/ en Fri, 25 Apr 2025 20:09:47 -0500 Mon, 14 Apr 25 18:20:37 -0500 <div class="container"><div class="row"><div class="col-md-8"><p>The Centers for Medicare & Medicaid Services (CMS) April 11 issued the <a href="https://www.federalregister.gov/public-inspection/2025-06336/medicare-program-inpatient-rehabilitation-facility-prospective-payment-system-for-federal-fiscal" target="_blank">proposed rule</a> for the inpatient rehabilitation facility (IRF) prospective payment system (PPS) for fiscal year (FY) 2026. This rule would update IRF PPS payments relative to the current fiscal year, as required, along with several proposed routine updates to the payment system and quality reporting program (QRP</p><div class="panel module-typeC"><div class="panel-heading"><p><strong>Key highlights</strong></p><p>The proposal would:</p><ul><li>Update payment rates by a net 2.8%. This includes a proposed market basket update of 3.4%, less a productivity cut of 0.8 percentage points. There would also be a 0.2% increase related to outlier payments.</li><li>Remove four patient assessment data elements under the IRF QRP and remove the COVID-19 vaccination measures for both patients and health care personnel.</li></ul></div></div><h2>AHA Take</h2><p>This proposed rule would implement mostly routine payment updates and does not include any significant changes to the IRF PPS. However, similar to recent years, the AHA remains concerned that CMS’ market basket updates appear to continue to lag inflation and the increased costs facing hospitals.</p><p>Highlights from the rule follow.</p><h2>IRF PPS PAYMENT CHANGES</h2><p><strong>Proposed FY 2026 Payment Updates. </strong>CMS estimates that its proposed rule would increase net payments to IRFs in FY 2026 by 2.8% overall ($295 million) relative to FY 2025. This includes a 3.4% market basket update offset by a statutorily mandated productivity factor cut of 0.8%. This overall estimate also includes CMS’ estimates that its proposed reduction to the outlier threshold would increase payments by 0.2% in FY 2026.</p><p>The 3.4% market basket update is based on the latest available forecast for FY 2026. As it typically does, the agency will use any updated forecasts when finalizing payment changes in the final rule. Using these current forecasts, CMS proposes to update the standard payment conversion factor from $18,907 to $19,364 for FY 2026. This update to the standard payment conversion factor also includes a small budget neutrality adjustment for wage index adjustments and changes to the labor-related share of payments.</p><p>CMS also is proposing to use its latest available data to make its annual update to the weighting and average length of stay figures for case-mix group weights and tiers. These updated weights are available in Table 2 of the proposed rule. CMS estimates 99.2% of IRF discharges would be in case-mix groups and tiers that will experience a less than 5% change in their weight relative to FY 2025 weights.</p><p><strong>Proposed Labor-related Share.</strong> As a result of the use of updated data, CMS is proposing an update to the labor-related share to 74.5% from the current level of 74.4%.</p><p><strong>Wage Adjustment. </strong>CMS proposes to update the IRF PPS wage index using the most recent OMB statistical area delineations based on the 2020 Decennial Census, which revises the existing core-based statistical areas (CBSAs). The agency will implement its permanent 5% cap policy on negative wage index changes (regardless of the underlying reason for the decrease). In addition, CMS also is proposing to continue the phase-out of the rural adjustment for IRFs that have transitioned from rural to urban status under the new CBSAs. These IRFs would receive one-third of the rural adjustment in FY 2026, and no rural adjustment in FY 2027.</p><h2>IRF QUALITY REPORTING PROGRAM</h2><p>Beginning with the reporting period starting Oct. 1, 2025, CMS proposes to make optional the reporting of four standardized patient assessment data elements in the IRF Patient Assessment Instrument (PAI) focused on social determinants of health. This includes one item focused on living situation, two items focused on food insecurity and one item focused on utilities. The items would be removed from the IRF-PAI altogether by the FY 2028 IRF QRP.</p><p>In addition, CMS proposes to remove two COVID-19 vaccination measures from the IRF QRP for FY 2026 — one focused on patients and the other on health care personnel. CMS also asks for input on future IRF QRP measure concepts, reducing the burden of reporting patient assessment data and advancing digital quality measures in the IRF QRP.</p><h2>REQUEST FOR INFORMATION: UNLEASHING PROSPERITY THROUGH DEREGULATION OF THE MEDICARE PROGRAM (EXECUTIVE ORDER 14192)</h2><p>On Jan. 31, 2025, President Trump issued Executive Order (EO) 14192, "Unleashing Prosperity Through Deregulation," which states the administration’s policy to significantly reduce the private expenditures required to comply with federal regulations. CMS would like public input on approaches and opportunities to streamline regulations and reduce administrative burdens on providers, suppliers, beneficiaries and other interested parties participating in the Medicare program. The agency has made available an RFI at <a href="https://www.cms.gov/medicare-regulatory-relief-rfi" target="_blank">https://www.cms.gov/medicare-regulatory-relief-rfi</a> and requests stakeholders to submit all comments in response to this RFI through the provided web link.</p><h2>NEXT STEPS</h2><p>CMS will accept comments on the IRF proposed rule through June 10.</p><h2>FURTHER QUESTIONS</h2><p>Please contact Jonathan Gold, AHA’s senior associate director of policy, at <a href="mailto:jgold@aha.org">jgold@aha.org</a>, with any questions related to payment, and Akin Demehin, AHA’s vice president of quality and safety policy, at <a href="mailto:ademehin@aha.org">ademehin@aha.org</a>, regarding any quality-related questions.</p></div><div class="col-md-4"><a href="/system/files/media/file/2025/04/cms-releases-fy-2026-inpatient-rehabilitation-facility-pps-proposed-rule-advisory-4-14-2025.pdf"><img src="/sites/default/files/inline-images/cover-cms-releases-fy-2026-inpatient-rehabilitation-facility-pps-proposed-rule-advisory-4-14-2025.png" data-entity-uuid="dc66ab11-27fe-4b6a-8910-6d53812ef70d" data-entity-type="file" alt="Cover Image 2026 Inpatient Rehabilitation Facility PPS Proposed Rule" width="640" height="834" class="align-right"></a></div></div></div> Mon, 14 Apr 2025 18:20:37 -0500 Inpatient Rehab Facility PPS /news/headline/2025-04-11-cms-proposes-26-payment-update-irfs <p>The Centers for Medicare & Medicaid Services April 11 released the fiscal year 2026 proposed rule for <a href="https://www.federalregister.gov/public-inspection/2025-06336/medicare-program-inpatient-rehabilitation-facility-prospective-payment-system-for-federal-fiscal">inpatient rehabilitation facilities</a>. The rule would increase payments by 2.6% overall, which includes a 3.4% market basket update reduced by a 0.8 percentage point productivity adjustment. CMS is also proposing a slight decrease in the outlier threshold, from $12,043 to $11,971. In addition, it has included in the rule its previously published request for information seeking input on opportunities to streamline regulations and reduce burdens on providers. <br> <br>For the IRF Quality Reporting Program, CMS proposes to remove four patient assessment data elements and remove the COVID-19 vaccination measures for both patients and health care personnel. CMS also asks for input on future IRF QRP measure concepts, reducing the burden in reporting patient assessment data and advancing digital quality measures in the IRF QRP. <br> <br>Comments are due on the proposed rule on June 10. AHA members will receive a Regulatory Advisory with additional information. </p> Fri, 11 Apr 2025 18:17:18 -0500 Inpatient Rehab Facility PPS /testimony/2025-03-11-aha-statement-house-ways-and-means-subcommittee-health-hearing-march-11-2025 <div class="container"><div class="row"><div class="col-md-8"><h2>Statement<br>of the<br>���������� Association<br>for the<br>Committee on Ways and Means<br>Subcommittee on Health<br>of the<br>U.S. House of Representatives<br>“After the Hospital: Ensuring Access to Quality Post-Acute Care”<br>March 11, 2025</h2><p>On behalf of our nearly 5,000 member hospitals and health systems and other health care organizations, our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and our 2,425 post-acute care members, the ���������� Association (AHA) appreciates the opportunity to submit this statement for the record to the Ways and Means Subcommittee on Health on the value of post-acute care and how Congress can better support patients’ access to these critical services.</p><h2>General Policy & Regulatory Challenges</h2><p>Post-acute care is provided to patients who have been discharged from an acute-care hospital but still require services such as close medical supervision, nursing care, therapies and other support. Long-term care hospitals (LTCHs) act as a pressure relief valve for high-acuity patients needing extended hospital stays, thereby easing the burden on intensive care units (ICUs). Inpatient rehabilitation facilities (IRFs) assist patients recovering from life-changing illnesses like brain injuries, spinal cord injuries and amputations. Skilled nursing facilities (SNFs) offer rehabilitation therapy services aimed at strengthening patients and making them more independent before they return home. Home health agencies (HHs) enable seniors to remain independent by providing medical or non-medical care in their homes. Each of these facilities plays a crucial role across the continuum of care.