/ en Mon, 28 Apr 2025 04:55:01 -0500 Tue, 26 Nov 24 13:37:58 -0600 /news/headline/2024-11-26-aha-comments-cms-fy-2025-ipps-low-wage-policy <p>The AHA <a href="/lettercomment/2024-11-26-aha-comments-cms-fy-2025-wage-index-values" title="AHA wage index comment">commented</a> Nov. 26 on the Centers for Medicare & Medicaid Services’ hospital inpatient prospective payment system interim final action on revising the Medicare wage index values for fiscal year 2025. CMS is removing the low wage index policy and its related budget neutrality factor for FY 2025, following a July ruling by the U.S. Court of Appeals for the D.C. Circuit that determined CMS lacked authority to adopt the policy for FY 2020 and that it must be vacated. CMS has not indicated if and how it would address payments made to hospitals under the policy for FYs 2020-2024. The AHA urged CMS not to seek a revocation of the funds hospitals received under the policy during that period. <br> <br>"The AHA has long stated that while we appreciated CMS’ recognition of the wage index’s shortcomings, the agency should not have implemented this policy by penalizing all hospitals, especially when Medicare already pays far less than the cost of providing care," AHA wrote. "These funds supported low-wage hospitals during the COVID-19 pandemic and increased payments by roughly $300 million for the first year of policy. This included helping nearly 800 rural hospitals when rural hospital closures hit an all-time high, with 19 hospitals closing in 2020 and two additional closures in 2021." </p> Tue, 26 Nov 2024 13:37:58 -0600 Medicare Area Wage Index (AWI) /2023-04-11-cms-releases-hospital-inpatient-pps-proposed-rule-fiscal-year-2024 <div class="container"> <div class="row"> <div class="col-md-8"> <p>The Centers for Medicare & Medicaid Services (CMS) April 10 issued its hospital inpatient prospective payment system (PPS) and long-term care hospital (LTCH) PPS <a href="https://www.federalregister.gov/public-inspection/2023-07389/medicare-program-proposed-hospital-inpatient-prospective-payment-systems-for-acute-care-hospitals" target="_blank">proposed rule</a> for fiscal year (FY) 2024. This Special Bulletin reviews highlights of the inpatient PPS provisions in the rule, while the LTCH PPS provisions are covered in a separate Special Bulletin.</p> <p>The rule proposes a net 2.8% rate increase for inpatient PPS payments in FY 2024. This 2.8% payment update reflects a hospital market basket increase of 3.0% as well as a productivity cut of 0.2%. It would increase hospital payments by $3.3 billion, minus a proposed $115 million decrease in disproportionate share hospital payments (largely due to a decrease in the uninsured) and proposed $460 million decrease in new technology add-on payments.</p> .pane { border: solid 1px #9d2235 !important; } .module-typeC { border: solid 1px #9d2235 !important; } <div class="panel module-typeC"> <div class="panel-heading"> <h3 class="panel-title">Key Highlights</h3> </div> <div class="panel-body"> <p>The proposed rule would:</p> <ul> <li>Increase inpatient PPS payment rates by a net 2.8% in FY 2024.</li> <li>Continue the low wage index hospital policy for FY 2024, treat rural reclassified hospitals as geographically rural for the purposes of calculating the wage index, and exclude “dual reclass” hospitals from the rural wage index.</li> <li>Allow graduate medical education payments to be made to Rural Emergency Hospitals to support graduate medical training in rural areas.</li> <li>Reinstate program integrity restrictions for physician-owned hospitals approved as “high Medicaid facilities.”</li> <li>Add fifteen new MS-DRGs and delete sixteen MS-DRGs.</li> <li>Add a new health equity adjustment and a sepsis bundle measure to the Hospital Value-based Purchasing Program.</li> <li>Permit the use of web-based surveys for Hospital Consumer Assessment of Healthcare Providers and Systems.</li> <li>Require reporting of “up to date” vaccination status for the Inpatient Quality Reporting health care personnel COVID-19 vaccination measure.</li> <li>Seek information on supporting safety-net providers.</li> </ul> </div> </div> <h2>AHA TAKE</h2> <p>We remain extremely disappointed with CMS’ woefully inadequate proposed payment update of only 2.8% of FY 2024. This payment update fails to account for the record-high inflation and persistent labor, supply and drug costs the hospital field has experienced in the last two years and continues to face currently. Once again, we will urge CMS and the Administration to rectify shortcomings in its previous payment updates and to more appropriately support the field. Without a more substantial update in the final rule, Medicare’s chronic underpayments to hospitals threaten their ability to continue caring for patients and providing essential services for their communities. See AHA’s full <a href="/press-releases/2023-04-10-aha-statement-fy-2024-proposed-ipps-ltch-payment-rule" target="_blank">statement</a> that was shared with the media.</p> <p>Highlights of the inpatient PPS rule follow.