Inpatient pay rule would give hospitals $2.5 billion boost

CMS on Tuesday proposed eliminating its plan for providers to disclose their contract terms with Medicare Advantage insurers, one of a slew of high ticket changes in its Hospital Inpatient Prospective Payment System rule.

In the proposed rule, CMS said hospitals would no longer be expected to report the median payer-specific negotiated charge with MA insurers on its Medicare cost reports retroactive to Jan. 1, 2021. The change would eliminate more than 63,000 burden hours for providers.

Hospitals have long challenged the agency’s attempts to impose price transparency requirements, maintaining they wouldn’t help consumers or lower healthcare costs.

“Privately negotiated rates take into account any number of unique circumstances between a private payer and a hospital and their disclosure will not further CMS’s goal of paying market rates that reflect the cost of delivering care,” Tom Nickels, the American Hospital Association’s executive vice president, said in a statement Tuesday. “We once again urge the agency to focus on transparency efforts that help patients access their specific financial information based on their coverage and care.”

CMS plans to increase Medicare fee-for-service payments for acute care inpatient hospitals and long-term care hospitals by about $2.5 billion—the agency said it would set rates using 2019 data in light of the pandemic.

That figure includes funding for additional medical residency positions, which Congress included in its end-of-year spending package. CMS expects the extra graduate medical education slots to about cost $300 million each year after a five-year phase in of 1,000 additional residencies. Congress could add even more GME slots to the infrastructure bill its been working on.

The agency also wants to extend add-on payments for new COVID-19 treatments. Currently, those payments would go away shortly after the end of the public health emergency. CMS plans to continue them until the end of the fiscal year during which the PHE concludes to encourage providers to make new treatments available to COVID-19 patients.

“The rule also proposes to implement section 9831 of the American Rescue Plan Act of 2021 to permanently reinstate the imputed floor-wage-index for all-urban States for FY 2022,” CMS said in a statement.

In addition, CMS proposed several changes to the Hospital Readmissions Reduction Program, Hospital-Acquired Condition Program and Hospital Value-Based Purchasing Program to ensure that hospitals wouldn’t get penalized by the agency for COVID-19 affected quality measures.

“The policies CMS is proposing to mitigate the impact of COVID-19 on quality measures will help prevent a hospital’s quality score from telling a false story and being unfairly penalized,” Blair Childs, senior vice president of public affairs for group purchasing organization Premier Inc., said in a statement.

Likewise, CMS wants to allow accountable care organizations in the BASIC track of the Medicare Shared Savings Program to opt out of advancing to a higher level of risk for the 2022 performance.

But that option wouldn’t let them off the hook for the 2023 peformance year.

“An ACO that elects this advancement deferral option would be automatically advanced to the level of the BASIC track’s glide path in which it would have participated during PY 2023 if it had advanced automatically to the required level for PY 2022,” the proposed rule said.

Biden’s CMS also asked the public to comment on how it can advance health equity through quality measurement and value-based payment programs. It made similar requests in each of its previously proposed payment rules.

Comments on the proposed rule are due June 28.


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