</p><p>While each specific post-acute sector faces unique challenges, there are several policy and regulatory issues that are universal.</p><h3>Medicare Advantage</h3><p>Medicare Advantage (MA) plans are an increasingly popular choice for older Americans, and measures must be taken to ensure that patients who require post-acute care services are able to access them in a timely manner. Perhaps the biggest challenge facing post-acute care providers and their patients is the ongoing restrictions that MA plans place on access to care. The issue has been well documented by providers as well as by Department of Health and Human Services Office of Inspector General and congressional investigations.<a href="#fn1"><sup>1</sup></a><sup>,</sup><a href="#fn2"><sup>2</sup></a> The prior authorization process used by MA plans places significant administrative burden on both acute-care hospitals and post-acute care providers. Perhaps more importantly, it is directly harmful to Medicare beneficiaries — at best delaying their care and at worst outright denying medically necessary treatment.</p><p>MA plans’ practices have directly contributed to the growing discharge delay problems plaguing acute-care hospitals. While all beneficiaries have faced these delays, the increase in length of stay for MA beneficiaries seeking post-acute care has increased twice as much compared to Traditional Medicare beneficiaries. Specifically, the average length of stay (ALOS) prior to discharge to post-acute care settings has grown by 11.3% for MA patients between 2019 and 2024. However, for patients in Traditional Medicare, the ALOS has grown by only 5.2%, according to industry benchmark data from Strata Decision Technology, LLC.</p><p>Despite steps taken by the Centers for Medicare & Medicaid Services (CMS) in recent years, providers have seen little to no meaningful change in MA plan behavior and no increased access for beneficiaries. Additionally, post-acute care providers still face challenges with MA plans listing them within their networks. CMS should conduct regular audits to ensure that MA plans include robust post-acute care options with sufficient bed spaces and resources to provide the in-network care that patients need. As MA enrollment continues to grow, it is imperative that Congress continue to rein in these harmful practices to ensure that beneficiaries are not denied the care to which they are entitled.</p><h3>Ongoing Workforce Challenges</h3><p>The U.S. health care system is facing unprecedented workforce shortages, with the Bureau of Labor Statics estimating there will be 193,100 openings for nurses in each of the next 10 years.<a href="#fn3"><sup>3</sup></a> For physicians, there could be a shortage of between 37,800 and 124,000 physicians by 2034 for both primary and specialty care.<a href="#fn4"><sup>4</sup></a> Since mid-2020, post-acute care providers have seen a significant number of patient care technicians, registered nurses, and respiratory therapists, among other vital professionals, shifting employment to other organizations. Some post-acute care providers in rural areas have experienced significant challenges in filling open positions, sometimes going months without receiving an application for open registered nurses, licensed practical nurses, certified nursing assistants or key leadership roles. Staffing challenges jeopardize the ability of seniors to access the care they need and deserve.</p><p>To ensure residents and families have access to high-quality care close to home, meaningful, long-term solutions and investments in workforce development must replace stop-gap measures, reimbursement cuts and punitive regulations. The AHA encourages Congress to pass the Conrad State 30 and Physician Access Reauthorization Act (S.709/H.R.1585) and the Healthcare Workforce Resilience Act, as well as support visa recapture initiatives and continue support for the Health Resources and Services Administration’s (HRSA) health professions and nursing workforce development programs.</p><h2>Sector Specific Comments</h2><h3>Long-Term Care Hospitals</h3><p>LTCHs play a unique role for Medicare and other beneficiaries by caring for the most severely ill patients who require extended hospitalization. LTCHs offer an intensive, hospital-level of care that may not be available in other post-acute care settings. LTCH patients are typically very medically complex, with multiple organ failures, and stay in LTCHs on average for at least 25 days. Many LTCH patients depend on ventilators due to respiratory failure or similar ailments, which require highly specialized care and extended stays. In addition, LTCHs are critical partners for acute-care hospitals, alleviating capacity for overburdened ICUs and other parts of the care continuum that would otherwise be further strained without access to LTCHs for these patients.</p><p>In 2016, Congress put in place a dual-rate payment system under the LTCH prospective payment system (PPS) for Traditional Medicare beneficiaries.<a href="#fn5"><sup>5</sup></a> This fundamental change in the payment system and other coinciding market factors dramatically reshaped the landscape of both LTCHs and the beneficiaries they serve. Since implementation of the dual-rate payment system, the volume of standard LTCH cases has fallen by approximately 70% from its peak under the legacy payment system and the number of LTCH providers also has decreased by 20%. At the same time, the average acuity of LTCH patients has risen by 20% or more in that same period, and these patients are increasingly consolidated into a limited number of Diagnosis-Related Groups (DRGs).<a href="#fn6"><sup>6</sup></a> In addition, approximately one-third of all Medicare LTCH discharges nationally are paid the inpatient PPS-equivalent rate. However, these reimbursements fall well short of the cost of care. AHA’s analysis shows that as of fiscal year 2020 reimbursement for these cases totaled only 46% of the cost of care.<a href="#fn7"><sup>7</sup></a> Finally, the growth of MA has further shrunk the patient population for LTCHs as MA plans routinely inappropriately deny access to LTCHs.</p><p>The smaller, sicker patient population and dwindling reimbursement has created many challenges for LTCHs, as evidenced by the closure of so many of these facilities. The remaining patient pool is notably more acute and costly to treat, resulting in cases increasingly qualifying for high-cost outlier (HCO) payments to compensate for lack of precision in the DRGs as so many cases are consolidated into a limited number of DRGs. In 2016, the fixed-loss amount (FLA) for HCO cases, which is the amount of financial loss an LTCH must incur before qualifying for an HCO payment, was $16,423. Since that time, the FLA has risen by more than 300% to $77,048. This unsustainable figure puts LTCHs in the untenable position of having to lose tens of thousands of dollars in order to care for some of the sickest patients. Unfortunately, CMS has been unable to deviate from its current methodology to provide relief from this policy due to a congressional mandate to cap total outlier payments at 8% of total payments.<a href="#fn8"><sup>8</sup></a></p><p>The AHA appreciates this Subcommittee’s awareness of the need to provide relief to the LTCH sector and supports efforts to provide additional flexibility and funding for HCO cases, and additional flexibility to provide care for different types of patients through the standard payment system.</p><h3>Inpatient Rehabilitation Facilities</h3><p>IRF patients are typically admitted directly from an acute-care hospital following a serious accident or illness such as stroke, brain injury, amputation or others that have resulted in serious functional deficits and medical complications. IRFs provide hospital-level care, which means they are closely supervised by a physician who also oversees patients’ overall rehabilitation. The intensive course of rehabilitation provided in IRFs must include a minimum of 15 hours per week of intensive therapy services involving multiple therapy disciplines, as well as around-the-clock specialized nursing care. This level of care is critical for debilitated patients who are stable enough to be discharged from the acute-care hospital to begin intensive rehabilitation but are at risk for medical complications without continued close medical management.</p><p>The AHA continues to hear from IRFs regarding their concerns with CMS’ IRF Review Choice Demonstration (RCD). CMS initially created the IRF RCD to “assist in developing improved procedures for the identification, investigation, and prosecution of potential Medicare fraud.” However, the agency never provided credible evidence to support its belief that there may be high rates of fraud in the IRF field — it only cited its improper payment rate for IRFs, which, as it knows, is not the same as fraud. Since being operationalized by the Biden administration in 2023, CMS has not subsequently provided any evidence that the IRF RCD has revealed or assisted in uncovering any fraud. Specifically, the demonstration currently subjects 100% of IRF claims to review in both Alabama and Pennsylvania. Yet, according to CMS’ <a href="https://www.cms.gov/files/document/irf-rcd-stats-fy-2024.pdf" target="_blank" title="CMS: Review Choice Demonstration for Inpatient Rehabilitation Facility Services (IRF RCD) Quarterly Updates. Fiscal Year 2024 (Oct 2023 – Sept 2024).">most recent data</a> collected during fiscal year 2024, approximately 90% of all claims reviewed have been approved. Of those, more than 95% were approved on the initial submission. Despite this high affirmation rate and lack of evidence of any fraud, CMS says it still plans to continue its expansion of the demonstration to more than half of all states and territories, subjecting hundreds of thousands of IRF claims annually to the burdensome manual medical review process. It has become clear that this demonstration is burdensome, diverts valuable clinical resources, and is not achieving its stated objective of uncovering or preventing fraud in the Medicare program.