fact sheetand maternal health fact sheet relating to the establishment of a hospital designation to capture maternity care quality and safety. This rule finalizes the following:

  • Increases hospital operating payment rates by 4.3 percent;[1]
  • Decreases uncompensated care (UC) payments by approximately $318 million from FY 2022,
  • Calculates disproportionate share hospital (DSH) payments from the two most recent years of UC cost data,
  • Does not revise the DSH Medicaid fraction numerator definition associated with section 1115 demonstration patient days,
  • Adds a 5 percent wage index decrease cap,
  • Delays application of three-way severity split for MS-DRGs,
  • Changes GME cap calculations and adds rural health track flexibility,
  • Adopts a birthing friendly hospital designation,
  • Includes changes to quality reporting, promoting interoperability, and value-based purchasing programs,
  • Finalizes four new technologies for add-on payments,
  • Continues COVID-19 and seasonal influenza reporting requirements,
  • Makes no changes to organ acquisition payment policies; and
  • Increases long-term care hospital payments by $71 million.

This final rule is scheduled to be published in the Federal Register on August 10, 2022, and is effective October 1, 2022.

CMS FINALIZES 4.3 PERCENT INCREASE IN HOSPITAL PAYMENTS

For FY 2023, CMS finalizes a 4.3 percent increase (compared to a 2.5 increase in FY 2022) in operating payment rates for hospitals that submitted quality data and were meaningful electronic health record (EHR) users. This is an increase from CMS’s proposed 3.2 percent update for FY 2023. This increase is due to the use of more recently available data that reflects a market basket percentage increase of 4.1 percent, reduced by a 0.3 percentage point productivity adjustment and increased by a 0.5 statutory percentage adjustment.

Overall, CMS estimates that IPPS payments will increase by $1.4 billion in FY 2023, as compared to FY 2022. This is generally due to:

  • A combined $2.4 billion increase in FY 2023 operating payments, which includes UC payments and supplemental payments, and
  • A combined $1.0 billion decrease due to estimated changes in new technology add-on payments, GME weighting methodology changes, the expiration of the low-volume payment adjustment, and FY 2023 capital payments.

CMS will return to its historical practice of using the most recent available data for FY 2023 rate setting, using FY 2021 MedPAR claims and FY 2020 cost reports for FY2023 rate setting.[2]

Operating Payments

Table 1. Finalized Update Factors for Hospital Operating Payment Rates (FY 2023)[3]

Submitted Quality Data Meaningful EHR User Gross FY2023 Market Basket Adjustment for Failure to Submit Quality Data Adjustment for Failure to be Meaningful EHR User Multifactor Productivity Adjustment MACRA Documentation & Coding Adjustment Net Increase in Operating Payment Rates
Yes Yes +4.1 N/A N/A -0.3 +0.5 +4.3
No Yes +4.1 -1.025 N/A -0.3 +0.5 +3.275
Yes No +4.1 N/A -3.075 -0.3 +0.5 +1.225
No No +4.1 -1.025 -3.075 -0.3 +0.5 +0.2

Table 2. Resulting Standardized Operating Amounts (FY 2023)[4]

Submitted Quality Data Meaningful EHR User Standardized Operating Amounts
(Wage Index > 1)		 Standardized Operating Amounts
(Wage Index <= 1)
Labor Non-Labor Labor Non-Labor
Yes Yes $4,310.00 $2,065.74 $3,952.96 $2,422.78
No Yes $4,267.44 $2,045.34 $3,913.92 $2,398.86
Yes No $4,182.32 $2,004.54 $3,835.85 $2,351.01
No No $4,139.76 $1,984.15 $3,796.82 $2,327.09

Capital-Related Payments

The basic methodology for determining capital payments for each discharge is below:

  • Capital-Related Payment = (Standard Federal Rate) x (DRG Weight) x (Geographic Adjustment Factor or GAF) x (COLA for hospitals located in Alaska and Hawaii) x (1 + Capital DSH Adjustment Factor + Capital IME Adjustment Factor, if applicable)[5]

For FY 2023, the capital standardized Federal Rate is $483.76,[6] which is 0.6 percent more than FY 2022.