</p> <h2>FY 2024 IPPS PROPOSED CHANGES</h2> <h3>Inpatient PPS Payment Update</h3> <p>The proposed rule would increase inpatient PPS rates by a net of 2.8% in FY 2024, compared to FY 2023, after accounting for inflation and other adjustments required by law. Specifically, CMS proposes an initial market-basket update of 3.0%, less 0.2 percentage points for productivity, as required by the Affordable Care Act (ACA). Table 1 below details the impact of proposed policies.</p> <p><img alt="Table 1" data-entity-type="file" data-entity-uuid="e0cf82a2-9d33-4e81-b1cb-3ad77f90bf48" height="123" src="/sites/default/files/inline-images/table-1.png" width="491"></p> <p>Additionally, hospitals not submitting quality data would be subject to a one-quarter reduction of the initial market basket and, thus, would receive an update of 2.05%. Hospitals that were not meaningful users of electronic health records in FY 2020 would be subject to a three-quarter reduction of the initial market basket and, thus, would receive an update of 0.55%. Hospitals that fail to meet both of these requirements would be subject to a payment decrease of 0.2%.</p> <p>For rate-setting purposes, CMS proposes to use FY 2022 MedPAR claims and FY 2021 cost report data, as it ordinarily would have done. Unlike the previous two years, CMS is not proposing any modifications to its usual rate-setting methodologies to account for the impact of COVID-19.</p> <h3>Disproportionate Share Hospital (DSH) Payment Changes</h3> <p>Under the DSH program, hospitals receive 25% of the Medicare DSH funds they would have received under the former statutory formula (described as “empirically justified” DSH payments). The remaining 75% flows into a separate funding pool for DSH hospitals. This pool is updated as the percentage of uninsured individuals changes and is distributed based on the proportion of total uncompensated care each Medicare DSH hospital provides.</p> <p>For FY 2024, CMS estimates the empirically justified DSH payments to be $3.41 billion. It estimates the 75% pool to be approximately $10.22 billion. After adjusting this pool for the percent of individuals without insurance, CMS estimates that it will total approximately $6.71 billion. This results in a decrease in DSH and uncompensated care payments of $115 million, largely due to an estimated decrease in the uninsured.</p> <p>In order to distribute the 75% pool, the agency proposes to continue to cost report data on uncompensated care. Specifically, it would use a three-year average of the three most recent fiscal years for which audited cost report data are available. Last year, CMS used S-10 data from FY 2018 and 2019 cost reports to determine the distribution of DSH uncompensated care payments for FY 2023.</p> <h3>Area Wage Index</h3> <p>CMS makes several proposals in the rule around the area wage index, which adjusts payments to reflect differences in labor costs across geographic areas. First, the agency proposes to continue its low-wage-index hospital policy as established in the FY 2020 final rule. It notes that the Bridgeport Hospital, et al., v. Becerra court ruling found that the secretary did not have authority to adopt the low wage index policy, but that the agency is now appealing the decision and would continue the policy for FY 2024. Under this policy, for hospitals with a wage index value below the 25th percentile, the agency would continue to increase the hospital’s wage index by half the difference between the otherwise applicable wage index value for that hospital and the 25th percentile wage index value for all hospitals. As it has done previously, the agency would reduce the FY 2024 standardized amount for all hospitals to make this policy budget neutral.</p> <p>Second, CMS has previously made policy changes in reaction to numerous courts’ decisions related to the rural wage index and rural floor. In this year’s rule, CMS states that it has taken the opportunity to revisit the case law, public comments and statutory language. Specifically, the agency proposes to include the data from §412.103 hospitals that reclassified from urban to rural in the calculation of the rural wage index. (Last year, the agency finalized the inclusion of these hospitals in the calculation of the rural floor, but not in the calculation of the rural wage index.) Further, the agency is proposing to exclude “dual reclass” hospitals, those with simultaneous §412.103 and Medicare Geographic Classification Review Board reclassifications, from the calculation of the rural wage index.</p> <h3>Medicare Graduate Medical Education (GME)</h3> <p>To increase access to physicians in rural areas, CMS is proposing to allow Rural Emergency Hospitals (REHs) to train residents and receive GME payments. Specifically, beginning on or after Oct. 1, 2023, an REH can include full-time equivalent (FTE) residents training at the REH in its direct GME and indirect medical education (IME) FTE counts for Medicare payment purposes. Alternatively, an REH can also incur direct GME costs and be paid based on reasonable costs for those training.