</p><p>Therefore, the continued need for the IRF RCD remains highly dubious, and the AHA continues to encourage CMS and Congress to end this program.</p><h3>Skilled Nursing Facilities</h3><p>SNFs play another critical role for many hospitalized patients who need continued care after discharge. However, hospitals have faced increasing difficulty discharging patients to post-acute care settings, including SNFs. This challenge has largely been due to staffing shortages and the associated reduced capacity of SNFs and other providers. These shortfalls then place additional burden back on hospitals, including the need for hospitals to board patients until a discharge location can be found. Therefore, it is vital for the entire continuum of care, including for acute-care hospitals, that SNFs are properly resourced.</p><p>The AHA and its members are committed to safe staffing to ensure high-quality, patient-centered care in all health care settings, including long-term care (LTC) facilities. Yet, the process of safely staffing any health care facility is about much more than achieving an arbitrary number set by regulation. It requires clinical judgment and flexibility to account for patient needs, facility characteristics, and the expertise and experience of the care team. The Biden administration’s one-size-fits-all minimum staffing rule for LTC facilities creates more problems than it solves and could jeopardize access to all types of care across the continuum, especially in rural and underserved communities that may not have the workforce levels to support these requirements.</p><p>The AHA supports the Protecting America’s Seniors Access to Care Act (H.R. 1683) to prohibit the Department of Health and Human Services from implementing the provisions of the minimum staffing rule. We have recommended to CMS specific alternative strategies that take more patient- and workforce-centered approaches to ensuring LTC facilities have a strong foundation of policies and processes to continually assess, reassess and adjust their staffing levels. These strategies constitute starting points for further standards development, which we would encourage CMS to engage in with the assistance of patients and the entire health care continuum. Not only would these proposed alternatives support more timely and effective action by LTC facilities to address staffing challenges, but they also would be more consistent with modern clinical practice. Thus, repealing the Biden-era mandate would both protect patient access to care and allow for the development of more effective and clinically appropriate strategies to improve LTC patient outcomes.</p><h3>Home Health Agencies</h3><p>Approximately one in five hospitalized Medicare beneficiaries are discharged to HH.<a href="#fn9"><sup>9</sup></a> These services alleviate pressure on hospitals, other post-acute care sites and caregivers, who would otherwise be responsible for these patients. HH agencies also can prevent rehospitalization by safely providing needed interventions at home thus avoiding potential complications and accidents.</p><p>Over the last few years, the AHA has seen a strain on HH operations — along with other post-acute care providers — due to financial challenges, creating ripple effects throughout the continuum of care. Hospitals have seen the length of stay for patients being discharged to HH increase as they face increasing difficulty finding placements for these patients.<a href="#fn10"><sup>10</sup></a> This has been due in large part to the reductions in reimbursement to HH providers put in place by CMS since its implementation of the new Medicare fee-for-service payment system in 2020. CMS determined it must permanently cut HH payments from between 4% to 8% annually in order to meet statutory budget neutrality requirements. In addition, CMS has indicated that it intends to recoup billions more in temporary reductions in the coming years. These payment reductions, paired with staffing shortages, and other administrative burdens and costs will continue to have serious implications for access to services for Medicare beneficiaries. The AHA is thankful for the Committee’s ongoing support of home health agencies.</p><h2>Conclusion</h2><p>Thank you for your leadership on these important issues and for the opportunity to provide comments. We look forward to continuing to work with you to address these important topics on behalf of our patients and communities.</p><hr><ol><li id="fn1">HHS, Office of Inspector General (OIG); Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care (April 2022) (<a href="https://oig.hhs.gov/oei/reports/OEI-09-18-00260.pdf" target="_blank">https://oig.hhs.gov/oei/reports/OEI-09-18-00260.pdf</a>).</li><li id="fn2"><a href="https://www.hsgac.senate.gov/wp-content/uploads/2024.10.17-PSI-Majority-Staff-Report-on-Medicare-Advantage.pdf" target="_blank">https://www.hsgac.senate.gov/wp-content/uploads/2024.10.17-PSI-Majority-Staff-Report-on-Medicare-Advantage.pdf</a>.</li><li id="fn3">3<a href="https://www.bls.gov/ooh/healthcare/registered-nurses.htm#tab-6" target="_blank">https://www.bls.gov/ooh/healthcare/registered-nurses.htm#tab-6</a>.</li><li id="fn4">4<a href="https://www.aamc.org/news/press-releases/aamc-report-reinforces-mounting-physician-shortage" target="_blank">https://www.aamc.org/news/press-releases/aamc-report-reinforces-mounting-physician-shortage</a>.</li><li id="fn5">Bipartisan Budget Act Of 2013 (P.L. 113–67).</li><li id="fn6"><a href="/white-papers/2023-12-29-white-paper-medicares-ltch-outlier-policy-needs-reforms-protect-extremely-ill-beneficiaries" target="_blank">/white-papers/2023-12-29-white-paper-medicares-ltch-outlier-policy-needs-reforms-protect-extremely-ill-beneficiaries</a>.</li><li id="fn7"><a href="/system/files/media/file/2019/06/aha-cms-long-term-care-proposed-rule-fy2020-6-21-2019_0.pdf" target="_blank">/system/files/media/file/2019/06/aha-cms-long-term-care-proposed-rule-fy2020-6-21-2019_0.pdf</a>.</li><li id="fn8">Section 15009(b) of the 21ST Century Cures Act added section 1886(m)(7) to the Act.</li><li id="fn9">MedPAC; July 2024 Data Book; Section 8, Pg. 107 (<a href="https://www.medpac.gov/wp-content/uploads/2024/07/July2024_MedPAC_DataBook_Sec8_SEC.pdf" target="_blank">https://www.medpac.gov/wp-content/uploads/2024/07/July2024_MedPAC_DataBook_Sec8_SEC.pdf</a>).</li><li id="fn10"><a href="/lettercomment/2024-08-26-aha-comments-calendar-year-2025-home-health-prospective-payment-system-proposed-rule" target="_blank">/lettercomment/2024-08-26-aha-comments-calendar-year-2025-home-health-prospective-payment-system-proposed-rule</a>.</li></ol></div><div class="col-md-4"><div class="external-link spacer"><a class="btn btn-wide btn-primary" href="/system/files/media/file/2025/03/AHA-Statement-to-House-Ways-and-Means-Subcommittee-on-Health-for-Hearing-March-11-2025.pdf" target="_blank" title="Click here to download the AHA Statement to House Ways and Means Subcommittee on Health for Hearing March 11, 2025 PDF.">Download the Testimony PDF</a></div><a href="/system/files/media/file/2025/03/AHA-Statement-to-House-Ways-and-Means-Subcommittee-on-Health-for-Hearing-March-11-2025.pdf"><img src="/sites/default/files/inline-images/Page-1-AHA-Statement-to-House-Ways-and-Means-Subcommittee-on-Health-for-Hearing-March-11-2025.png" data-entity-uuid="ef5df51a-efdf-417b-bd24-197ee16b5607" data-entity-type="file" alt="AHA Statement to House Ways and Means Subcommittee on Health for Hearing March 11, 2025 page 1." width="695" height="900"></a></div></div></div> Tue, 11 Mar 2025 12:52:15 -0500 Inpatient Rehab Facility PPS <div class="container"><div class="row"><div class="col-md-8"><p>The Centers for Medicare & Medicaid Services (CMS) July 31 <a href="https://www.federalregister.gov/documents/2024/08/06/2024-16911/medicare-program-inpatient-rehabilitation-facility-prospective-payment-system-for-federal-fiscal">issued</a> its fiscal year (FY) 2025 final rule for the inpatient rehabilitation facility (IRF) prospective payment system (PPS). This rule updates IRF payments and modifies the IRF Quality Reporting Program (QRP) measures and reporting requirements. </p><div class="panel module-typeC"><div class="panel-heading"><h2>Key Highlights</h2><p>The final rule: </p><ul><li>Updates payment rates by a net 3.0%, relative to FY 2024. This includes a market basket update of 3.5%, less a productivity cut of 0.5%.</li><li>Increases the high-cost outlier threshold, which will result in an additional 0.2% decrease in overall payments.</li><li>Updates the wage index using the most recent Office of Management and Budget (OMB) statistical area delineations based on the 2020 Decennial Census.</li><li>Adopts and modifies patient assessment items addressing social determinants of health (SDOH). </li></ul></div></div><h2>AHA TAKE</h2><p>The final rule contains mostly routine payment updates that do not deviate significantly from the proposed rule. However, the Medicare market basket updates continue to fall well short of the sharply increased costs hospitals have faced in recent years. The AHA is disappointed CMS did not take steps to address these shortcomings and will continue to pursue potential modifications to these updates in the future.</p><p>View the detailed Regulatory Advisory below.