backCMS Issues IPPS and LTCH Final Rule for FY 2025
On August 1, 2024, CMS filed a display copy of its final rule for Fiscal Year (FY) 2025 pertaining to the Inpatient Prospective Payment Systems (IPPS) for general acute care hospitals and long-term care hospitals (LTCHs) (the Final Rule). The Final Rule, scheduled for publication on August 28, 2024, generally finalized changes that CMS proposed in the FY 2025 Proposed Rule, but CMS made some revisions. CMS revised the payment rates for general acute care hospitals and LTCHs, finalized its IPPS adjustment for providers of essential medicines, implemented changes for graduate medical education (GME) programs, implemented the latest core based statistical areas (CBSAs), and modified the composition of the Provider Reimbursement Review Board (PRRB).
Payment Rates Overview
In the FY 2025 proposed rule, CMS initially projected that the payment rates for general acute care hospitals under the IPPS, for those hospitals that participate in the Hospital Inpatient Quality Reporting program and are meaningful users of electronic health records, would increase by 3% in FY 2025. During the notice and comment rulemaking, many providers indicated that they believe a 3% increase to their payment rates in FY 2025 would be inadequate, and that inflation and rising labor costs would continue to outpace CMS’s increases to Medicare reimbursement rates.
CMS noted commenters’ concerns but indicated that the agency has little interest in modifying its method for updating the IPPS rates. However, even without CMS modifying the underlying methodology of its IPPS payment rate calculation, the “hospital market basket update” went from increasing by 3% under the Proposed Rule to increasing by 3.4% under the Final Rule, due to CMS incorporating new data into its calculation.
Despite these changes to the Medicare reimbursement rate, CMS’s estimate for the total operating and capital payments going to general acute care hospitals remained largely unchanged from the proposed rule to the Final Rule; both versions estimated that hospitals’ payments under the IPPS would increase by $2.9 billion.
In addition to general acute care hospitals seeing a boost to their payment rates in the Final Rule, as compared to the proposed rule, CMS also indicated that the standard payment rate for LTCHs would be higher under the Final Rule than the proposed rule. The increase in the LTCH standard payment rate went from a 1.2% increase for FY 2025 under the Proposed Rule, adding approximately $26 million over the prior year, to a 2% increase for FY 2025 under the Final Rule, adding approximately $45 million over the prior year.
Establishing and Maintaining Access to Essential Medicines
CMS finalized its proposal to establish, beginning in FY 2025, a separate IPPS payment adjustment for the additional resource costs that small, independent hospitals incur in voluntarily establishing and maintaining access to a six-month buffer stock of one more of eighty-six “essential medicines” either directly or through contractual arrangements with a pharmaceutical manufacturer, distributor, or intermediary. For hospitals with contractual arrangements, the hospital must clearly identify those costs separately from the costs of other provisions of the contract with that entity.
Eligibility for the separate IPPS payment is limited to hospitals with 100 beds or fewer that are not part of a chain organization. For purposes of this policy, a “chain organization” is a group of two or more health care facilities owned, leased, or, through any other device, controlled by one organization. Any hospital that answers “yes” (denoted “Y”) to line 140 column 1 or fills out any part of lines 141 through line 143 on Worksheet S-2, Part I, on its Medicare cost report would be considered to be part of a chain organization and not independent, and therefore not eligible for separate payment under this proposal.
The “essential medicines” are defined from a list of 86 pharmaceuticals in the Essential Medicines Supply Chain and Manufacturing Resilience Assessment report. This report was developed by the HHS Office of the Assistant Secretary for Preparedness and Response and published in May 2022. However, any subsequent revisions to the list are also included as essential medicines. Separate payment will not apply to buffer stocks of any of the essential medicines on the Advanced Regenerative Manufacturing Institute’s (ARMI’s) list that are currently listed as “Currently in Shortage” on the FDA Drug Shortages Database unless a hospital had already established a 6-month buffer stock of that medicine prior to the shortage.
The new, separate, IPPS payment is non-budget neutral with payment adjustments commencing for cost reporting periods beginning on or after October 1, 2024. The separate payment will cover the IPPS share of the additional costs to maintain the buffer stock and could be issued in a lump sum, or as biweekly payments to be reconciled at cost report settlement. CMS estimates that approximately 500 hospitals will qualify under this policy.