Outlier Payments

CMS finalizes its methodology as proposed with modifications to calculate the outlier threshold. CMS finalizes its proposal to use charge inflation factors and adjusted cost-to-charge ratio (CCR) factors derived from the two years prior to the COVID-19 Public Health Emergency (PHE) (FY 2018 and FY 2019 claims data).

However, in response to comments urging changes to offset substantial increases in the proposed outlier threshold of $43,214, CMS will average two fixed-loss thresholds: one using FY 2021 claims data including COVID-19 cases that reflect CARES Act payment increases, and the other using FY 2021 claims data excluding COVID-19 cases.

Using this methodology, CMS finalizes a final fixed-loss threshold of $38,859 for FY 2023.

CMS TO CALCULATE DSH PAYMENTS FROM TWO YEARS OF DATA

Hospitals that receive Medicare disproportionate share hospital (DSH) currently receive two separate payments:

  1. 25 percent of the amount they previously would have received under Section 1886(d)(5)(F) of the Social Security Act (Act) for DSH; and
  2. An additional payment for UC as determined by the product of three factors:
  • Factor 1: 75 percent of the payments that would otherwise be made under Section 1886(d)(5)(F) of the Act,
  • Factor 2: 1 minus the percent change in the percent of individuals who are uninsured; and
  • Factor 3: a hospital’s UC amount relative to all DSH hospitals expressed as a percentage.

To calculate Factor 2, CMS finalizes its proposal to continue using uninsured estimates from their Office of the Actuary (OACT) for FY 2023. As proposed, CMS finalizes a Factor 2 of 65.71, based on OACT uninsured estimates.

To calculate Factor 3, CMS finalizes its proposal to use the two most recent years of data on UC costs from Worksheet S-10 of hospitals’ FY 2018 and FY 2019 cost reports. For FY 2024 and thereafter, CMS finalizes its proposal to use the three most recent years of Worksheet S-10 data.

CMS will distribute roughly $6.87 billion in UC payments for FY 2023, a decrease of approximately $318 million from FY 2022.

Section 1115 Demonstration Days

In consideration of significant comments received, CMS will not move forward with its proposal to include only certain days associated with section 1115 demonstrations for purposes of DSH adjustment. CMS however expects to revisit this issue in future rulemaking.

Indian Health Services and Tribal Uncompensated Care Costs

For FY 2023 and subsequent years, CMS finalizes its proposal to discontinue using low-income insured days as to calculate uncompensated care costs for Indian Health Services and tribal hospitals. In recognition of the financial challenges this policy will impose, CMS will establish a new supplemental payment for these hospitals. This proposal is not budget neutral, and CMS estimates that this policy will increase Medicare spending by approximately $96 million for FY 2023.

CMS FINALIZES PERMANENT CAP ON WAGE INDEX DECREASES

Beginning FY 2023 and thereafter, CMS finalizes its proposal to make permanent a 5 percent cap on any wage index decrease from the prior year, regardless of the reason for the decrease, consistent with other care settings, including, including skilled nursing facilities, hospices, inpatient rehabilitation facilities, and inpatient psychiatric facilities.

For FY 2023, CMS will continue the low wage index hospital policy that was initially adopted in FY 2020 in a budget neutral manner through an adjustment applied to hospital standardized amounts.[7] This policy and its related budget neutrality adjustment are currently being litigated in the case, Bridgeport Hospital, et al., v. Becerra, No. 1:20-cv-01574 (D.D.C.). There, the district court found that the Department of Health and Human Services (HHS) Secretary lacked the authority to adopt a low wage index hospital policy. CMS notes that the district court’s decision is not final, and the agency is finalizing this policy as proposed.

CMS is not finalizing its proposal to exclude hospitals that reclassified from urban to rural areas[8] from the rural floor calculation and from the calculation of the “the wage index for rural areas in the State in which the county is located[.]”[9] This is in response to several comments received along with the district court’s decision in Citrus HMA, LLC, d/b/a Seven Rivers Regional Medical Center v. Becerra. Instead, CMS will calculate the rural floor as it was calculated before FY 2020, to include wage data of these hospitals[10] as well as the “wage index for rural areas in the State in which the county is located” calculation.