</p> <p>Additionally, CMS is proposing methods to implement payments for nursing and allied health (NAH) education programs. Medicare pays providers for Medicare’s share of the costs that providers incur in connection with approved education activities, including NAH programs. The total spending for these programs is capped at $60 million for any calendar year (CY). Section 4143 of the Consolidated Appropriations Act (CAA) 2023 stipulated that this limit would not apply for CY 2010-2019 to correct for the agency’s mistake in the application of the cap in previous years. CMS is now implementing Section 4143 of the CAA and will correct payments made to providers in the relevant years, as appropriate.</p> <h3>COVID-19 Treatments Add-on Payment (NCTAP)</h3> <p>CMS states that if the public health emergency ends May 2023, as planned by the Department of Health and Human Services, discharges involving eligible products would continue to be eligible for the NCTAP through Sept. 30, 2023 (that is, through the end of FY 2023). After that time, however, NCTAPs and no NCTAP would be made beginning in FY 2024 (that is, for discharges on or after Oct. 1, 2023).</p> <h3>MS-DRG Classification Changes Analysis</h3> <p>CMS is proposing fifteen new MS-DRGs and the deletion of sixteen MS-DRGs, many of which are in MDC 05 (Diseases and Disorders of the Circulatory System).</p> <h3>Recalibration of the FY 2024 MS-DRG Relative Weights</h3> <p>CMS previously used a proxy of standardized drug charges of less than $373,000 to identify clinical trial claims and expanded access use claims when calculating the average cost for MS-DRG 18 (Chimeric Antigen Receptor (CAR) T-Cell and other immunotherapies). Instead, CMS proposes to no longer use the proxy of standardized drug charges of less than $373,000 to identify clinical trial claims and expanded access use cases when calculating the average cost for MS-DRG 018. The agency proposes to modify the calculation of the adjustment to account for the CAR T-cell therapy cases identified as clinical trial cases in calculating the national average standardized cost per case that is used to calculate the relative weights for all MS-DRGs.</p> <h3>Complication/Comorbidity (CC) and Major Complication/Comorbidity (MCC) Analysis</h3> <p>CMS continues to solicit feedback regarding the nine guiding principles that, when applied, could assist in determining whether the presence of the specified secondary diagnosis would lead to increased hospital resource use in most instances. Additionally, CMS continues to encourage feedback related to other possible ways to incorporate meaningful indicators of clinical severity. That said, other than proposed severity level changes related to three Social Determinants of Health ICD-10-CM homelessness codes and the addition of four unspecified diagnosis codes that were inadvertently omitted from the edit implemented April 1, 2022, CMS is not proposing additional changes for FY 2024 as the comprehensive CC/MCC analysis work continues.</p> <h3>Application of the non-CC Subgroup Criteria and Detailed Data Analysis</h3> <p>In the FY 2021 rule, CMS finalized a proposal to expand existing criteria to create a new CC or MCC subgroup within a base MS-DRG which included the expansion of the criteria to encompass the non-CC subgroup for a three-way severity level split. Consistent with FY 2022 and 2023 proposals, CMS proposes to continue to delay application of the non-CC subgroup criteria to existing MS-DRGs with a three-way severity level split for FY 2024. CMS continues to have interest in comments for consideration in the FY 2025 proposed rule.</p> <h3>Physician Self-referral Law: Physician-owned Hospitals</h3> <p>In the proposed rule, CMS reiterates that it has the discretion to approve or deny requests for expansion exceptions for physician-owned hospitals. The proposed rule clarifies that CMS will only consider expansion exception requests from eligible hospitals, specifies the data and information that must be included in requests, and also identifies the process/factors for requests.</p> <p>In addition, the proposed rule reinstates program integrity restrictions for physician-owned hospitals approved as “high Medicaid facilities” (which had been removed in the CY 2021 outpatient PPS final rule). The agency states that reinstatement of program integrity restrictions would ensure consistency between both applicable hospitals and high Medicaid facilities. Specifically, CMS proposes reinstatement of:</p> <ul> <li>Restrictions to expansion that would result in a hospital’s facility capacity exceeding 200% of its baseline facility capacity, including consideration of any prior expansion exception approvals when determining maximum facility capacity.</li> <li>Limitation of requests for expansion exceptions to once every two years.</li> <li>Restrictions on the location where expansion could occur to only the hospital’s main campus.</li> </ul> <h3>Hospital Quality Reporting and Value Programs</h3> <p>CMS proposes significant changes its hospital quality reporting and value programs.