Graduate Medical Education
In the Final Rule, CMS finalized rules implementing section 4122(a) of the Consolidated Appropriations Act, 2023 (CAA ’23), which requires CMS to distribute additional residency positions to hospitals. The rules for CAA ’23 are similar to the rules CMS adopted for the Consolidated Appropriations Act, 2021 (CAA ’21), which authorized CMS to distribute 1,000 FTE cap slots over 5 years. But the CAA ’23 rules differ in three important respects. First, instead of 1,000 FTE cap slots over five years, CAA ’23 authorizes a distribution of 200 FTE cap slots in FY 2026 only. Second, at least 100 of those FTE cap slots are reserved for programs in psychiatry and its subspecialities. Third, every hospital that qualifies for a distribution must receive at least one FTE, or a fraction of one if there are more than 200 eligible applicants. If any slots remain after that initial allocation, the distribution of the remainder will be prioritized by Health Professional Service Area scores. No qualifying hospital can receive more than ten FTE cap slots. Applications are due March 31, 2025. Rewards will be announced by January 31, 2026, and the awarded slots will be available beginning July 1, 2026.
In the proposed rule, CMS issued a request for information (RFI) to solicit comments about how the agency should identify “new” programs. The RFI included a proposal to modify the definition of “new” program to specify that at least 90 percent of the individual residents must not have previous training in the same specialty as the new program. In the Final Rule, CMS declined to finalize its proposal because “we received many wide-raining comments and comments did not arrive at a consensus on the best approach to this issue.” Commenters said the proposal would be administratively burdensome and impede the development of new programs, and that it would overlook the roles that the ACGME, ABMS, and the National Resident Matching Program have in the process of establishing new programs. Other commenters suggested alternative definitions of “newness.” CMS has initiated a second RFI “in an effort to achieve greater consensus on this issue.”
Medicare Wage Index
In the Final Rule, CMS finalized its proposal to adopt the latest CBSA delineation published by the Office of Management and Budget (OMB). As a result of this transition, CMS reports that fifty-three urban counties and thirty-three urban hospitals will become rural, and fifty-four rural counties and twenty-four rural hospitals will become urban. Seventy-three urban counties will split off from one CBSA to join another. The update also reflects Connecticut’s change from eight counties to nine planning regions. Hospitals that are adversely affected by these changes in FY 2025 will receive at least 95 percent of their wage index values from the previous year. CMS has not proposed any additional measures to mitigate the transition.
CMS also finalized its decision to continue the low wage index hospital policy, first adopted in FY 2020, into FY 2025. Under this policy, CMS will make upward adjustments to the wage indices of hospitals with a wage index value below the 25th percentile. The adjustment for each eligible hospital will be equal to half of the difference between the otherwise applicable final wage index value for the hospital and the 25th percentile wage index value for all hospitals that same year. The 25th percentile wage index for FY 2025 will be 0.9007. CMS acknowledged that the D.C. Circuit recently struck down this policy in Bridgeport Hospital v. Becerra. The agency reported that it is evaluating the decision and considering next steps.
Social Determinants of Health Diagnosis Codes
In the Final Rule, CMS finalized its proposal to redesignate the ICD-10-CM diagnosis codes for patients with inadequate or unstable housing from non-complication or comorbidity (NonCC) to complication or comorbidity (CC). This means that hospitals will be eligible to receive more reimbursement for treating patients with inadequate housing or housing instability. The affected codes include Z59.10 (inadequate housing, unspecified), Z59.11 (inadequate housing, environmental temperature), Z59.12 (inadequate housing, utilities), Z59.19 (other inadequate housing), Z59.811 (housing instability, housed, with risk of homelessness), Z59.812 (housing instability, housed, homelessness in past 12 months), and Z59.819 (housing instability, housed unspecified). CMS determined based on the claims data that the resources involved in carrying for patients with these codes warrants increasing the severity level from a NonCC to a CC.