CMS FINALIZES DELAY IN APPLICATION OF THREE-WAY SEVERITY SPLIT FOR MS-DRGs

In the FY 2021 IPPS/LTCH PPS Final Rule, CMS expanded the existing criteria for creating a new complication or comorbidity (CC) or major complication or comorbidity (MCC) subgroups within a base MS-DRGs. CMS finalized a policy to include NonCC subgroup for a three-way severity level split (CC,MCC, and NonCC).

Due to the ongoing public health emergency (PHE), CMS proposed to delay the implementation of the three-way split criteria. Based on comments received, CMS is finalizing their proposal to delay the implementation of the three-way severity level split until FY 2024 or later. CMS did not propose any new MS-DRGs and the number remains 767 for FY 2023.

CMS FINALIZES CHANGES TO GME CAPS AND FLEXIBILITY FOR RURAL HOSPITALS

In 2021, the United States District Court for the District of Columbia ruled in Milton S. Hershey Medical Center, et al. v. Becerra that CMS needed to modify how it calculates Medicare Graduate Medical Education (GME) full-time equivalent (FTE) caps.[11] After reviewing this court case’s statutory language, CMS proposed modifying the policy prospectively for all teaching hospitals and retrospectively for specific providers and cost years, retroactive to 2001.

CMS is finalizing its proposal that effective for cost reporting periods beginning on or after October 1, 2001, that if a hospital’s unweighted number of FTE residents surpasses the FTE cap, and the number of weighted FTE residents also exceeds the FTE cap, that primary care and obstetrics and gynecology weighted FTE numbers and other weighted FTE numbers are adjusted so that the total weighted FTE number equals the FTE cap. If the number of weighted FTE residents does not exceed the FTE cap, then the allowable weighted FTE count for direct GME payment is the actual weighted FTE count. CMS estimates that the impact of this change for FY 2023 will be approximately $170 million.[12]

CMS also finalizes its proposal, without modification, that eligible urban and rural hospitals may enter rural track Medicare GME affiliation agreements effective with the July 1st, 2023 academic year.

CMS ADOPTS “BIRTHING-FRIENDLY” HOSPITAL DESIGNATION

On December 7, 2021, the White House released a Call to Action announcing the establishment of “birthing-friendly” hospital designation. The provisions of this final rule include details on how CMS plans to establish this designation.[13],[14]

The birthing-friendly designation is intended to be awarded to hospitals that participate in a program aimed at improving maternal health outcomes; therefore, allowing patients to choose hospitals that show a commitment to safe maternal health. Beginning Fall 2023, the hospital designation will be publicly reported on a CMS website.

The finalized designation is the first ever hospital quality designation specifically focused on maternal health in the Hospital Inpatient Quality Reporting (IQR)  Program’s Maternal Morbidity Structural measure.

The Maternal Morbidity Structural measure was adopted in fiscal year 2022 and it is a performance measure that assesses whether or not a hospital participates in a statewide or a national perinatal quality improvement collaborative initiative and implements patient safety practices.[15] For now, the designation will solely be based on data from hospitals that report “yes” to the Maternal Morbidity Structural measure.

Many commenters did not support the proposed designation as currently proposed, believing that the attestation of participation in a perinatal quality improvement collaborative is not a sufficient way to demonstrate hospital maternity care quality. In its response to comments, CMS acknowledges that the finalized designation is simply a first step in advancing maternal health equity and that the agency fully intends to propose a more robust set of criteria for awarding the “birthing-friendly” designation in future rulemaking.

