News & Insights


April 1, 2024

Health Headlines – April 1, 2024


CMS Issues Proposed PPS Rule for Inpatient Rehabilitation Facilities

On March 29, 2024, CMS published its fiscal year (FY) 2025 prospective payment system (PPS) proposed rule for inpatient rehabilitation facilities (IRFs). Comments are due by 5 pm ET on May 28, 2024. In the IRF PPS proposed rule, CMS proposes to increase IRF PPS rates by 2.8 percent, which is based on a market basket increase of 3.2 percent minus a 0.4 percent productivity adjustment. CMS also proposes other updates described below. 

Proposed Updates to Payment Policies and Wage Index

CMS proposes additional updates to payment policies and the IRF PPS wage index to account for the 2020 census that updates the core-based statistical areas. Along with the proposed market basket increase of 3.2 percent, CMS proposes to adjust the outlier threshold to maintain outlier payments at 3.0 percent of total payments. Accordingly, CMS estimates an increase in FY 2025 of IRF payments of $255 million, which, according to CMS, reflects a total increase of $280 million adjusted by $25 million to account for the outlier threshold adjustment. CMS also proposes to phase out the rural adjustment for IRFs as follows: in FY 2025 IRFs would receive two-thirds of the rural adjustment, in FY 2026 IRFs would receive one-third, and IRFs would not receive any rural adjustment in FY 2027.

Proposed Updates to the IRF Quality Reporting Program (QRP)

CMS proposes several updates to the IRF QRP that would begin with the FY 2028 IRF QRP with patients or residents admitted on or after October 1, 2026. Under the IRF-Patient Assessment Instrument (PAI), CMS would adopt one new item in the “Living Situation” Social Determinants of Health (SDOH) category, two new items in the “Food” SDOH category, and one new item in the “Utilities” SDOH category. CMS would also modify a Transportation item under the SDOH category and remove the “Admission Class” assessment item.

Requests for Information

CMS also requests information on the following:

  • Potential measurement concepts that could be new IRF QRP measures; and
  • Feedback on developing an IRF QRP Star Rating System.

A copy of the proposed rule is available here.

Reporter, Kate Stern, Atlanta, +1 404 572 4661,

CMS Issues Proposed PPS Rule for Inpatient Psychiatric Hospitals

On March 28, 2024, CMS issued its fiscal year (FY) 2025 prospective payment system (PPS) proposed payment rule for inpatient psychiatric hospitals (IPFs). The proposed rule is expected to be published in the Federal Register on April 3, 2024, and comments are due by 5 pm ET on May 28, 2024. 

CMS proposed the following changes to FY 2025 payment rates. First, CMS proposed an increase of 2.7 percent to the IPF PPS payment rate. CMS also proposed to update the outlier threshold in order for outlier payments to stay at 2.0 percent of total payments, which CMS believes will decrease aggregate payments by 0.1 percent. Accordingly, as compared with FY 2024 payments, CMS calculates that FY 2025 payments to IPFs would increase by $70 million, which would reflect a 2.6 percent increase. The agency also proposes changes to the IPF patient-level adjustment factors as well. Additionally, the proposed rule would increase the per-treatment amount of electroconvulsive therapy treatments from $385.58 to $660.30.

CMS also proposes the following:

  • Clarifications to the eligibility criteria to elect to file an all-inclusive cost report; and
  • Changes to ensure that only government-owned or tribally-owned IPF hospitals may file an all-inclusive cost report.

CMS solicits comments on the burden that additional data collection under the Consolidated Appropriations Act of 2023 will impose and ways the agency can minimize the burden as well as feedback on IPF FFS facility-level adjustment factors.

Finally, with respect to the IPF quality reporting program (QRP), CMS proposed adopting the “30-Day Risk-Standardized All-Cause Emergency Department Visit Following an Inpatient Psychiatric Facility Discharge” measure. CMS also proposed requiring patient-level measures data reporting on a quarterly basis.

A display copy of the proposed rule is available here.

Reporter, Kate Stern, Atlanta, +1 404 572 4661,

CMS Issues Proposed Rule for Skilled Nursing Facilities

On March 28, 2024, CMS issued a proposed rule (Proposed Rule) for fiscal year (FY) 2025 that would update Medicare payment policies and rates for skilled nursing facilities (SNFs) under the SNF Prospective Payment System (PPS). Under the Proposed Rule, CMS presented several updates, revisions, and changes to Medicare payment policies. Some of the proposed changes are highlighted below, and interested stakeholders are encouraged to submit comments. Comments are due by 5:00 PM ET on May 28, 2024. 

SNF Payment Rates

In the Proposed Rule, CMS proposes an update to the SNF PPS rates by 4.1% based on the proposed SNF market based of 2.8%, plus a 1.7% market basket forecast error adjustment, and a negative 0.4% productivity adjustment. SNF Value-Based Purchasing Program reductions, estimated to total $196.5 million in FY 2025, are not included in these figures. Additionally, CMS proposed to update the Skilled Nursing market basket base year from the current base year 2018 to a new base year of 2022. Further, the SNF PPS wage index would be updated using Core-Based Statistical Areas (CBSAs) to enhance wage accuracy.

Patient-Driven Payment Model (PDPM) ICD-10 Code Mappings

CMS proposes several technical revisions to the code mappings used to classify patients under the PDPM to improve payment and coding accuracy.  CMS implemented the PDPM in FY 2020 which is a new case-mix classification system to classify SNF patients under the SNF PPS.  The Proposed Rule includes a request for information (RFI) on potential updates to the non-therapy ancillary component of PDPM.