</p> <p><u>Hospital Value-based Purchasing (HVBP) Program</u>. Beginning with the FY 2026 program year, CMS proposes to adopt a health equity adjustment (HEA) that would add bonus points to a hospital’s VBP Total Performance Score. CMS believes the HEA would reward high quality performance for hospitals caring for underserved patient populations. The HEA would be based on a combination of a hospital’s quality performance and the extent to which it cares for underserved patients. The HEA would be the product of two factors — a “measure performance scaler” and “an underserved multiplier.” The measure performance scaler assigns hospitals points based on whether they score in the top, middle or bottom third of performance on each HVBP measure domain. The underserved multiplier is based on the proportion of a hospital’s inpatient stays that are for patients that are dually eligible for Medicare and Medicaid.</p> <p>CMS also proposes to:</p> <ul> <li>Add one new measure — severe sepsis and septic shock management bundle — beginning with the FY 2026 HVBP program;</li> <li>Modify the Medicare Spending per Beneficiary (MSPB) measure by allowing readmissions to trigger new episodes starting with the FY 2028 program year;</li> <li>Include new conditions in the total knee arthroplasty/total hip arthroplasty (THA/TKA) complication measure beginning with the FY 2030 program year; and</li> <li>Make several changes to administration process for Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey starting with the CY 2025 reporting/FY 2027 payment year. This includes permitting the use of web-based surveys, allowing a patient’s proxy to respond to surveys and requiring hospitals to collect information about the language the patient speaks while in the hospital.</li> </ul> <p><u>Inpatient Quality Reporting (IQR)</u>. CMS proposes to add three new electronic clinical quality measures (eCQMs) measures to the IQR program beginning with the CY 2025 reporting/FY 2027 payment year. The three measures below would be added to the menu of available eCQMs from which hospitals may self-select to fulfill eCQM reporting requirements for both the IQR and the Hospital Promoting Interoperability program:</p> <ul> <li>Hospital harm — pressure injury eCQM</li> <li>Hospital harm — acute kidney injury eCQM</li> <li>Excessive radiation dose or inadequate image quality for diagnosis computed tomography (CT) in adults eCQM</li> </ul> <p>Beginning with Q4 2023 reporting, CMS also proposes to update its Healthcare Personnel (HCP) COVID-19 vaccination measure to require hospitals to report on the cumulative number of HCP that meet the Centers for Disease Control and Prevention’s definition of “<a href="https://www.cdc.gov/nhsn/pdfs/hps/covidvax/UpToDateGuidance-508.pdf" target="_blank">up to date</a>” on their COVID-19 vaccinations. CMS also proposes to include Medicare Advantage patients in calculating performance on its hybrid hospital-wide all-cause mortality and readmission measures. CMS also proposes the same modifications to the HCAHPS survey administration process that it proposes for the HVBP.</p> <p>Lastly, CMS proposes to remove three measures from the IQR:</p> <ul> <li>THA/TKA complications, since the updated version of the measure is proposed for the HVBP program;</li> <li>MSPB, because the updated version of the measure has been proposed for the HVBP program; and;</li> <li>Elective delivery prior to 39 weeks gestation (PC-01), because measure performance is topped out.</li> </ul> <h3>Request for Information: Safety-Net Hospitals</h3> <p>As a result of Executive Order 13985 on “Advancing Racial Equity and Support for Underserved Communities through the Federal Government,” the proposed rule includes a request for information (RFI) on how CMS can support safety-net providers. The agency discusses two approaches in defining and supporting safety-net providers, including those proposed by the Medicare Payment Advisory Commission’s safety-net index and the use of other types of area-level indices such as the Area Deprivation Index. For example, the RFI seeks comments on how safety-net hospitals should be defined, what are the challenges they face, and what new approaches or modifications to existing approaches could be implemented to address those challenges.</p> <h2>FURTHER QUESTIONS</h2> <p>CMS will accept comments on the inpatient PPS proposed rule through June 9. The final rule will be published around Aug. 1, and the policies and payment rates will take effect Oct. 1. Watch for a more detailed analysis of the proposed rule in the coming weeks.</p> <p>If you have further questions, contact Shannon Wu, AHA’s senior associate director of policy, at 202-626-2963 or <a href="mailto:mailto:swu@aha.org">swu@aha.org</a>.</p> </div> </div> </div> Tue, 11 Apr 2023 18:19:08 -0500 Medicare Area Wage Index (AWI) /news/headline/2023-04-04-aha-urges-medpac-reject-recent-site-neutral-and-wage-index-proposals <p>Commenting April 4 on topics discussed by the Medicare Payment Advisory Commission in March, AHA said it continues to strongly oppose additional site-neutral payment cuts to hospital outpatient departments, which need stable and adequate government reimbursements to ensure access to care in this highly challenging financial environment. AHA also urged the commission to maintain the average-sales-price-plus-6% payment methodology for Medicare Part B drugs; and raised concerns about a proposed alternative to Medicare’s wage index system.