Provider Reimbursement Review Board
CMS finalized its proposal to make several changes to the governing composition of the PRRB. According to CMS, it has been increasingly challenging to attract a large pool of qualified candidates who have relevant skills and experience in matters that come before the PRRB. CMS’s aim is to decrease the frequency of turnover and permit lengthier periods of service for Board Members, which it believes would have the potential to increase the PRRB’s efficiency and productivity.
CMS has stated that the nature of the PRRB’s cases has evolved over time, with an increase in broad-based legal challenges to regulatory interpretations and fewer appeals of reimbursable expenses specific to individual providers. With the evolution of Part A reimbursement to a prospective payment system, appeals to the PRRB frequently involve nuanced issues that implicate highly specialized and complex areas of law that often reach the federal courts, and on occasion, are decided by the U.S. Supreme Court. The longer length of service, according to CMS, would allow Board Members to obtain a deeper understanding of, and knowledge about, pertinent issues and caselaw.
CMS finalized changes to the PRRB regulation, 42 C.F.R. § 405.1845, to:
- Require that board members shall be knowledgeable “in the field of payment of providers under Medicare Part A” rather than “knowledgeable in the field of cost reimbursement;” and
- Permit a board member to serve no more than three consecutive 3-year terms, instead of two consecutive 3-year terms currently allowed under current regulation.
CMS proposed to permit a board member who is designated as chairperson in their second or third consecutive term to serve a fourth consecutive term to continue leading the board as chairperson. CMS, however, did not finalize this part of its proposal at this time.
These changes to the PRRB regulation become effective January 1, 2025.
Request for Information to Advance Patient Safety and Outcomes Across Hospital Quality Programs
In the proposed Rule, CMS sought feedback from providers regarding how to improve quality programs that focus on reducing unplanned patient visits for inpatient and outpatient care. Particularly, CMS sought out ways to improve programs focused on excess days in acute care (EDAC) for acute myocardial infraction patients, heart failure patients, and pneumonia patients.
Even though some commenters were generally satisfied with CMS’s chosen measures and goals, CMS noted that many commenters are concerned that quality goals pertaining to EDAC, and hospital readmissions, risk overemphasizing factors that are outside most hospitals’ control. Those commenters indicated they are afraid hospitals “that disproportionately serve populations with health-related social needs” will perform worse in these quality programs regardless of what the hospitals do. Additionally, these commenters expressed concern that focusing on readmissions may create adverse incentives that hurt patient health outcomes, such as causing physicians to “choose” healthier patients over sick patients, or to delay transferring patients to emergency departments.
Commenters also expressed concern that comparable quality programs, such as the Hospital Readmissions Reduction Program, err by examining patients over too-long of a time horizon. The Hospital Readmissions Reduction Program evaluates hospitals based on whether patients are readmitted within 30-days after discharge, but some commenters believe that any number of extraneous factors outside of hospitals’ control can lead to readmissions over that long of a window. In contrast, some commenters suggested evaluating providers based on whether a patient is readmitted after seven days, because they believe a shorter window does a better job at evaluating whether patients are receiving sufficient discharge care.
Even though CMS did not indicate it would modify the FY 2025 Final Rule, based on the commenters’ arguments, CMS did indicate that the agency would take these providers’ comments under advisement for future rulemakings.
Maternity Care Request for Information
In the proposed rule, CMS also asked providers to answer a series of questions regarding the differences between hospital resources required for providing inpatient obstetrical services to Medicare patients as compared to non-Medicare patients.
In commenters’ answers, many of them stressed the importance of disproportionate share hospital payments and uncompensated care programs for financing their maternity care programs. Other commenters discussed their hope that CMS would do more to work with state Medicaid agencies due to Medicaid’s role in the delivery of maternal care services. CMS did not modify any details in the Final Rule based on providers’ comments, but CMS did pledge to consider providers’ advice for future maternal health programs.
The Final Rule is available here, and a CMS fact sheet is available here. The Final Rule is scheduled to be published in the Federal Register on August 28, 2024.
Reporters, Alek Pivec, Washington D.C., +1 202 626 2914, apivec@kslaw.com, Michael L. LaBattaglia, Washington, D.C., +1 202 626 5579, mlabattaglia@kslaw.com, and Gregory Fantin, Washington D.C., +1 202 626 9271, gfantin@kslaw.com.