</p></div><div class="col-md-4"><a href="/system/files/media/file/2024/08/inpatient-rehabilitation-facility-prospective-payment-system-final-rule-for-fy-2025-advisory-8-27-2024_0.pdf"><img src="/sites/default/files/2024-08/cover-inpatient-rehabilitation-facility-prospective-payment-system-final-rule-for-fy-2025-advisory-8-27-2024.png" data-entity-uuid data-entity-type="file" alt="Cover Regulatory Advisory" width="644" height="832"></a></div></div></div> Tue, 27 Aug 2024 10:16:16 -0500 Inpatient Rehab Facility PPS /2024-08-12-aha-comments-340b-drug-pricing-program-irf-payments-physician-fee-schedule-and-telehealth <div class="container"><div class="row"><div class="col-md-8"><p>August 12, 2024</p><p>Michael Chernew, Ph.D.<br>Chairman<br>Medicare Payment Advisory Commission<br>425 I Street, NW, Suite 701<br>Washington, D.C. 20001</p></div><div class="col-md-4"><div class="external-link spacer"><a class="btn btn-wide btn-primary" href="/system/files/media/file/2024/08/aha-comments-on-mepac-topics-340b-inpatient-rehab-facility-payments-physician-fee-schedule-and-telehealth-letter-8-12-2024.pdf" target="_blank" title="Click here to download the AHA Comments on 340B Drug Pricing Program, IRF Payments, Physician Fee Schedule and Telehealth letter PDF.">Download the Letter PDF</a></div></div></div><div class="row"><div class="col-md-8"><p>Dear Dr. Chernew: </p><p>On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and the 43,000 health care leaders who belong to our professional membership groups, the ���������� Association (AHA) appreciates the opportunity to share our comments as Medicare Payment Advisory Commission (MedPAC) begins its 2024-2025 cycle.</p><p>As the commission continues to consider topics related to the 340B Drug Pricing Program, inpatient rehabilitation facility (IRF) payments, the physician fee schedule (PFS) and telehealth in the new cycle, we urge MedPAC to:</p><ul><li><strong>Carefully consider the negative consequences for beneficiaries, providers and communities of any future efforts to cut Medicare payments to 340B hospitals.</strong></li><li><strong>Reconsider its pursuit of an IRF-skilled-nursing facility (SNF) site-neutral payment policy and discourage it from recommending potential changes to the IRF payment system.</strong></li><li><strong>Directionally support updates to physician reimbursement that more appropriately account for inflation.</strong></li><li><strong>Recommend repealing the in-person visit requirements for tele-behavioral health services and to not pursue policy options that would remove telehealth “incident to” options, as these policies limit patient access.</strong></li></ul><p>Our detailed comments on these issues follow.</p><h2>340B Drug Pricing Program</h2><p>We have serious concerns about the direction that MedPAC has taken with regard to its analysis of the 340B program. Specifically, at its April 2024 meeting, MedPAC shared results of an analysis comparing Medicare fee-for-service payments for covered outpatient drugs purchased under the 340B program to 340B ceiling prices. While we appreciate that MedPAC did not offer any recommendations based on this analysis at this time, we think it is important for it to consider the facts we outline below should it continue this work in the 2024 – 2025 cycle.</p><p>For more than 30 years, the 340B Drug Pricing Program has provided financial help to hospitals (and other providers) serving highly marginalized communities to manage rising prescription drug costs.<sup>1</sup> The program works by permitting certain hospitals to purchase covered outpatient drugs at a discounted price, generate savings, and use those savings to stretch limited federal resources to address the unique health care needs of their patients and communities. For example, hospitals often use their 340B savings to establish behavioral health clinics and implement medication management and community health programs, as well as offer free or discounted medications.<sup>2</sup> These important patient benefits are put at risk when hospitals’ 340B savings are cut.</p><p>The 340B program statute intentionally provides covered entities with additional funds by reducing the acquisition price on 340B drugs without changing hospitals’ reimbursement under the Medicare program. It is precisely this delta between the hospital’s acquisition price for the drug and the reimbursement received that allows 340B hospitals to meet the intent of the program and expand access to care for more patients. <strong>Therefore, MedPAC’s finding that Medicare payments exceeded 340B ceiling prices is consistent with the purpose and design of the 340B program.</strong> If Medicare payments for 340B drugs were reduced, it would diminish the funding available to 340B hospitals to fulfill Congress’ intent to allow these hospitals to use savings to expand the services they can provide. Thus, any Medicare cuts for 340B drugs undermine the congressional intent of the program by reducing the 340B savings available for covered entities to maintain, improve and expand access to health care services for patients.</p><p>We also encourage MedPAC’s to analyze how 340B ceiling prices are set and the factors that influence those prices. 340B ceiling prices are based on two components: the average manufacturer price of the drug and a unit rebate amount. For brand-name drugs, which account for a majority of 340B volume, the unit rebate amount is statutorily set at 23.1%. However, the unit rebate amount is subject to an inflationary penalty where it can exceed 23.1% if a drug company decides to increase the price of their drug faster than the rate of general inflation. Drug companies routinely increase their prices faster and higher than the rate of inflation. A study by the Assistant Secretary for Planning and Evaluation found that from January 2022 through January 2023, approximately 2,000 drugs experienced price increases greater than inflation, with an average price increase of 15.2%.<sup>3</sup> As a result, for many 340B drugs, the ceiling price is well <em>below</em> what is statutorily required, which leads to a greater difference between the ceiling price and the Medicare payment rate. Put another way, any gaps between ceiling prices and Medicare payment rates are a direct result of decisions by drug companies to increase drug prices — not hospitals. As such, already-struggling 340B hospitals should not suffer rate cuts that mainly benefit drug companies. In fact, MedPAC itself has calculated that hospitals’ Medicare margins are nearly <em>negative </em>12%.<sup>4</sup> Payment cuts for 340B drugs would make these margins worse, further jeopardizing hospitals’ ability to furnish programs and services that are supported by 340B savings.</p><p><strong>Given the important role that the 340B program plays in allowing hospitals to expand access to care for the patients and communities they serve, we urge MedPAC to carefully consider the negative consequences for patients and providers in any future efforts to cut Medicare payments to 340B hospitals.</strong></p><h2>IRF Payments</h2><p>MedPAC has considered potential approaches to lowering Medicare payments for select conditions in IRFs but we<strong> continue to discourage it from recommending such changes.</strong> Specifically, at the April 2024 meeting, the commissioners specifically considered whether conditions that fall outside the 13 that must account for 60% of IRF beneficiaries (the “60% rule”) should be paid at a lower rate than the one currently provided under the IRF prospective payment system (PPS). As the AHA detailed in response to the first session held on this topic (see AHA’s <a href="/2023-10-27-aha-comments-medpacs-site-neutral-nurse-staffing-requirements-october-2024-meeting-discussion">October 2023 letter</a>), such an approach not only would be far less precise and patient-centric than the current IRF PPS but also would have the potential to curtail access to needed rehabilitation services. <strong>To that end, the AHA is pleased that staff and commissioners seemed to acknowledge even more shortcomings of this approach.</strong></p><p>In AHA’s October 2023 letter, we explained why use of the 60% rule for payment determinations is misplaced. This letter will not recount those points in their entirety, but we would reiterate that the 60% rule was never intended as and has never been used as a tool to determine coverage or payment for IRF services. Instead, this rule has served <em>solely </em>as a tool to distinguish IRFs from other hospitals at the very highest level. Therefore, applying this broad classification tool to patient-specific determinations regarding payment or coverage is misguided.<strong> </strong>Further, and as MedPAC acknowledged, Medicare coverage regulations require that 100% of all Medicare beneficiaries treated in IRFs meet specific, detailed medical necessity requirements.<sup>5</sup> As such, we urge the commission’s to refrain from using terms “compliant” and “noncompliant” to describe IRF patient groups that fall into and out of the 60% rule, respectively, despite the explanations that MedPAC staff provided regarding these terms.</p><p>To this point, the AHA appreciated discussion from MedPAC commissioners and staff during this session acknowledging the difficulty involved in determining the appropriateness of IRF admissions for individual patients. Indeed, medical necessity determinations do not rely on the primary condition of the patient but instead involve a thorough assessment of the patient's medical and functional status and prognosis.<sup>6</sup> Therefore, the AHA endorses the view that this decision is a judgement call best made by the expert clinicians treating the patient.<strong> </strong>Thus, while it may appear based on the data alone that there is significant overlap in patient types treated in IRF and SNFs, experienced clinicians have utilized their expertise to screen patients and distinguish those that are best suited for IRFs based on characteristics that may not be readily apparent in the data MedPAC has available to them. <strong>Thus, we are concerned MedPAC’s premise for leveling payment for supposedly overlapping patient types is misguided, as those placed in IRFs have been properly screened and distinguished from other patients.