</p> <p>“For many hospitals and health systems, continued financial viability is becoming increasingly difficult as they manage the aftermath of the most significant public health crisis in a century, as well as the incredible challenges of deepening workforce shortages, broken supply chains and historic levels of inflation that have increased the costs of caring for patients,” AHA <a href="/lettercomment/2023-04-04-aha-comments-march-2023-medpac-meeting-topics-wage-index-ambulatory-payments-and-part-d-drugs">wrote</a>. “Now more than ever, hospitals need stable and adequate government reimbursements in order to ensure access to care in this highly challenging environment.”</p> Tue, 04 Apr 2023 14:32:00 -0500 Medicare Area Wage Index (AWI) /news/headline/2022-09-27-aha-comments-medpac-wage-index-drug-medicare-advantage-discussions <p>AHA today submitted comments to the Medicare Payment Advisory Commission as the panel considers potential changes to the Medicare hospital wage index, Part B drug payment policies and the Medicare Advantage program. In the <a href="https://aha.org/lettercomment/2022-09-26-aha-comments-medpac-re-topics-be-discussed-commissioners-september-meeting">letter</a>, AHA agrees with the commission that the current wage index is flawed, but said it continues to have concerns about using non-hospital data to calculate the wage index; presents recommendations to address the skyrocketing cost of drugs; and strongly supports the commission’s work to monitor the accuracy and completeness of MA encounter data.</p> Tue, 27 Sep 2022 15:10:57 -0500 Medicare Area Wage Index (AWI) /lettercomment/2022-09-26-aha-comments-medpac-re-topics-be-discussed-commissioners-september-meeting <p>September 26, 2022</p> <p>Michael Chernew, Ph.D.<br /> Chairman<br /> Medicare Payment Advisory Commission<br /> 425 I Street, N.W., Suite 701<br /> Washington, D.C. 20001</p> <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 Medicare Payment Advisory Commission’s (MedPAC) continued discussions on the Medicare hospital wage index, the prices of pharmaceutical products and the Medicare Advantage (MA) program. As the Commission continues its deliberations, we would like to share our thoughts, suggestions and concerns related to these issues.</p> <p>Regarding the discussions during the September meeting on the hospital wage index, high drug costs and MA, the AHA:</p> <ul> <li>agrees that the current wage index system is flawed, but continues to have concerns about using non-hospital data to calculate the wage index;</li> <li>presents recommendations to address the skyrocketing cost of drugs, such as a cap on ASP inflation; and</li> <li>strongly supports the Commission’s work to monitor the accuracy and completeness of data on MA encounters.</li> </ul> <p>Our detailed comments on these issues follow.</p> Mon, 26 Sep 2022 15:08:27 -0500 Medicare Area Wage Index (AWI) <p>The Centers for Medicare & Medicaid Services (CMS) August 1 issued its hospital inpatient prospective payment system (PPS) and long-term care hospital (LTCH) PPS <a href="https://www.federalregister.gov/public-inspection/2022-16472/medicare-program-hospital-inpatient-prospective-payment-systems-for-acute-care-hospitals-and-the" target="_blank">final rule</a> for fiscal year (FY) 2023. The rule affects inpatient PPS hospitals, critical access hospitals (CAHs), LTCHs and PPS-exempt cancer hospitals. This advisory summarizes the final policies related to inpatient PPS hospitals, CAHs and PPS-exempt cancer hospitals. The LTCH provisions will be discussed in a forthcoming separate advisory. Provisions of the final rule generally take effect Oct. 1.</p> <p>The final rule will increase inpatient PPS payments by an estimated 1.7% in FY 2023 as compared to FY 2022. The increase reflects a 4.3% rate update (a 4.1% market basket update, less 0.3 percentage points for productivity, plus 0.5 percentage points required by statute) and adjusted for Medicare disproportionate share hospital (DSH), outlier payments, expiration of rural add-on payments, and other changes resulting in a net update of 1.7% (compared to a negative 0.3% update as proposed).</p> <div class="panel module-typeC"> <div class="panel-body"> <h3>Key Highlights</h3> <p>CMS’ final policies will:</p> <ul> <li>Utilize an updated market basket of 4.1% in FY 2023, which is 1.0 percentage points higher than proposed.</li> <li>Offset rates by 1.7 percentage points for outlier payments, compared to 1.8 percentage points in the proposed rule.</li> <li>Distribute $10.4 billion in DSH payments, which is $500 million more than proposed.</li> <li>Use FY 2018 and 2019 Worksheet S-10 data to determine the distribution of FY 2023 disproportionate share hospital (DSH) uncompensated care payments. CMS also adopted the use of a three-year average of S-10 data for FY 2024 and beyond.