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CMS Issues Fiscal Year 2025 Final Rule for Skilled Nursing Facilities
On July 31, 2024, CMS issued a final rule (the Final Rule) for fiscal year (FY) 2025 updating Medicare payment policies and rates for skilled nursing facilities (SNFs) under the SNF Prospective Payment System (PPS). Under the Final Rule, CMS presented several updates, revisions, and changes to Medicare payment policies. Key changes are highlighted below.
SNF Payment Rates
In the Final Rule, CMS is increasing the SNF PPS rate by 4.2% based on the SNF market basket increase of 3.0% plus a 1.7% market basket forecast error adjustment, and a negative 0.5% productivity adjustment. This increase is 0.1% higher than the proposed increase in the proposed rule. SNF Value-Based Purchasing Program reductions, estimated to total $196.5 million in FY 2025, are not included in these figures. CMS is updating the SNF market basket base year from the current base year 2018 to a new base year of 2022. The SNF wage index is updated using the new Office of Management and Budget (OMB) Bulletin 23-01 Core-Based Statistical Areas (CBSAs) to improve wage accuracy.
Patient-Driven Payment Model (PDPM) ICD-10 Code Mappings
CMS is continuing to work to finalize the PDPM ICD-10 Code Mapping. These new code mappings are intended to improve the accuracy and consistency of skilled intervention primary diagnosis made during a Part A stay.
Nursing Home Enforcement
The Final Rule permits CMS to impose multiple per instance CMPs for the same type of noncompliance and both per instance and per day CMPs for the same deficiency during the same survey. The Final Rule also decouples the amount of the CMP from the date that the survey started or the beginning date of noncompliance, meaning that CMS now has the flexibility to impose a per instance CMP to address the facility’s noncompliance prior to the survey and a per day CMP starting on the survey start date. Even though more CMPs can be imposed, the CMPs are still subject to statutory daily limits. In addition, CMS can continue to consider the SNF’s financial condition in determining the appropriate CMP.
SNF Quality Reporting Program (QRP)
CMS is continuing to finalize updates to the SNF QRP, including adding four Social Determinants of Health (SDOH) items and revising one SDOH item. The four new items: Living situation (1 item), Food (2 items) and Utilities (1 item) will be implemented starting with the FY 2027 QRP (residents admitted on October 1, 2025). CMS is also revising the Transportation item that will also be implemented starting with the FY 2027 QRP. CMS is also working on a SNF QRP validation process where approximately 1,500 SNFs will be randomly selected to share medical records for validation.
SNF Value-Based Purchasing (VBP) Program
CMS is adopting two policies related to the VBP program: (1) a measure selection, retention, and removal policy similar to policies CMS has adopted for other quality programs; and (2) a technical measure update policy to finalize VBP measure specifications. CMS is also finalizing an administrative policy to make sure SNFs are using the right data to calculate their measurements.
The Final Rule is scheduled to be published in the Federal Register on August 6, 2024. A display copy of the Final Rule is available here.
Reporter, Taylor Whitten, Sacramento, +1 916 321 4815, twhitten@kslaw.com.
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CMS Issues Final Rule Updating Hospice Payment Rates for Fiscal Year 2025 — On July 30, 2024, CMS issued (CMS-1810-F), its final rule updating the Medicare hospice payment rates and aggregate cap amount for fiscal year (FY) 2025 (the Final Rule). Highlights of the Final Rule are below.
Hospice Payment Policy Updates
The Final Rule adopts the Office of Management and Budget’s (OMB) statistical area delineations that revise the core-based statistical areas, impact the hospice wage index, and clarify various hospice policies, including those concerning election statements and notices, admissions, and terminal illness certifications. In FY 2025, a permanent cap will still prevent a geographic area’s wage index from falling below 95% of its wage index from the prior fiscal year.
2025 Rate Setting Updates
As a result of the 3.4% inpatient hospital market basket percentage increase, reduced by a 0.5% productivity adjustment, the fiscal year 2025 hospice update percentage is 2.9%. This update is estimated to increase aggregate Medicare hospice payments by roughly $790 million from fiscal year 2024. The updated percentage reduction for failing to meet hospice quality reporting requirements is -1.1%.