</strong></p><p>The IRF PPS is a sophisticated payment system that takes numerous factors into account to provide a targeted payment amount. Through the IRF PPS, CMS analyzes the relative resource use of each diagnosis group (referred to as case-mix groups) and assigns a relative weight. Through this mechanism, the agency is already accounting for differences in resource use among patients and adjusts payments accordingly. <strong>However, despite the use of this refined payment system, MedPAC is considering imposing a blunt and imprecise instrument — one that would group a third or more of the current patient population into a single noncompliant category — to summarily reduce payment. It would be both inconsistent with MedPAC’s overarching goal of improving payment accuracy, as well as harmful to patients, to modify the current payment system in this way.</strong> The AHA appreciates the need to explore avenues to improve the accuracy of payments but does not believe such a broad instrument is appropriate to do so.</p><p>Beyond the use of the 60% rule, the AHA does not believe that attempting to align payments between IRFs and SNFs more generally is a worthwhile endeavor. This is due to the vastly different regulatory environments under which IRFs (hospitals) and SNFs (subacute facilities) operate. The difficulties in aligning payment incentives and other important factors between these and other sites of care became apparent during MedPAC’s work on the Unified Post-Acute Care payment system. In addition, and as was noted during the commission’s discussion, IRFs provide a vastly more intensive course of treatment than SNFs. Further, Medicare cost sharing, lifetime coverage and several other factors vary greatly between the two types of facilities. Therefore, to the extent MedPAC continues work on the IRF PPS, the AHA encourages it to examine payment accuracy within the IRF PPS, rather than attempt to analogize IRFs and SNFs.</p><p>When comparing IRFs and SNFs, MedPAC has expressed a reluctance to utilize functional data due to it being provider reported and tied to payment and therefore potentially prone to inaccuracies. The AHA urges MedPAC to reconsider this position. While no data are perfect, the functional data provided, especially on aggregate, should not be considered any more flawed than other Medicare data which require provider submitted information, including information that impacts payment. This includes cost reports, claims and other data on which MedPAC regularly relies, and all of which influences reimbursement for providers. Instead of dismissing this data, we respectfully request that it be considered as one of many points of insight into the experience of patients treated at IRFs.</p><h2>Physician Fee Schedule Updates</h2><p>We appreciate MedPAC’s recognition that the current framework for physician payment is inadequate and that it is considering policy approaches to address these issues. The impacts of inflation and rising input costs continue to outpace the reimbursement for services covered by the PFS. There is a widening gap between physician payment and increases in the Medicare Economic Index (MEI), and we have previously <a href="/system/files/media/file/2023/01/aha-comments-re-medpac-final-payment-update-recommendations-1-3-23.pdf">commented</a> on the need to right size payment with inflation. As detailed below, we have specific feedback on the three policy approaches MedPAC is considering.</p><p>We oppose updating physician practice expenses (PEs) based on the hospital market basket minus productivity, as this approach would add unnecessary complexity by creating two conversion factors (one for practice expenses and another for malpractice and work expenses) and would inappropriately penalize clinicians performing low practice expense services and those operating in facility settings. We directionally support updating physician payments by the MEI but do not think the discussed MEI minus one percentage point update is nearly sufficient to cover the existing shortcomings in physician reimbursement. Finally, we support extending Advanced-Alternative Payment Model (A-APM) incentive payments to support transition to value-based care.</p><p><strong>However, we are concerned that MedPAC seems to be framing many of their discussions and approaches on physician payment updates with a goal of reducing site-of-service payment differentials. The AHA strongly opposes site-neutral payments, which reduce access to critical health care services, especially in rural and other underserved areas.</strong> <strong>Site-neutral policies ignore fundamental differences between hospital outpatient departments (HOPDs) and other outpatient care settings.</strong> Hospitals and health systems provide unique benefits to their community like 24/7 standby capacity for emergencies and special service capabilities such as burn, neonatal, psychiatric services, and more. HOPDs also are required to comply with more regulatory and safety codes and care for sicker, more complex patients than other care settings. Expanding site-neutral cuts would endanger the critical role hospitals and health systems play in their communities, including access to care for patients. </p><h3>Approach 1: Update Physician PEs Based on Hospital Market Basket Minus Productivity.</h3><p><strong>We oppose MedPAC’s approach to increase the PE portion of fee schedule payments by the hospital market basket minus productivity. </strong>First, this proposal would exacerbate disparities in reimbursement in certain specialty areas by effectively penalizing clinicians performing low PE services because their payments would be increased at a lower rate than clinicians performing high PE services. It also would penalize clinicians performing services in facility settings such as those in critical care, hospital medicine, emergency medicine and behavioral health. Decreasing reimbursement for certain physicians in order to augment reimbursement for others risks reducing patient access and exacerbating provider shortages.</p><p>In addition, this option would add unnecessary complexity by creating separate conversion factors for the PE versus the work and malpractice components of the physician reimbursement equation. Yet, physician work and malpractice insurance are also impacted by inflation that has not been adequately accounted for by payment updates. Indeed, a recent report from AMA found that increases in malpractice insurance premiums are accelerating. In 2018, 13.7% of malpractice premiums increased year-to-year, yet from 2020 through 2022, 30% of premiums increased annually.<sup>7</sup> All three factors contributing to physician reimbursement (practice expense, work and malpractice relative value units (RVUs)) require updates to account for inflation and rising input costs.</p><p>We also reiterate our previous concerns regarding site-neutral payments. Both Approach 1 and Approach 2 (listed below) are framed in the context of reducing site of service payment differentials. Proposals that attempt to treat HOPDs the same as independent physician offices and other ambulatory sites of care ignore the very different level of care provided by hospitals and the needs of the patients and communities cared for in that setting. These outpatient departments treat more patients from medically underserved populations who tend to be sicker and more complex to care for than Medicare patients treated in independent physician offices and ambulatory surgical centers. They also are held to more rigorous licensing, accreditation and regulatory requirements.</p><p>The cost of care delivered in hospitals and health systems, including HOPDs, is fundamentally different than other sites of care and thus needs to consider the unique benefits that only they provide to their communities. This includes maintaining standby capacity for natural and man-made disasters, public health emergencies, other unexpected traumatic events, and the delivery of 24/7 emergency care to all who come through their doors regardless of ability to pay or insurance status. Since the hospital safety-net and emergency standby roles are funded through the provision of all outpatient services, expanding site-neutral cuts to additional HOPDs and the outpatient services they provide would endanger the critical role that they play in their communities, including access to care for patients, especially the most medically complex<strong>. The AHA strongly opposes further site-neutral payment cuts, which threaten access to care. </strong></p><h3>Approach 2: Update Payment Rates by MEI Minus One Percentage Point.</h3><p><strong>While we directionally support updating rates consistent with the MEI, MEI minus 1% is insufficient to cover existing shortcomings in physician reimbursement.</strong> Indeed, we echo the concerns expressed by many commissioners that this could result in a negative compounding effect over time. We encourage MedPAC to pursue annual updates to payment rates that are more in line with inflation and are made outside budget neutrality.</p><p><strong>We also are encouraged that MedPAC is evaluating strategies to improve RVU calculations. </strong>We suggest that the commission revisit this issue once updated Physician Practice Information Survey (PPIS) data are available. The AMA PPIS provides critical data to support updates to the MEI and Resource Based Relative Value Scale. Indeed, integration of PPIS data was phased into CMS RVU calculations over the course of 2010-2014. Current rate setting is based on AMA PPIS data, supplemental data sources as required by Congress, and in certain circumstances, crosswalks in indirect PE allocation. PPIS surveys are still in the field through June 2024, with data available to CMS in early 2025. We believe it would be premature to discuss strategies to improve RVU calculations without the latest data. Additionally, the agency is still evaluating trends and impact on data from COVID-19.