CMS FINALIZES CHANGES TO QUALITY REPORTING, PROMOTING INTEROPERABILITY, AND VALUE-BASED PURCHASING PROGRAMS

CMS Adopts New Measures for the Inpatient Quality Reporting Program

The IQR Program reduces payment to hospitals that do not meet the program requirements. Hospitals that do not meet the requirements or fail to submit quality data are subject to a reduction in their annual payment update. For FY 2023, CMS is adopting ten new quality measures:

  • Hospital Commitment to Health Equity (CY 2023 reporting period/FY 2025 payment determination);
  • Screening for Social Drivers of Health (voluntary reporting for the CY 2023 reporting period and mandatory reporting for the CY 2024 reporting period/FY 2026 payment determination);
  • Screen Positive Rate for Social Drivers of Health (voluntary reporting for the CY 2023 reporting period and mandatory reporting for the CY 2024 reporting period/FY 2026 payment determination);
  • Cesarean Birth electronic clinical quality measure (eCQM) (inclusion in the measure set beginning with the CY 2023 reporting period/FY 2025 payment determination, and mandatory reporting for the CY 2024 reporting period/FY 2026 payment determination);
  • Severe Obstetric Complications eCQM (inclusion in the measure set beginning with the CY 2023 reporting period/FY 2025 payment determination, and mandatory reporting for the CY 2024 reporting period/FY 2026 payment determination);
  • Hospital-Harm—Opioid-Related Adverse Events eCQM (CY 2024 reporting period/FY 2026 payment determination);
  • Global Malnutrition Composite Score eCQM (CY 2024 reporting period/FY 2026 payment determination);
  • Medicare Spending Per Beneficiary (MSPB) Hospital (FY 2024 payment determination);
  • Hospital-Level, Risk Standardized Patient-Reported Outcomes Performance Measure Following Elective Primary Total Hip Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) (beginning with two voluntary periods, followed by mandatory reporting for the reporting period which runs from July 1, 2025 through June 30, 2026, impacting the FY 2028 payment determination); and
  • Hospital-Level Risk-Standardized Complication Rate (RSCR) Following Elective Primary THA/TKA(FY 2024 payment determination).

CMS is also refining two current measures beginning with the FY 2024 determination:

  • Hospital‐Level, Risk‐Standardized Payment Associated with an Episode-of-Care for Primary Elective THA/TKA; and
  • Excess Days in Acute Care (EDAC) After Hospitalization for Acute Myocardial Infarction (AMI).

CMS also finalized changes to the existing eCQM policies. Beginning with the FY 2025 payment determination, CMS is increasing the submission requirement from 75 percent to 100 percent validation of medical record requests to successfully complete eCQM validation. For the FY 2026 payment determination (CY 2024 reporting period), CMS will increase eCQM reporting from four to six eCQMs.

Additionally, CMS is removing the zero-denominator declaration and case threshold exemptions for hybrid measures.

CMS Finalizes Changes to Measures for Promoting Interoperability Program

The promoting interoperability program encourages eligible professionals, hospitals, and critical access hospitals (CAH) to adopt, implement, upgrade, and demonstrate meaningful use of certified EHR technology (CEHRT). CMS is finalizing the following new measures to EHR reporting:

  • Enabling Exchange under the Trusted Exchange Framework and Common Agreement (TEFCA) measure under the Health Information Exchange (HIE) Objective as a yes/no attestation measure, beginning with the EHR reporting period in CY 2023, as an optional alternative to the three existing measures under the HIE Objective; and
  • Antimicrobial Use and Resistance Surveillance measure and require its reporting under the Public Health and Clinical Data Exchange Objective, beginning with the CY 2023 EHR reporting period.

CMS is finalizing the following additional changes beginning with the CY 2023 EHR reporting period:

  • Reduce the active engagement options for the Public Health and Clinical Data Exchange Objective from three to two options;
  • Require submission of the level of active engagement, in addition to submitting the measures for the Public Health and Clinical Data Exchange Objective;
  • Institute public reporting of certain Medicare Promoting Interoperability Program data; and
  • Increase the Public Health and Clinical Data Exchange Objective from 10 to 25 points, to increase the points associated with the Electronic Prescribing Objective from 10 to 20, to reduce the points associated with the Health Information Exchange Objective from the current 40 points to 30 points, and to reduce the points associated with the Provide Patients Electronic Access to Their Health Information from the current 40 to 25 points.

