Medicare Hospital Inpatient Prospective Payment System (IPPS) Federal Fiscal Year (FFY) 2022 Final Rule
CMS-1752-F drafted on 8/2/2021; Published in the Federal Register on 8/13/2021
Rural Redesignation Update
Medicare IPPS Base Rates
Repeal of Market-based Data Collection, MS-DRG Relative Weight Policy
Changes to the New COVID-19 Treatments Add-on Payment (NCTAP)
Finalized Changes to Wage Index
- CMS proposed to make two changes to the timing of a hospital’s request to cancel a previously granted reclassification from urban to rural, which would in effect lock a hospital into its rural status for a longer period. CMS acknowledges that these changes are necessary to address the practice of applying for and canceling rural reclassification to manipulate a State’s rural wage index, which is “detrimental to the stability and accuracy of the Medicare wage index system”. The proposed two changes are described below.
- First, CMS proposed that requests to cancel rural reclassifications be submitted to the CMS Regional Office no earlier than one calendar year after the date when the reclassification became effective, and
- Second, CMS proposed to replace an existing rule, which requires cancellation of reclassification no later than 120 days prior to the end of Federal Fiscal Year to be effective at the beginning of the next Federal Fiscal Year, with a requirement that cancellation requests become effective in the Federal Fiscal Year that begins in the calendar year after the calendar year in which the request was submitted.
- For all IPPS hospitals whose wage indexes are greater than 1.000, CMS finalized its proposal in FFY 2022 to apply the wage index to the proposed labor-related share of 67.6% of the national standardized amount, compared to 68.3% in FFY 2021.
Finalized Changes to Uncompensated Care DSH
 In the Factor 1 calculation, CMS first determines Medicare DSH payments in the absence of UC DSH payments under the ACA (section 1886(r)(1) of the Act). Data from the Office of the Actuary’s January 2021 Medicare DSH estimates, based on data from the March 31, 2021 update of the Medicare Hospital Cost Report Information System (HCRIS) and the FY 2021 IPPS/LTCH PPS final rule IPPS Impact File. Updates include Market Basket (Update Factor component), ACA Payment Reductions (Update Factor component), Multifactor Productivity Adjustment (Update Factor component), Documentation and Coding (Update Factor component), Discharge Factor, Case-Mix Index Factor, and an Other Factor.
- Charity Care and Uninsured Discounts for “Medically Necessary” services only
- Shift to Short Term Hospital Services Only
- Split between patient coinsurance, copayment deductibles vs. other patient liabilities
- Clarification on the reporting of Implicit Price Concessions and Inferred Contractual Relationships
- New Reporting Tables for Charity Care and Bad Debt Information
Organ Acquisition Payment Policies
FFY 2022 Value-Based Purchasing (VBP) Program, Hospital Readmission Reduction (HRR), and Hospital Acquired Conditions (HAC) Update
Empirical DSH – Section 1115 Waiver Days
Medicare Bad Debt
Should you have further questions about these changes and wish to discuss them, please contact the firstname.lastname@example.org.