</p><p>We also caution that any updates to RVUs would cause a redistribution of<strong> </strong>payments based on physicians’ geography and specialty. The same can be said for efforts to rebase and rescale MEI, as was suggested by the discussion.<strong> </strong>Historically, the MEI had been based on 2006 data representing only self-employed physicians. In the calendar year (CY) 2023 PFS final rule, CMS rebased and revised the MEI to use publicly available data sources for 2017 input costs that represent all types of physician practice ownership. However, the agency has delayed implementation of the rebased and revised MEI. This was because while it anticipated that revised weights would not impact overall spending for PFS services, they would impact distribution of payments based on geography and specialty. <strong>We have echoed CMS’ concerns about the redistributive effects of the new MEI and therefore support a further delay in its implementation as we commented in response to the CY 2024 PFS proposed rule.</strong><sup>8</sup> Updating the MEI would cause significant cuts for certain specialties like cardiac surgery, neurosurgery and emergency medicine. In addition to significant specialty redistribution, geographic redistribution also would occur. For example, a significant reduction in the weight of office rent would lead to reductions in payments for urban localities. These changes would, of course, come on top of the other substantial cuts physicians have seen in recent years, including the year over year decreases to the conversion factor. As such, careful evaluation is necessary particularly given current workforce shortage concerns.</p><p><u></u></p><h3>Approach 3: Extend the A-APM Participation Bonus.</h3><p><strong>We support MedPAC’s approach to extend A-APM incentive payments. Indeed, we have urged Congress to do the same to facilitate the transition to value-based payment. </strong>Specifically, the Medicare Access and CHIP Reauthorization Act (MACRA) provided 5% incentive payments for clinicians participating in A-APMs to support non-fee-for-service programs like meal delivery programs, transportation services, digital tools and care coordinators which promote population health, among other services. These incentive payments have been critical to support organizations in transitioning to value-based care. However, MACRA only provided the A-APM bonuses through the CY 2024 payment period. The Consolidated Appropriations Act (CAA) of 2023 extended these bonus payments through 2025 (albeit at 3.5% vs. 5%), and the most recent CAA of 2024 included an extension through 2026 at 1.88%.</p><p>In addition, we encourage MedPAC to recommend removal of CMS’ problematic high- and low-revenue thresholds for APMs. CMS has used this label as a proxy measure to, for example, determine if an organization is supporting underserved populations. Yet, there is no valid reason to conclude that this delineation is an accurate or appropriate predictor of whether an organization treats an underserved population. In fact, analysis suggests that critical access hospitals, federally qualified health centers and rural health centers are predominantly classified as high revenue. Further, both low- and high-revenue organizations are working to address health equity as part of their care transformation work. Assistance investing in these efforts would help across the board.</p><h2>Telehealth Status Report</h2><p>We appreciate MedPAC’s continued discussion of telehealth utilization. Telehealth has always provided patients with increased access and convenience, but waivers implemented during the COVID-19 pandemic have allowed broader portions of the population to experience the benefits of virtual care.</p><p>Prior to the public health emergency (PHE), telehealth utilization was minimal due to limited fee-for-service coverage. Artificial barriers, such as requirements for patients to be located in specific settings (like clinics) or geographies (limited to rural areas), meant that relatively few patients could benefit from telehealth services. Telehealth waivers implemented as a result of the PHE have contributed to improved access for millions of Americans, especially those with transportation or mobility limitations. Continuing these flexibilities is necessary to ensure patients’ continued access to high-quality care. Yet, there is currently a patchwork of temporary waivers for telehealth services that, barring further action, will expire at the end of 2024. If this occurs, we risk a telehealth “cliff” that would negatively impact patient access in all communities.</p><p><strong>Recognizing both the immediate and potential long-term benefits of telehealth, we recommend permanent extension of certain telehealth waivers, as we have communicated to Congress.</strong><sup>9</sup></p><ul><li>Permanently eliminate originating- and geographic-site restrictions, thus allowing telehealth visits to occur at any site where the patient is located, including urban areas and the patient’s home.</li><li>Permanently eliminate in-person visit requirements for tele-behavioral health, which would ensure that patients do not need an in-person visit before initiating virtual treatment.</li><li>Permanently remove distant site restrictions on federally qualified health centers and rural health clinics, which would ensure that they can continue to provide telehealth services.</li><li>Permanently allow payment and coverage for audio-only telehealth services.</li><li>Permanently expand eligible telehealth provider types to include physical therapists, occupational therapists, speech-language pathologists and audiologists.</li></ul><p><strong>We encourage MedPAC to also recommend permanent extension of these provisions to support continued access for patients.</strong></p><p>We also have specific feedback regarding a few of the guardrail proposals the commission has discussed, per below.</p><h3>In-person Visit Requirements</h3><p>e appreciate the concerns identified by many of the commissioners regarding in-person visit requirements and the potential disruption these options would have on existing care patterns, particularly in clinical areas like behavioral health.<strong> </strong>While some patients may benefit from a periodic in-person evaluation, it should be left to clinical judgment when and how frequently these should occur, rather than an arbitrary general requirement. Indeed, adding a requirement for an in-person visit at specific cadences may unintentionally lead to scheduling of additional appointments that otherwise are not clinically necessary simply to “check the box” that the patient had an in-person visit to continue virtual services. <strong>As such, we urge MedPAC to recommend repealing the in-person visit requirements for tele-behavioral health services.</strong></p><p>The CAA of 2021 required that a patient must receive an in-person evaluation six months before they can initiate tele-behavioral health treatment and also must have an in-person visit annually thereafter. This requirement has been waived since the start of the PHE; however, there are concerns about the impact that reinstatement of this policy or enactment of similar in-person visit policies for other specialty areas could have on patient access.</p><p>This requirement was derived as a cost savings measure rather than a policy to support clinical necessity. As such, we are very concerned about its potentially negative impacts on access to care. Specifically, particularly for behavioral health, there is a widening gap between provider capacity and patient demand. Over 30% of the U.S. adult population has reported symptoms of anxiety and depression since the start of the pandemic (compared to 11% prior), and provider shortages in areas like psychiatry are only expected to grow (estimates for 2024 indicate a shortfall of between 14,280-31,091 psychiatrists nationally).<sup>10,11</sup></p><p>We also know that the widening gap between patient demand and provider capacity is being felt even more acutely in rural and underserved communities. This may be part of the reason that the majority of patients utilizing tele-behavioral health services during the pandemic were in rural areas (55%).<sup>12 </sup>These patients are not able to readily see an in-person provider given the shortages in their geographic area and in many cases would need to drive several hours to see the closest provider in person. Therefore, in-person visits may simply not be an option for many patients in rural and underserved communities.</p><h3>Guardrail Policies</h3><p>While we appreciate the commission’s discussion of guardrail policy options to ensure appropriate utilization of telehealth, we point to recent publications issued by the Department of Health and Human Services Office of Inspector General (OIG) that found no widespread instances of fraud, waste and abuse attributed to telehealth during the PHE.<sup>13 </sup>In its most recent telehealth report, the OIG did not make “recommendations because providers generally met Medicare requirements when billing for E/M services provided via telehealth and unallowable payments we identified resulted primarily from clerical errors or the inability to access records.”<sup>14 </sup>In addition, a previous OIG report found that only 0.2% of all telehealth providers were “potentially high-risk” for fraud, waste and abuse during the PHE.