</li> <li>Permanently apply a 5% cap on any decrease in a hospital’s area wage index.</li> <li>Implement a modified policy to the calculation of full-time equivalent (FTE) caps in graduate medical education (GME) programs.</li> <li>Apply COVID-19 measure suppressions to the Hospital Acquired-Condition (HAC) Reduction and Hospital Value-based Purchasing (HVBP) programs, resulting in neutral payment adjustments for FY 2023.</li> <li>Add 10 new measures to the inpatient quality reporting (IQR) program, including 3 new health equity measures and 2 maternal health measures.</li> <li>Adopt a new “birthing friendly” designation on CMS’s Care Compare website.</li> <li>Finalize a modified extension of the hospital COVID-19 data reporting requirements beyond the end of the COVID-19 Public Health Emergency (PHE), but withdraws its proposal to establish hospital data reporting requirements for future PHEs.</li> </ul> </div> </div> <h2>AHA TAKE</h2> <p>We are pleased that CMS will provide increased inpatient payments next year, rather than a cut as proposed, allowing hospitals and health systems to better provide care for their patients and communities. That said, this update still falls short of what hospitals and health systems need to continue to overcome the many challenges that threaten their ability to care for patients and provide essential services for their communities. This includes the extraordinary inflationary expenses in the cost of caring, particularly related to supporting the workforce while experiencing severe staff shortages. <strong>See AHA’s full media <a href="/press-releases/2022-04-18-aha-statement-fy-2023-proposed-ipps-rule" target="_blank">statement</a></strong>.</p> <h2>WHAT YOU CAN DO</h2> <ul> <li><strong>Share this advisory with your senior management team</strong> and ask your chief financial officer to examine the impact of the payment changes on your Medicare revenue for FY 2023. The AHA is in the process of updating its DSH and readmissions <a href="/inpatient-pps" target="_blank">calculator</a> for member hospitals to assess the impact of the policy on their organizations and will notify members when it is available. Please note that based on CMS provisions related to the HAC and VBP programs, the HAC and VBP calculators are not applicable for FY 2023 and will not be updated.</li> <li><strong>Verify that you have attested to meaningful use</strong>. Attestation status can be determined through CMS’<a href="http://www.cms.gov/Regulations-and-Guidance/Legislation/EHRIncentivePrograms/RegistrationandAttestation.html" target="_blank"> website</a>.</li> <li><strong>Share this advisory with your billing, medical records, quality improvement and compliance departments, as well as your clinical leadership team</strong> — including the quality improvement committee and infection control officer — to apprise them of the policies around the diagnosis-related groups and quality measurement requirements.</li> </ul> <h2>FURTHER QUESTIONS</h2> <p>Please contact Shannon Wu, AHA senior associate director of policy, at 202-626-2963 or <a href="mailto:mailto:swu@aha.org">swu@aha.org</a> if you have further questions.</p> Wed, 24 Aug 2022 10:12:40 -0500 Medicare Area Wage Index (AWI) /lettercomment/2022-06-17-comments-cms-its-fy-2023-proposed-long-term-care-hospital-prospective <p>On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, including approximately 300 long-term care hospitals (LTCH), and our clinician partners — 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 comment on the fiscal year (FY) 2023 LTCH prospective payment system (PPS) proposed rule. We are submitting separate comments on the rule’s inpatient PPS proposals.</p> <p>We are concerned that CMS is proposing policies and payment adjustment that do not take into account the current the COVID-19 public health emergency (PHE) and its atypical market forces and pandemic-driven aberrations affecting the utilization and cost of providing LTCH services. Specifically, we are concerned by proposals for an inadequate market basket update and an untenable spike in the high-cost outlier threshold.</p> <p>Please read the entire letter. See the pdf below.</p> Fri, 17 Jun 2022 10:57:52 -0500 Medicare Area Wage Index (AWI) /2022-04-05-cms-releases-fy-2023-inpatient-rehabilitation-facility-pps-proposed-rule <div class="container"> <div class="row"> <div class="col-md-8"> <p>The Centers for Medicare & Medicaid Services (CMS) March 31 issued the <a href="https://s3.amazonaws.com/public-inspection.federalregister.gov/2020-08359.pdf" target="_blank">proposed rule</a> for the inpatient rehabilitation facility (IRF) prospective payment system (PPS) for fiscal year (FY) 2023. This brief rule updates IRF PPS payments relative to the current fiscal year, as required, along with proposing several structural updates to the design of the payment system. The agency makes a modest change to the IRF quality reporting program, as well as issues several requests for information.