The Final Rule also includes a statutory aggregate cap limiting the total annual Medicare hospice payments per patient to $34,465.34, which is 2.9% higher than the 2024 annual cap.
Hospice Quality Reporting Program Updates
The Final Rule adopts two new process measures for the Hospice Quality Reporting Program that are expected to begin in fiscal year 2028: (1) Timely Follow-up for Pain Impact; and (2) Timely Follow-Up for Non-Pain Symptom Impact, which will document whether a follow-up visit occurred within forty-eight hours of an initial assessment where there was an impact of moderate or severe symptoms with and without pain.
These new process measures will be reported through HOPE, which is a new patient-level data collection tool that was adopted by the Final Rule. Beginning in fiscal year 2025, HOPE—which collects data at multiple time points across the hospice stay—will functionally replace the existing Hospice Item Set (HIS) structure, which only collects data at hospice admission and discharge. Compared to HIS, HOPE includes several domains that are new or expanded, including: Sociodemographic (updated); Diagnoses (expanded); Symptom Impact Assessment; Skin Conditions; and Imminent death.
The Final Rule also implements the following changes to the Hospice CAHPS Survey: (1) adds a web-mail mode that emails online survey invitations and follows up with non-responders; (2) shortens and simplifies the survey; (3) modifies survey administration protocols to include a pre-notification letter and extension of the field period from 42 to 49 days; (4) adds a new two-item Care Preferences measure; (5) revises the existing Hospice Team Communication measure and Getting Hospice Care Training measure; and (6) removes three nursing home items and additional survey items impacted by other proposed changes in the rule.
According to CMS, the Hospice Special Focus Program (SFP) will monitor hospices identified as poor performers based on selected quality indicators, as additional oversight will enable continuous improvement. The SFP algorithm will use data from the Help for Pain and Symptoms measure, Getting Timely Help measure, Willingness to Recommend this Hospice measure, and Overall Rating of this Hospice measure (collected by the CAHPS Hospice Survey). The Final Rule adopts non-substantive changes to the Overall Rating of this Hospice measure that will not impact the SFP algorithm.
Hospice Conditions of Participation and Payment Requirements Technical Updates
CMS is finalizing technical changes to the Conditions of Participation (CoPs) that will add the physician member of the hospice interdisciplinary group (IDG) as an individual who may review the clinical information for each patient and provide written certification that the patient’s life expectancy is anticipated to be six months or less if the illness runs its normal course. In the hospice payment regulations, CMS updated the provisions regarding certification and admission to hospice care to certify that, if the medical director is unavailable, the physician designee may certify the terminal illness and determine admission to hospice.
CMS is also finalizing changes to the text of the payment regulations that are intended to reorganize and more clearly distinguish the separate requirements for the election statement and notice of election.
The text of the Final Rule is available here. CMS’s fact sheet on the Final Rule is available here.
Reporter, Jenna M. Anderson, Los Angeles, +1 213 443 4328, janderson@kslaw.com.
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CMS Issues FY 2025 Inpatient Rehabilitation Facility Prospective Payment System and Quality Reporting Program Final Rule – On July 31, 2024, CMS published a final rule updating the Medicare rates and policies applicable to inpatient rehabilitation facilities (IRFs) under the IRF Prospective Payment System (PPS) and the IRF Quality Reporting Program (QRP) for fiscal year (FY) 2025 (the Final Rule). A summary of the Final Rule is available below.
Updates to IRF PPS Payment Policies
CMS finalized a 3.0% increase to the IRF PPS payment rate, reflecting a market basket increase of 3.5% less a 0.4 percentage point productivity adjustment. CMS also finalized updates to the outlier threshold to maintain outlier payments at 3% of total payments. CMS estimates an increase in IRF payments of $280 million in FY 2025, up from $255 million in the proposed rule.
Final Wage Index Update
CMS finalized the IRF PPS wage index using the Core-Based Statistical Areas (CBSAs) defined within OMB Bulletin 23-01. The Final Rule establishes a permanent 5% cap on annual wage index decreases to mitigate the impact of yearly changes in IRF payments.
CMS also finalized the end of the rural adjustment for IRFs that transition from rural to urban status under the new CBSAs. For FY 2025, CMS estimates that eight IRFs will change their status from rural to urban. 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.