Additionally, CMS will increase eCQMs reporting from four eCQMs to six eCQMs, beginning with the CY 2024 reporting period.

CMS Suppresses and Refines Measures for Value-Based Purchasing Programs

CMS finalizes proposals to suppress or refine several measures in the Hospital Readmissions Reduction Program (HRRP), Hospital-Acquired Condition (HAC) Reduction Program, and Hospital Value-Based Purchasing (VBP) Program due to the impacts of the COVID-19 public health emergency (PHE). Additional details are included below.

CMS Finalizes HRRP Adjustments Due to COVID-19

The HRRP is a value-based purchasing program that reduces payments to hospitals with excess readmissions.

CMS will resume the Hospital 30-Day, All-Cause, Risk-Standardized Readmission Rate (RSRR) following Pneumonia Hospitalization measure beginning with FY 2024 reporting period after the suppression of the measure in FY 2023 due to the COVID-19 pandemic. CMS will also modify the measure to exclude COVID-19 diagnosed patients from the measure denominator beginning with the FY 2024 proposed rule.

CMS will also modify the six condition/procedure specific readmissions measures to include a covariate adjustment for history of COVID-19 withing one year preceding the index admission, beginning with the FY 2024 program year.

CMS Will Not Penalize Hospitals Under the HAC Reduction Program for FY 2023

The Hospital-Acquired Condition (HAC) Reduction Program creates an incentive for hospitals to reduce the incidence of hospital-acquired conditions by reducing payment by 1 percent for applicable hospitals that rank in the worst performing quartile on select measures of hospital-acquired conditions.

CMS is pausing the CMS PSI 90 measure and the five CDC NHSN Acquired Infection (HAI) measures from the calculation of measure scores and the Total HAC Score due to the impacts of COVID-19, and therefore will not penalize any hospital under the HAC Reduction Program for the FY 2023 program year.

CMS Will Not Calculate Performance Scores for FY 2023 Due to COVID-19 for Hospital VBP Program

The Hospital Value-Based Purchasing (VBP) Program is a budget-neutral program funded by reducing participating hospitals’ base operating DRG payments each fiscal year by 2 percent and redistributing the entire amount back to the hospitals as value-based incentive payments. For the FY 2023 program year, CMS is pausing the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) and five HAI measures. CMS also finalizes its scoring and payment methodology for the FY 2023 program year such that hospitals will not receive Total Performance Scores.

CMS FINALIZES FOUR APPLICATIONS FOR NEW TECHNOLOGY ADD ON PAYMENT

The New Technology Add-on Payment (NTAP) program allows for an additional payment for medical services or technologies that are found to be: (1) new; (2) disproportionately costly to the existing MS-DRG; and (3) a substantial clinical improvement. As part of its annual process, CMS received 18 applications for add-on payment for FY 2023 and before the finalizing of the FY 2023 IPPS/LTCH final rule a total of 12 applicants withdrew their application. Further, one applicant did not receive FDA approval and therefore were ineligible for an add-on payment. CMS considered a total of five applicants for add-on payment. CMS is finalizing four of the five eligible products for new technology add on payment, under the traditional pathway in FY 2023 totaling an estimated cost of $75 million in FY 2023[16]. Beginning with the FY 2024 application cycle, CMS is finalizing its proposal to publicly post online future NTAP applications.

CMS TO CONTINUE COVID-19 AND SEASONAL INFLUENZA REPORTING REQUIREMENTS

Conditions of Participation (CoPs) are the health and safety standards that Medicare-certified providers and suppliers must meet to receive Medicare and Medicaid payment. In 2020, CMS had adopted a CoP requiring hospitals and CAHs to submit certain data related to COVID-19 and seasonal influenza to the HHS.

In this final rule, CMS is finalizing its proposal to revise CoP requirements adopted in 2020 so reporting requirements would continue beginning either upon the conclusion of the current COVID-19 PHE declaration or the effective date of this proposed rule, whichever is later, through April 30, 2024 (unless the Secretary determines an earlier end date).