</p> <h2>AHA TAKE</h2> <p>We appreciate CMS’ streamlined approach to the rule, which allows providers to focus on responding to the COVID-19 emergency. However, the rule falls short of addressing the full impact of the pandemic on IRFs and the health care delivery system as a whole.</p> <p> </p> <div class="panel module-typeC"> <div class="panel-body"> <h3>  Key Highlights</h3> <p>  The proposed rule would:</p> <ul> <li>Increase IRF payments by 2.0% ($170 million) in FY 2023.</li> <li>Cap annual decreases in wage index updates.</li> <li>Update current policy affecting displaced medical residents.</li> </ul> <p>  In addition, the agency requests information from the field related to:</p> <ul> <li>Modifying existing facility payment adjustments for teaching, low-income and rural IRFs;</li> <li>Expanding the current IRF transfer policy to include discharges to home health;</li> <li>Updating the C. difficile infection outcome measure in the IRF quality reporting program; and</li> <li>Strategies to improve measurement of disparities in health care outcomes.</li> </ul> </div> </div> <p><br /> Highlights from the rule follow.</p> <h2>IRF PPS PAYMENT CHANGES</h2> <h3>Proposed FY 2023 Payment Update</h3> <p>The rule would increase net payments to IRFs by 2.0% ($170 million) in FY 2023 relative to FY 2022. This includes a 3.2% market-basket update offset by a statutorily-mandated cut of 0.4-percentage-point for productivity, and a 0.8-percentage-point cut for high-cost outlier payments. The latter would reduce the number of cases that qualify for an outlier payment with the goal of limiting total FY 2023 outlier payments at 3.0% of all IRF PPS payments that year, per current policy.</p> <h3>Proposed Permanent Cap on Wage Index Decreases</h3> <p>CMS proposes to adopt a permanent policy that would cap wage index decreases from year-to-year at 5%. CMS anticipates that this cap would rarely be used, but, when needed, would improve the stability of this payment system.</p> <h2>PROPOSED CHANGES RELATED TO THE FACILITY-LEVEL ADJUSTMENT FOR “TEACHING IRFS”</h2> <h3>Proposed Changes Regarding Displaced Medical Residents</h3> <p>CMS proposes to update and clarify its current policy addressing medical residents (and interns) who are displaced when a teaching IRF closes. The rule would alter the status of a relocating resident based on the date that the originating IRF publicly announces its closure (for example, via a press release), rather than the actual closure date, which would mitigate delayed transfers of a displaced resident to a new IRF. In addition, the rule would allow the receiving IRF to increase its FTE resident cap by submitting a letter to its Medicare Administrative Contractor (MAC) within 60 days after beginning to train the displaced residents.</p> <h3>Proposed Codification of IRF Teaching Status Adjustment</h3> <p>To improve clarity, CMS is proposing to codify and consolidate existing policies related to reimbursement for IRFs providing graduate medical education.</p> <h2>PAYMENT-RELATED REQUESTS FOR INFORMATION (RFI)</h2> <h3>IRF PPS Facility Level Adjustments</h3> <p>Currently, the IRF PPS adjusts payments based on an IRF’s percentage of low-income patients, teaching status, and rural status, to account for differences in costs attributable to these characteristics. Updates to these annual adjustments factors are made in a budget-neutral manner. To mitigate the impact of relatively large fluctuations in these factors from year-to-year, the adjustment levels have been frozen since FY 2014, with general support from the field. While CMS is not proposing a change for FY 2023, Table 9 in the rule shows what the annual facility adjustments would have been for FY 2015 through FY 2023, and demonstrates substantial volatility. This rule seeks comments from stakeholders to help better understand the cause of these fluctuations and consider how to best account for them in the future.</p> <h3>IRF Transfer Policy</h3> <p>CMS is also seeking feedback from the field on whether to incorporate a “discharge to home health” element in the IRF transfer policy in the future, in alignment with inpatient and inpatient psychiatric facility PPS policies. This policy, which is intended to disincentivize early discharges from IRFs, currently applies to stays with a less than average length-of-stay for cases with comparable principal and secondary diagnoses, which are transferred directly to another IRF, general acute-care hospital, or nursing home/SNF. This possible, future recommendation reflects a December 2021 report by the Department of Health and Human Services Office of the Inspector General report<sup>1</sup>, based on an audit of calendar year 2017 and 2018 Medicare claims, which found that this form of transfer policy expansion would generate savings of approximately $1 billion over two years.</p> <h2>IRF QUALITY REPORTING PROGRAM (QRP)</h2> <p>CMS proposes to require IRFs to report quality data, including the standardized patient assessment data in the IRF Patient Assessment Instrument (PAI), on all patients regardless of payer. If finalized, IRFs would be required to collect the IRF PAI for all patients beginning Oct. 1, 2023. The agency estimates that the increased burden will result in an additional average cost of $28,505.41 per IRF annually, at a total cost of over $31 million for the field per year.