Updates to the IRF QRP
Beginning with the FY 2028 IRF QRP (beginning with patients admitted on October 1, 2026), CMS made the following changes to the IRF QRP:
- Adopted four new items in the IRF-Patient Assessment Instrument (PAI): (1) Living Situation (one item), (2) Food (two items), and (3) Utilities (one item);
- Modified the Transportation item in the IRF-PAI, collected under the SDOH category; and
- Removed the Admission Class assessment item collected at admission from the IRF-PAI item set.
Requests for Information (RFIs)
CMS received feedback on the following RFIs, which will develop potential policies for rulemaking in future years:
- Future measure concepts for the IRF QRP, including vaccination composite, pain management and depression; and
- Creation of an IRF QRP Star Rating System to be reported on Care Compare and the Provider Data Catalog.
The fact sheet for the IRF PPS and QRP Final Rule is available here.
The Final Rule will be published in the Federal Register on August 6, 2024. A copy of the Final Rule is available here.
Reporter, Elizabeth Key, Sacramento, +1 916 321 4821, ekey@kslaw.com.
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CMS Publishes FY 2025 Inpatient Psychiatric Facilities Prospective Payment System and Quality Reporting Updates Final Rule – On July 31, 2024, CMS published a final rule updating the Medicare rates and policies applicable to inpatient psychiatric facilities (IPFs) under the IPF Prospective Payment System (PPS) and the IPF Quality Reporting Program (QRP) for fiscal year (FY) 2025 (the Final Rule). A summary of the Final Rule is available below.
Updates to IPF Payment Rates
CMS finalized a 2.8% increase to the IRF PPS payment rate, reflecting a market basket increase of 3.3% less a 0.5 percentage point productivity adjustment. CMS also finalized updates to the outlier threshold to maintain outlier payments at 2.0% of total payments. CMS estimates total payments to IPFs will increase by $65 million.
Revisions to IPF PPS Patient-Level Adjustment Factors
The Consolidated Appropriations Act, 2023 requires CMS to revise the IPF PPS methodology for determining payment rates for FY 2025 and subsequent years. CMS revised the methodology for determining the payment rates under the IPF PPS for psychiatric hospitals and psychiatric units. CMS finalized revisions to the IPF PPS patient-level adjustment factors, including Medicare Severity Diagnosis Related Groups (MS–DRGs) assignment of the patient’s principal diagnosis, selected comorbidities, patient age, and a variable per diem adjustment.
CMS also updated the regression model used to determine IPF PPS payment adjustments to reflect costs and claims data from 2019-2021. Based on CMS’s analysis, CMS finalized changes to the patient-level adjustments in a budget-neutral manner. This means the estimated payments to IPFs for FY 2025 would be the same with or without the finalized revisions.
Increase to the Electroconvulsive Therapy Payment per Treatment
IPF PPS claims and cost data indicates that since 2005, ancillary costs for stays that include electroconvulsive therapy (ECT) treatments have increased more than the ECT per treatment payment. To address this discrepancy, the Final Rule increases the IPF PPS ECT per treatment amount to $661.52, up from the FY 2024 ECT payment per treatment of $385.58.
Wage Index Update
In the Final Rule, CMS adopted the CBSA Labor Market Areas for the IPF PPS wage index as defined in the OMB Bulletin 23-01. CMS also implemented a transition period for providers transitioning from rural to urban based on these CBSA revisions. The affected providers 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.
Clarification of Requirements for Reporting Ancillary Charges and All-Inclusive Status Eligibility Under the IPF PPS
Currently, CMS expects IPFs with a charge structure to report ancillary costs and charges on cost reports. In contrast, IPFs without this cost structure have the option to use an alternative method of cost reporting by filing all-inclusive cost reports. In the Final Rule, CMS clarified the eligibility criteria for the option to file an all-inclusive cost report. Along with other operational changes, this clarification is meant to ensure that only government-owned, IHS, or tribally-owned IPF hospitals are permitted to file an all-inclusive cost report for cost reporting periods beginning on or after October 1, 2024.
