Medicare Hospital Inpatient Prospective 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
On August 2, 2021, the Centers for Medicare & Medicaid Services (CMS) issued the final rule for Federal Fiscal Year (FFY) 2022 Inpatient Prospective Payment System (IPPS). The Final Rule builds on key priorities to close health care equity gaps and support greater access to life-saving diagnostics and therapies during the public health emergency (PHE) and beyond. Its polices will assist in supporting a hospital’s readiness to respond to future public health threats and develop the health care workforce in rural and underserved communities. The Final Rule revises reporting requirements for scoring, payment, and public quality data in their effort to reduce the adverse impacts of the pandemic and any future unplanned events. The Final Rule updates Medicare payment policies and rates for hospitals under the IPPS and the Long-Term Care Hospital (LTCH) PPS effective for discharges on or after October 1, 2021 (FFY 2022).
CMS received greater than 6,500 public comments to the FFY 2022 Proposed Rule. These comments related to empirical disproportionate share hospital (DSH) payments, organ acquisition costs, and the provision of the Consolidated Appropriations Act (CAA) 2021, related to payments to hospitals for direct graduate medical education (GME) and indirect medical education (IME) costs, will be addressed in subsequent parts.
CMS, in this Final Rule, establishes new requirements and revises existing requirements for the Hospital Value-Based Purchasing (VBP) Program, Hospital Readmissions Reduction Program, Hospital-Acquired Condition (HAC) Reduction Program, Hospital Inpatient Quality (IQR) Reporting Program, LTCH Quality Reporting Program, PPS-Exempt Cancer Hospital Reporting (PCHQR) Program, and the Medicare Promoting Interoperability Program
CMS uses FY 2019 data where “FY 2020 data is significantly impacted by the COVID-19 PHE” in FFY 2022 rate setting. For instance, CMS uses FY 2019 MedPAR claims data in its MS-DRG classification analysis, and FY 18/19 HCRIS cost report data in determining FY 2022 IPPS MS-DRG relative weights. Throughout the Final Rule, CMS “clearly identifies” where and how the Agency uses alternative data (as compared to more recent data from 2020 CMS would ordinarily use for rate setting).
Overall, the Final Rule will result in an estimated increase of $2.3bn in payments to providers. Included in that amount is a reduction of approximately $1.4bn in Medicare DSH and Uncompensated Care (UC) payments. Increases to hospital payments before the DSH and UC reduction for FFY 2022 is $3.7bn (3.1 percent).
Toyon’s Medicare Hospital IPPS FFY 2022 Final Rule update is summarized in separate articles broken down into the following sections:
I. Rural Redesignation Update
II. Medicare Inpatient Prospective System Base Rates
III. Repeal of Market-Based Data Collection, MS-DRG Relative Weight Policy
IV. Changes to the New Covid-19 Treatments Add-On Payment (NCTAP)
V. Finalized Changes to Wage Index
VI. Finalized Changes to Uncompensated Care DSH
VII. Organ Acquisition Payment Policies
VIII. Value-Based Purchasing (VBP) Program, Hospital Readmission Reduction (HRR), and Hospital Acquired Conditions (HAC) Update
IX. Empirical DSH - Section 1115 Waiver Days
X. Medicare Bad Debt
Should you have further questions about these changes and wish to discuss them, please contact scott.besler@toyonassociates.com.