<sup>15</sup> Policies should support the 99.8% of providers safely and compliantly delivering services.</p><p>We recognize and appreciate the importance of identifying program integrity risks and establishing reasonable guardrails to prevent fraud, waste and abuse. However, the fact remains that virtually all providers who administered telehealth services during the PHE did so in a compliant manner; as such, concerns about propensity for widespread fraud, waste and abuse are not supported by the data.<strong> Therefore, establishing additional guardrails above and beyond the existing policies for the general Medicare program are not warranted at this point.</strong></p><p><u></u></p><p>MedPAC also considered “outlier guardrail” policies that focus on providers who bill disproportionately more telehealth services. <strong>We are concerned that such a focus also would do little to identify fraud and abuse. </strong>For example, given physician shortages in areas like behavioral health, an increasing number of clinicians are solely providing virtual services. Doing so does not indicate a lack of compliance, but only an effort to provide access to as many patients as possible — something providers should not be penalized for through increased administrative burden and review.</p><p><u></u></p><h3>Incident-to Services</h3><p>We disagree with policy options to remove incident-to billing for telehealth. Doing so would limit the ability to leverage telehealth to support certain services, such as virtual supervision. As an example, prior to the PHE, CMS required that physicians serving in supervisory capacities be physically present in the same office suite when auxiliary personnel performed visits under their supervision and be available if assistance was needed. However, during the PHE, this supervision could be completed virtually using real-time audio-video technology, which supported improved access for geographically dispersed patients. Such flexibilities that leverage geographically dispersed providers are becoming more critical, especially as staffing shortages become more severe. This is also true for hospitals and health systems operating across multiple locations. <strong>Therefore, we encourage MedPAC </strong><em><strong>not</strong></em><strong> to pursue policy options that would remove telehealth incident-to options, as this would limit patient access.</strong></p><p>We thank you for your consideration of our comments. Please contact me if you have questions or feel free to have a member of your team contact Shannon Wu, AHA’s director of payment policy, at <a href="mailto:swu@aha.org">swu@aha.org</a> or 202-626-2963.</p><p>Sincerely,</p><p>/s/</p><p>Ashley B. Thompson<br>Senior Vice President<br>Public Policy Analysis and Development </p><p>Cc: Paul Masi, M.P.P.<br>MedPAC Commissioners<br>__________<br> <br><sup>1</sup> <a href="https://www.healthaffairs.org/content/forefront/30-years-340b-preserving-health-care-safety-net">https://www.healthaffairs.org/content/forefront/30-years-340b-preserving-health-care-safety-net</a></p><p><sup>2</sup> <a href="/340b-case-studies">/340b-case-studies</a> <br><sup>3</sup> <a class="ck-anchor" href="https://aspe.hhs.gov/reports/changes-list-prices-prescription-drugs" id="https://aspe.hhs.gov/reports/changes-list-prices-prescription-drugs">https://aspe.hhs.gov/reports/changes-list-prices-prescription-drugs</a><br><sup>4</sup> <a class="ck-anchor" href="https://www.medpac.gov/wp-content/uploads/2024/03/Mar24_Ch3_MedPAC_Report_To_Congress_SEC.pdf" id="https://www.medpac.gov/wp-content/uploads/2024/03/Mar24_Ch3_MedPAC_Report_To_Congress_SEC.pdf">https://www.medpac.gov/wp-content/uploads/2024/03/Mar24_Ch3_MedPAC_Report_To_Congress_SEC.pdf</a><br><sup>5</sup> These medical necessity requirements include requiring at least 15 hours of therapy per week, a multiple disciplinary approach to care, close physician supervision, rehabilitation nursing and several others.<br><sup>6</sup> The preadmission screening requirement at 42 C.F.R. § 412.622(a)(4)(i) must be conducted by a licensed clinician within 48 hours of admission, include a detailed review of the patient’s condition, history, prior and expected level of function, expected level of improvement, expected duration of treatment, evaluation of patient’s risk for complications, conditions causing the need for rehabilitation, the detailed therapies needed by the patient, and the discharged expectations for the patient. The rehabilitation physician at the IRF must review and concur with the findings of this screening.<br><sup>7</sup> <a class="ck-anchor" href="https://www.ama-assn.org/practice-management/sustainability/medical-liability-premium-hikes-continue-4th-straight-year" id="https://www.ama-assn.org/practice-management/sustainability/medical-liability-premium-hikes-continue-4th-straight-year">https://www.ama-assn.org/practice-management/sustainability/medical-liability-premium-hikes-continue-4th-straight-year</a> <br><sup>8</sup>   <a class="ck-anchor" href="/system/files/media/file/2023/09/aha-comments-on-cms-physician-fee-schedule-proposed-rule-for-calendar-year-2024-letter-9-11-23.pdf" id="/system/files/media/file/2023/09/aha-comments-on-cms-physician-fee-schedule-proposed-rule-for-calendar-year-2024-letter-9-11-23.pdf">/system/files/media/file/2023/09/aha-comments-on-cms-physician-fee-schedule-proposed-rule-for-calendar-year-2024-letter-9-11-23.pdf</a><br><sup>9</sup> <a class="ck-anchor" href="/2024-04-10-aha-house-statement-legislative-proposals-support-patient-access-telehealth-services" id="/2024-04-10-aha-house-statement-legislative-proposals-support-patient-access-telehealth-services">/2024-04-10-aha-house-statement-legislative-proposals-support-patient-access-telehealth-services</a><br><sup>10 </sup><a href="https://www.kff.org/statedata/mental-health-and-substance-use-state-fact-sheets/">https://www.kff.org/statedata/mental-health-and-substance-use-state-fact-sheets/</a></p><p><sup>11</sup> <a href="https://pubmed.ncbi.nlm.nih.gov/29540118/">https://pubmed.ncbi.nlm.nih.gov/29540118/</a> <br><sup>12</sup> <a class="ck-anchor" href="https://www.kff.org/coronavirus-covid-19/issue-brief/telehealth-has-played-an-outsized-role-meeting-mental-health-needs-during-the-covid-19-pandemic/" id="https://www.kff.org/coronavirus-covid-19/issue-brief/telehealth-has-played-an-outsized-role-meeting-mental-health-needs-during-the-covid-19-pandemic/">https://www.kff.org/coronavirus-covid-19/issue-brief/telehealth-has-played-an-outsized-role-meeting-mental-health-needs-during-the-covid-19-pandemic/</a></p><p><sup>13</sup><a href="https://oig.hhs.gov/oas/reports/region1/12100501.asp">https://oig.hhs.gov/oas/reports/region1/12100501.asp</a></p><p><sup>14</sup> <a href="https://oig.hhs.gov/oas/reports/region1/12100501.asp">https://oig.hhs.gov/oas/reports/region1/12100501.asp</a></p><p><sup>15</sup><a href="https://www.pandemicoversight.gov/media/file/telehealthfinal508nov30pdf">https://www.pandemicoversight.gov/media/file/telehealthfinal508nov30pdf</a> <br> </p></div></div></div> Mon, 12 Aug 2024 18:56:30 -0500 Inpatient Rehab Facility PPS <div class="container"><div class="row"><div class="col-md-8"><p>The Centers for Medicare & Medicaid Services (CMS) July 31 issued its <a href="https://www.federalregister.gov/public-inspection/2024-16911/medicare-program-inpatient-rehabilitation-facility-prospective-payment-system-for-federal-fiscal" title="Final Rule">final rule</a> for the inpatient rehabilitation facility (IRF) prospective payment system (PPS) for fiscal year (FY) 2025. This rule updates IRF PPS payments relative to the current fiscal year, as well as implements other payment policies and the quality reporting program (QRP).</p><div class="panel module-typeC"><div class="panel-heading"><h2>Key Highlights</h2><p>The final rule:</p><ul><li>Updates payment rates by a net 3.0%, relative to FY 2024. This includes amarket basket update of 3.5%, less a productivity cut of 0.5%.</li><li>Increases the high-cost outlier threshold, which will result in an additional 0.2%decrease to overall payments.</li><li>Updates the wage index using the most recent Office of Management andBudget (OMB) statistical area delineations based on the 2020 DecennialCensus.</li><li>Adopts and modifies patient assessment items addressing social determinantsof health.</li></ul></div></div><h2>AHA TAKE </h2><p>The final rule contains mostly routine payment updates that do not deviate in significant ways from the proposed rule. However, the Medicare program market basket updates continue to fall well short of the sharply increased costs hospitals have faced in recent years. The AHA is disappointed CMS did not take steps to address these shortcomings and will continue to pursue potential modifications to these updates in the future. </p><p>Highlights from the rule follow. </p><h2>IRF PPS PAYMENT CHANGES</h2><p><strong>FY 2025 Payment Updates</strong>. CMS estimates that the final rule will increase net payments to IRFs in FY 2025 by 3.0% overall ($300 million) relative to FY 2024. This includes a 3.5% market basket update offset by a statutorily mandated productivity factor cut of 0.5%. In addition to this, there also will be an estimated 0.2% decrease in payments ($20 million) due to an increase to the outlier threshold.</p><p>The 3.5% market basket update is based on the latest available forecast for FY 2025 and is higher than the 3.2% that CMS proposed. Based on this, as well as the productivity cut, CMS updated the standard-payment conversion factor from $18,541 to $18,907 for FY 2025. This update also includes a small budget neutrality adjustment for wage index adjustments and changes to the labor-related share of payments.