In response to comments, CMS reduced the initial proposed scope of data categories for reporting. CMS will require hospitals and CAHs to report the following data categories relevant to COVID-19, to the extent determined by the Secretary:

  • Confirmed infections among patients;
  • Total deaths among patients;
  • Personal protective equipment and testing supplies;
  • Ventilator use, capacity, and supplies;
  • Total bed and intensive care unit bed census and capacity;
  • Staffing shortages;
  • Vaccine administration data of patients and staff; and
  • Relevant therapeutic inventories or usage, or both.

CMS finalizes the following data categories that hospitals and CAHs will be required to report relevant to influenza, to the extent as determined by the Secretary:

  • Confirmed infections among patients;
  • Total deaths among patients; and
  • Confirmed co-morbid influenza and COVID-19 infections among patients.

CMS will not implement and enforce requirements until the current COVID-19 PHE declaration concludes. CMS plans to issue guidance for this transition.

CMS is also withdrawing its proposal to establish additional reporting requirements for an infectious disease in the event of a PHE designation. CMS notes the need to establish a longer-term solution for data collection and reporting and highlights the importance of continued collaboration among government and interested parties to standardize and streamline data reporting and reduce burden on facilities.

In terms of impact, CMS estimates that changes to the CoPs would result in an estimated total of $38,204,400 or approximately $6,162 per facility annually for weekly reporting.

CMS MAINTAINS CURRENT PAYMENT POLICY FOR ORGAN ACQUISITION

Medicare reimburses transplant hospitals (THs) for organ acquisition costs, the transplant surgery, inpatient, and post-transplant costs but reimbursement comes through different payment systems:[17],[18]

  • Medicare Part A pays for TH costs of a transplant and certain follow-up care through a DRG payment;
  • Medicare Part A pays for organ acquisition costs under reasonable cost principles;[19],[20]
  • Medicare Part B generally pays for physician and other services related to the transplant procedure.

In the proposed and final FY 2022 IPPS rule, CMS had considered codifying and compiling Medicare organ acquisition policies.[21] In addition, CMS considered changes regarding counting and reporting for THs and hospital organ procurement organizations of Medicare usable organs and total usable organs on Medicare hospital cost reports. Ultimately, given the large number and nature of the comments that the agency received on these proposals, CMS had decided to address them in future rulemaking.

For FY 2023, the agency did not make any proposals to change organ acquisition payment policy. CMS reiterates in their final rule that organ acquisition costs for kidney, heart, heart-lung, liver, lung, pancreas, and intestinal (or multivisceral organs) transplants continue to be paid on a reasonable cost basis.

CMS FINALIZES CHANGES TO RELATIVE WEIGHT CALCULATION FOR MS-DRG 018, CHIMERIC ANTIGEN RECEPTOR (CAR) T-CELL THERAPIES

Effective FY 2022, CMS created PRE-MDC MS-DRG 018 for cases that include CAR T-cell, non-CAR T-cell, and other immunotherapies[22]. CMS proposed to continue to use the same process to identify and adjust clinical trial cases to appropriately pay for the average cost hospitals incur for providing the therapy outside of a clinical trial and for purposes of calculating the FY 2023 relative weights[23].

CMS finalizes its proposal to apply an adjustment by 0.21 to account for the CAR T cell therapy cases identified as clinical trial cases in calculating the national average standardized cost per case. CMS will use this adjusted case count for the MS-DRG 018 in calculating the national average cost per case.

CMS ESTIMATES $71 MILLION INCREASE FOR LONG TERM CARE HOSPITALS

For FY 2023, CMS estimates that the aggregate long-term care hospital (LTCH) prospective payment system (PPS) payments will increase by 2.4 percent or $71 million, as compared to FY 2022. CMS finalized a LTCH PPS standard Federal payment rate of $46,432.77. The final rule affects 339 LTCHs nationwide, for discharges occurring on or after October 1, 2022.