</p> <p>CMS does not propose any other changes to the QRP, including any new quality measures.</p> <h2>QUALITY REPORTING-RELATED RFIS</h2> <p>CMS seeks stakeholder feedback on a number of topics, which the agency reports will influence the direction of the QRP in the future.</p> <h3>C. <em>difficile</em> Infection Outcome Measure</h3> <p>CMS requests input on the potential inclusion of an updated healthcare-associated infection measure in the IRF QRP. The measure, National Healthcare Safety Network (NHSN) Healthcare-associated Clostridioides difficile Infection (HA-CDI) Outcome Measure, improves upon the CDI measure currently used in the IRF QRP by using data from electronic health records. CMS purports that this method both increases the accuracy of the measure and reduces reporting burden, as it would negate manual entry of information into the NHSN reporting platform. In the RFI, CMS would like to assess the feasibility of this “digital” measure in IRFs.</p> <h3>Measuring Equity and Quality Disparities</h3> <p>Separately, CMS seeks feedback on its strategies to improve measurement of disparities in health care outcomes. In this RFI, the agency requests input on its framework to collect, stratify and report quality performance data across CMS programs as well as specific methods the agency could deploy within the IRF QRP specifically. The latter might include quality measures assessing a facility’s commitment to addressing health equity by taking on certain practices.</p> <h2>FURTHER QUESTIONS</h2> <p>CMS will accept comments on the IRF proposed rule through May 31. AHA’s IRF members will receive an invitation for a call to discuss the rule and inform AHA’s comments. Please contact Rochelle Archuleta, AHA director of policy, at <a href="mailto:rarchuleta@aha.org">rarchuleta@aha.org</a> with any questions.</p> <p>__________<br /> <small><sup>1</sup> Office of the Inspector General. December 7, 2021 Early Discharges From Inpatient Rehabilitation Facilities to Home Health Services [Report No. A-01-20-00501] <a href="https://oig.hhs.gov/" target="_blank">https://oig.hhs.gov</a></small></p> </div> <div class="col-md-4"> <p class="text-align-center"><strong><a class="btn btn-primary btn-wide" href="/system/files/media/file/2022/04/cms-releases-fy-2023-inpatient-rehabilitation-facility-pps-proposed-rule-bulletin-4-5-22.pdf">Download the PDF</a></strong></p> <p><a href="/system/files/media/file/2022/04/cms-releases-fy-2023-inpatient-rehabilitation-facility-pps-proposed-rule-bulletin-4-5-22.pdf" target="_blank"><img src="/sites/default/files/2022-04/image-%20cms-releases-fy-2023-inpatient-rehabilitation-facility-pps-proposed-rule-bulletin-4-5-22.png " /></a></p> </div> </div> </div> Tue, 05 Apr 2022 09:29:15 -0500 Medicare Area Wage Index (AWI) /news/headline/2020-09-08-cms-releases-preliminary-occupational-mix-public-use-file <p><span><span><span><span>The Centers for Medicare & Medicaid Services today released the preliminary calendar 2019 unaudited <a href="https://www.cms.gov/medicaremedicare-fee-service-paymentacuteinpatientppswage-index-files/fy-2022-wage-index-home-page">occupational mix survey data</a>, which will be used in area wage index calculations beginning in fiscal year 2022. </span></span></span></span></p> <p><span><span><span><span>The deadline for hospitals to request revisions to their data as included in the file is Sept 10. </span></span></span></span></p> <p><span><span><span><span>Medicare Administrative Contractors must receive revision requests and documentation supporting the request by this date.</span></span></span></span></p> Tue, 08 Sep 2020 14:39:17 -0500 Medicare Area Wage Index (AWI) /news/headline/2020-08-21-cms-extends-deadline-apply-area-wage-index-reclassification <p><span><span><span><span><span>Due to the COVID-19 public health emergency, the Centers for Medicare & Medicaid Services today extended the Sept. 1 deadline for hospitals to apply for reclassification of their Medicare area wage index for fiscal year 2022 until 15 days after the agency releases its inpatient prospective payment system final rule for FY 2021. </span></span></span></span></span></p> <p><span><span><span><span><span>The agency recently released <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Wage-Index-Files-Items/Three-Year-MGCRB-Reclassification-Data">wage data</a> to help hospitals assess whether to seek reclassification of their Medicare area wage index for fiscal year 2022.</span></span></span></span></span></p> <p><span><span><span><span><span>AHA has <a href="/lettercomment/2020-07-10-aha-comments-cms-fy-2021-inpatient-pps-proposed-rule">urged</a> CMS to give hospitals ample time to examine wage data and submit a timely application, if desired.</span></span></span></span></span></p> Fri, 21 Aug 2020 14:07:01 -0500 Medicare Area Wage Index (AWI)