Updates to the IPF QRP
CMS adopted a new measure, the 30-Day Risk-Standardized All-Cause Emergency Department Visit Following an Inpatient Psychiatric Facility Discharge measure (IPF ED Visit measure). The IPF ED Visit measure assesses the proportion of patients 18 and older with an emergency department visit, including observation stays, within 30 days of discharge from an IPF without subsequent admission. Patients subsequently admitted to an acute care hospital or IPF are represented under the Thirty-Day All-Cause Unplanned Readmission Following Psychiatric Hospitalization in an Inpatient Psychiatric Facility measure, which is already in the IPF QRP.
After considering public comments, CMS declined to finalize its proposal to require IPFs to submit patient-level quality data for certain measures on a quarterly basis, as opposed to the current annual basis. CMS determined that some IPFs may be unable to meet this requirement in the proposed timeframe. Therefore, CMS decided not to finalize this proposal and to maintain the current annual reporting for these measures.
The fact sheet for the IPF PPS and QRP Final Rule is available here. The Final Rule will be published in the Federal Register on August 7, 2024.
A copy of the Final Rule is available here.
Reporter, Elizabeth Key, Sacramento, +1 916 321 4821, ekey@kslaw.com.
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CMS Provides Instructions and Timelines for Processing of Pre-October 1, 2013 SSI Realignment Requests
On July 26, 2024, CMS issued Change Request (CR) No. 13413 providing instructions and timelines for Medicare Administrative Contractors (MACs) for the processing of SSI realignment requests for cost reporting periods before October 1, 2013. This CR comes after a several-year moratorium on the processing of such requests which was in place pending CMS’s adoption of a final rule regarding the treatment of Medicare Part C days in providers’ Medicare Disproportionate Share Hospital (DSH) calculation.
Earlier this year in February 2024, CMS published Transmittal 12513 for CR 13294 to issue guidance to MACs on the treatment of Medicare Part C days in providers’ calculation of their Medicare DSH adjustment effective March 25, 2024. The CR contained instructions for MACs to implement the requirements of the CMS-1739-F “Medicare Part C Days in the Calculation of a Hospital’s Medicare Disproportionate Patient Percentage” final rule published on June 9, 2023. That rule finalized CMS’s proposal that a patient enrolled in a Medicare Advantage plan remains entitled to benefits under Medicare Part A and will be counted in the DSH Medicare fraction and not counted in the numerator of the Medicaid fraction for cost reporting periods that include discharges before October 1, 2013. That transmittal concluded the multi-year moratorium in which MACs have held settlements for cost years affected by the Allina litigation. However, Change Request 13294 was silent on the question of how CMS will address timelines for resolving outstanding SSI realignment requests. Under 42 C.F.R. 412.106(b)(3), hospitals may submit a written request to CMS through their MAC to use the hospital’s cost reporting period instead of the Federal fiscal year. This request includes the hospital’s name, provider number, and cost reporting period end date.
Now, CMS has announced that the federal fiscal year SSI ratios available on the CMS DSH website for cost reporting periods starting before October 1, 2013, have been determined pursuant to CMS-1739-F, issued June 9, 2023, using the data available to CMS. CMS explained that for realignment requests for cost reporting periods starting before FY 2014, CMS will calculate cost reporting period SSI ratios for all periods and for all hospitals. CMS will make available these ratios on the CMS DSH website. CMS instructs the MACs to use these cost reporting period SSI ratios to determine hospitals’ DSH payments for realignment requests.
CMS has instructed MACS to send hospitals they service a notification letter that the cost reporting period SSI rations have been posted and ask hospitals to confirm any realignment requests for the cost reporting periods before FY 2014. The MAC’s notification letter also has instructions for new realignment requests as hospitals may submit realignment requests for cost reporting periods beginning prior to October 1, 2013, at any time in accordance with CMS realignment request policy. While this CR signals a step forward, it affords MACs a generous timeline of 24 months to issue new NPRs after receiving confirmation of existing or new realignment requests.
The CMS Transmittal can be accessed here.
The CMS DSH website can be accessed here.
Reporter, Kasey Ashford, Washington D.C., +1 202 626 2906, kashford@kslaw.com.
Editors: Chris Kenny and Kate Stern
Issue Editors: David Tassa and Christopher Jew