CMS RESPONDS TO REQUESTS FOR INFORMATION

CMS responds to comments on several requests for information (RFIs) included in the proposed rule:

Climate Change Readiness Considerations

CMS sought comment on how to better support hospitals and healthcare providers in the face of climate change-related health impacts. The agency received numerous comments in support of this effort along with suggestions as to the best avenues in which to invest resources. CMS will consider these comments and engage interested parties in future rulemaking.

Digital Quality Measurement

CMS received comments related to revisions of possible future definition of Digital Quality Measures (dQMs), data standardization activities to support and further standards for digital data, and methods to attain Fast Healthcare Interoperability Resources® (FHIR) eCQM reporting across quality reporting programs. CMS will consider comments to inform future rule making.

Classification of Rare Diseases

CMS requested comments on issues related to the classification of rare diseases represented by low-volumes in the MS-DRG claims data. While no proposals were issued, the agency acknowledges that comments received will be considered as CMS explores mechanisms to address payment concerns for patients with rare diseases and conditions.

***

This Applied Policy® Summary was prepared by Patrick Harrison with support from the Applied Policy team of health policy experts. If you have any questions or need more information, please contact him at pharrison@appliedpolicy.com or at 808-341-6026.

 

[1] For general acute care hospitals paid under the Inpatient Prospective Payment System (IPPS) that successfully participate in the Hospital Inpatient Quality Reporting (IQR) Program and are meaningful electronic health record (EHR) users.

[2] In the FY 2022 rule, CMS utilized FY 2019 data instead of FY 2020 data due to impacts of the COVID-19 pandemic.

[3] See Tables on page 2080 of the unpublished rule.

[4] See Tables on page 1960 of the unpublished rule.

[5] Hospitals also may receive outlier payments for high-cost cases that qualify under thresholds established for each fiscal year.

[6] See Table 1D on page 1960 of the unpublished rule.

[7] This policy and its related budget neutrality adjustment are matters being litigated in Bridgeport Hospital, et al., v. Becerra, No. 1:20-cv-01574 (D.D.C.).

[8] 42 CFR 42 CFR § 412.103.

[9] See section 1886(d)(8)(C)(iii) of the Social Security Act.

[10] Excludes hospitals with additional forms of reclassification.

[11] https://www.jdsupra.com/legalnews/district-court-invalidates-medicare-gme-6333928/

[12] See page 1972 of the unpublished rule.

[13] https://www.whitehouse.gov/briefing-room/statements-releases/2021/12/07/fact-sheet-vice-president-kamala-harris-announces-call-to-action-to-reduce-maternal-mortality-and-morbidity/.

[14] https://www.cms.gov/newsroom/press-releases/cms-announces-key-actions-reduce-maternal-mortality-and-morbidity.

[15] Maternal Morbidity Structural Measure https://www.cms.gov/files/document/maternal-morbidity-structural-measure-specifications.pdf.

[16] See page 2009 of the unpublished rule.

[17] Transplant program and transplant hospital are defined at 42 CFR 482.70. CMS is phasing out the term “transplant center.”

[18] Transplant programs in a transplant hospital must meet CMS Conditions of Participation under 42 CFR Part 482, subpart E.

[19] Medicare reimburses THs for organ acquisition costs under reasonable cost principles pursuant to section 1861(v) of the Act, based on the TH’s ratio of Medicare usable organs to total usable organs.

[20] Medicare authorizes payment to Organ Procurement Organizations (OPOs) for kidney acquisition costs under reasonable cost principles pursuant to section 1861(v) of the Act, based on the OPO’s ratio of Medicare usable kidneys to total usable kidneys.

[21] The 21st Century Cures Act (Pub. L. 114-255), Section 17006: Allowing End-Stage Renal Disease Beneficiaries to Choose a Medicare Advantage Plan. https://www.congress.gov/bill/114th-congress/house-bill/34/text/pl

[22] CMS Categorizes each MDC within 25 major diagnosis categorizes. MDC group illnesses by specialty, organ system, or medical etiology. PRE-MDC is a category used for patient groups that require an extreme level of resources.

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