</p><p>CMS also finalized its annual update to the weighting and average length of stay figures for case-mix group weights and tiers. These updated weights are available in Table 3 of the final rule. CMS estimates 99.2% of IRF discharges will be in case-mix groups and tiers that will experience a less than 5% change in its weight relative to FY 2024 weights.</p><p><strong>Labor-related Share</strong>. As a result of using updated data, CMS finalized an update to the labor-related share – it will be 74.4% in FY 2025, which is a small increase from the FY 2024 level of 74.1%.</p><p><strong>Wage Adjustment</strong>. CMS finalized its proposal to update the IRF PPS wage index using the most recent OMB statistical area delineations based on the 2020 Decennial Census, which revises the existing core-based statistical areas (CBSAs). The agency’s permanent 5% cap on negative wage index changes (regardless of the underlying reason for the decrease) remains in place; as such, all wage indices will be no less than 95% of the prior year’s wage index.</p><p>In addition, CMS finalized a policy that will phase out the rural adjustment for IRFs that transition from rural to urban status under the new CBSAs. These IRFs will receive two-thirds of the rural adjustment in FY 2025, one-third of the rural adjustment in FY 2026, and no rural adjustment in FY 2027. For FY 2025, CMS says that eight IRFs will change their status from rural to urban.</p><h2>IRF QUALITY REPORTING PROGRAM </h2><p>CMS did not adopt, modify, or remove any quality measures from the QRP in this rule. </p><p>CMS finalized its proposal to require IRFs to report four new patient assessment items in the IRF-PAI under the social determinants of health (SDOH) category beginning with the FY 2028 IRF QRP. The items are currently collected in the AHC HRSN Screening Tool, and include:</p><ul><li>Living situation: addresses housing stability</li><li>Food: addresses frequency of worry that food would run out</li><li>Food: addresses food running out without ability to buy more</li><li>Utilities: addresses utilities being shut off in home</li></ul><p>In addition, CMS will modify the patient assessment item on Transportation to simplify the response options and revise the look-back period. Finally, the agency will remove the Admission Class item from the IRF-PAI beginning Oct. 1, 2026, as the item is not used to calculate quality measures or other purposes.</p><h2>FURTHER QUESTIONS</h2><p>Please contact Jonathan Gold, AHA senior associate director of policy, at<a href="mailto:jgold@aha.org" target="_blank" title="Jonathan Gold"> jgold@aha.org</a> with any questions related to payment, and Caitlin Gillooley, AHA director of policy, at <a href="mailto:cgillooley@aha.org" target="_blank" title="Caitlin Gillooley email">cgillooley@aha.org</a>, regarding any quality-related questions.</p><p> </p></div><div class="col-md-4"><p><a href="/system/files/media/file/2024/08/cms-releases-fy-2025-inpatient-rehabilitation-facility-pps-final-rule-bulletin-8-1-2024.pdf" target="_blank" title="Click here to download the Special Bulletin: CMS Releases FY 2025 Inpatient Rehabilitation Facility PPS Final Rule PDF."><img src="/sites/default/files/2024-08/cover-cms-releases-fy-2025-inpatient-rehabilitation-facility-pps-final-rule-bulletin-8-1-2024.png" data-entity-uuid data-entity-type="file" alt="Special Bulletin: CMS Releases FY 2025 Inpatient Rehabilitation Facility PPS Final Rule cover." width="NaN" height="NaN"></a></p></div></div></div> Thu, 01 Aug 2024 15:39:06 -0500 Inpatient Rehab Facility PPS /news/headline/2024-07-31-cms-finalizes-3-payment-update-irfs <p>The Centers for Medicare & Medicaid Services July 31 released the fiscal year 2025 <a href="https://public-inspection.federalregister.gov/2024-16911.pdf" target="_blank">final rule</a> for inpatient rehabilitation facilities, which will update IRF payments by an estimated 3% overall (or $300 million) in FY 2025. This includes a 3.5% market basket update, which is reduced by a 0.5 percentage point cut for productivity. However, IRF payments will be further decreased by an estimated 0.2% ($20 million) due to the updated outlier threshold. <br><br>While CMS did not propose to adopt or remove any quality measures from the IRF Quality Reporting Program, the agency finalized its proposal to adopt and modify certain patient assessment items related to health-related social needs; IRFs will be required to collect and report specific data elements related to living situation, food and utilities beginning with the FY 2028 IRF QRP.</p><p>AHA members will receive a Special Bulletin with more details.</p> Wed, 31 Jul 2024 17:38:32 -0500 Inpatient Rehab Facility PPS /news/headline/2024-05-24-aha-comments-snf-irf-proposed-rules <p>AHA commented May 24 on the Centers for Medicare & Medicaid Services' proposed rules for the <a href="/lettercomment/2024-05-24-aha-comment-letter-cms-skilled-nursing-facility-proposed-payment-rule-fy-2025">skilled nursing</a> and <a href="/lettercomment/2024-05-24-aha-comment-letter-cms-inpatient-rehabilitation-facility-proposed-payment-rule-fy-2025">inpatient rehabilitation facility</a> prospective payment systems for fiscal year 2025, expressing concerns about CMS' approach to market basket updates for both, claiming they fail to account for inflation and growth. <a href="/news/headline/2024-03-28-cms-proposes-41-payment-update-snfs-and-revise-nursing-home-enforcement-authority-fy-2025">SNFs</a> are proposed to receive a 4.1% net update for FY 2025, while <a href="/news/headline/2024-03-27-cms-proposes-28-payment-update-irfs">IRFs</a> would receive a proposed 2.8% increase. <br><br>AHA also expressed concerns about quality reporting program requirements under both proposed rules. </p> Fri, 24 May 2024 11:03:28 -0500 Inpatient Rehab Facility PPS /lettercomment/2024-05-24-aha-comment-letter-cms-inpatient-rehabilitation-facility-proposed-payment-rule-fy-2025 <p>May 24, 2024</p><p>The Honorable Chiquita Brooks-LaSure<br>Administrator<br>Centers for Medicare & Medicaid Services<br>Department of Health and Human Services<br>Attention: CMS-1804-P<br>P.O. Box 8016<br>Baltimore, MD 21244–8016.</p><p><em><strong>Re: Medicare Program; Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2025 and Updates to the IRF Quality Reporting Program; 89 Fed. Reg. 22,246 (March 29, 2024).</strong></em></p><p>Dear Administrator Brooks-LaSure:</p><p>On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, including approximately 900 inpatient rehabilitation facilities (IRF), and our clinician partners — more than 270,000 affiliated physicians, two million nurses and other caregivers — and the 43,000 health care leaders who belong to our professional membership groups, the ���������� Association (AHA) appreciates the opportunity to comment on the Centers for Medicare & Medicaid Services’ (CMS) fiscal year (FY) 2025 IRF prospective payment system (PPS) proposed rule.</p><p>The AHA is appreciative that CMS did not propose any major payment or coverage changes to the IRF PPS; this predictability will be valuable to IRFs as they continue to serve their patients and communities while facing mounting financial pressures. To that end, we continue to be concerned about shortcomings in the annual payment updates for IRFs — in particular, the market basket forecasts and updates. For example, the forecasts on which CMS relies have been consistently under-forecasting cost growth for IRFs. In addition, the actual market basket increases seem to be falling well short of inflation. Therefore, <strong>AHA encourages CMS to consider whether adjustments are necessary in its approach to annual market basket updates.</strong></p><p>View the detailed letter below. </p> Fri, 24 May 2024 10:50:20 -0500 Inpatient Rehab Facility PPS /lettercomment/2024-05-23-aha-support-senate-bill-hospital-inpatient-services-modernization-act-2024 <p>May 23, 2024</p><table><tbody><tr><td>The Honorable Tom Carper <br>U.S. Senate<br>513 Hart Senate Building<br>Washington, DC 20510</td><td>The Honorable Tim Scott<br>U.S. Senate<br>104 Hart Senate Office Building<br>Washington, DC 20510</td></tr></tbody></table><p>Dear Senators Carper and Scott:</p><p>On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and the 43,000 health care leaders who belong to our professional membership groups, the ���������� Association (AHA) is pleased to support the Hospital Inpatient Services Modernization Act of 2024 (S.4350) to extend the acute care hospital-at-home (H@H) program for five years.</p><p>H@H programs provide a safe and innovative way to care for patients in the comfort of their homes. This kind of care is well suited for medium-acuity patients who need hospital-level care but are considered stable enough to be safely monitored and treated by their doctor and a team of medical professionals while in the comfort of their own home.</p><p>We are encouraged to see that your bipartisan bill includes a five-year extension of the H@H program. Standing up a H@H program requires logistical and technical work, with an investment of time, staff and money. In addition to being approved for the federal waiver, some providers must navigate additional regulatory requirements at the state level. For some, this whole process could take a year or more to complete before that first patient is seen at home. A longer extension of the H@H program would provide much-needed stability for existing programs to continue providing care to their patients, and it would give time for others to start programs allowing more patients to benefit from this innovative program.</p><p>We thank you for your leadership in introducing the Hospital Inpatient Services Modernization Act of 2024.</p><p>Sincerely,<br>/s/<br>Lisa Kidder Hrobsky<br>Senior Vice President,<br>Advocacy and Political Affairs</p> Thu, 23 May 2024 13:42:17 -0500 Inpatient Rehab Facility PPS