Nursing Home Enforcement

CMS proposes revisions to existing long-term care (LTC) enforcement regulations that would enable CMS and the States to impose civil money penalties to “better reflect amounts that are more consistent with the type of noncompliance that occurred.” As proposed, CMS would have expanded enforcement authority to “drive sustained correction of health and safety deficiencies.” CMS is inviting comments on how to use this proposed flexibility to better hold nursing homes accountable for failing to provide safe, quality care to its residents. 

SNF Quality Reporting Program (QRP)

CMS proposes a number of changes to the SNF QRP, including adding four new Social Determinants of Health (SDOH) items –one item for “Living Situations,” two items for “Food,” and one item for “Utilities”–and modifying one SDOH assessment item. These proposed changes aim to address the resident’s physical health and access to care coordination with other healthcare providers, facilities, and agencies during transitions of care. Additionally, CMS proposes that SNFs included in the SNF QRP participate in the data validation process through the Minimum Data Set, a comprehensive assessment of each resident’s functional capabilities, starting in FY 2027.  CMS seeks feedback with an RFI on quality measure concepts under consideration for future SNF QRP years. 

The proposed rule is scheduled to be published in the Federal Register on April 3, 2024. A display copy can be found here. The CMS fact sheet is available here.

Reporter, Kate Karpenko, Houston, +1 713 751 3269,

CMS Issues Hospice Proposed Payment Rule

Last week, CMS issued a proposed rule (Proposed Rule) for fiscal year (FY) 2025 aiming to update Medicare hospice payments and aggregate cap amount in accordance with existing statutory and regulatory requirements. The Proposed Rule includes CMS’s routine updates to the hospice payment rates and aggregate cap amount for FY 2025 along with adoption of the most recent Office of Management and Budget (OMB) statistical area delineations, which would affect the hospice wage index, clarify policies on hospice “election statement” and “notice of election” (NOE), and clarify language regarding hospice certification. Additionally, the Proposed Rule suggests collection of Hospice Quality Reporting Program (HQRP) metrics using the Hospice Outcomes and Patient Evaluation (HOPE) tool, proposes two HOPE-based measures and details future development plans for it, seeks information on integrating social determinants of health (SDOH) elements, updates on Health Equity, future quality measures (QMs), public reporting standards, and changes to the Consumer Assessment of Healthcare Providers and Systems (CAHPS) Hospice Survey. Certain of the proposed changes are highlighted below, and interested stakeholders are encouraged to submit comments by May 28, 2024.

FY 2025 Annual Rate Changes & Payment Policies

The Proposed Rule suggests a 2.6% increase in payments for FY 2025, resulting in an estimate increase of $705 million in payments from FY 2024.  The hospice payment update also includes an updated aggregate cap of $34,364.85 which limits the overall payments per patient that may be made to a hospice annually.  As proposed, hospices that fail to submit the required quality data  would have a -1.4% hospice payment update percentage.

CMS also proposes to update the current Medicare hospice payment policies by incorporating the latest OMB statistical area delineations based on the 2020 Decennial Census and applying a 5% cap to limit any decrease in the wage index from the prior year. CMS aims for this cap to prevent geographic area’s wage index from falling below 95% of its wage index calculated in the prior fiscal year.  Also, CMS invites comments on the potential implementation of a separate payment mechanism to account for high-intensity palliative care services, such as that of chemotherapy and radiation, provided under the hospice care.

Hospice Quality Reporting Program (HQRP)

The Proposed Rule adds two new measures to the Hospice Quality Reporting Program (HQRP)—Timely Reassessment of Pain Impact and Timely Reassessment of Non-Pain Symptom Impact which will determine how many patients assessed with moderate or severe pain/moderate or severe non-pain were reassessed by the hospice within two calendar days.  Additionally, the HOPE patient-level data collection tool, planned for FY 2025 introduction, will collect detailed patient data throughout the hospice stay and expand several domains over the current Hospice Item Set by including an updated sociodemographic, expanded diagnoses, symptom impact assessment, and imminent death factors.

Additionally, the Proposed Rule sets out changes to the Hospice Consumer Assessment of Healthcare Providers and Systems (CAHPS) Survey. These changes include the addition of a web-mail mode (email invitation to a web survey, with mail follow-up to non-responders), shortened and simplified survey, prenotification letter and extended field period, addition of a new, two-item Care Preferences measure, revisions to the existing Hospice Team Communication measure and the existing Getting Hospice Care Training measure, and removal of certain items related to nursing homes.  Comments related to the Hospice SFP as finalized in the CY 2024 Home Health final rule (88 FR 77876) are still being reviewed and considered as to whether an amendment may be necessary.

Hospice Conditions of Participation Technical Update

The Proposed Rule also sets out technical changes to the Conditions of Participation (CoPs) to address the language discrepancies related to a medical director and physician designee. These changes include (1) addition of the “physician member of the hospice [interdisciplinary group (] IDG[)] as an individual who may review the clinical information for each patient and provide written certificate that it is anticipated that the patient's life expectancy is six months or less if the illness runs its normal course” and (2) “update to the medical director and admission to hospice care CoPs to clarify that if the medical director is unavailable, the physician designee may review the clinical information and certify the terminal illness.”  Additionally, CMS is proposing clarifications to the election statement and notice of election in the CoPs to enhance understanding of the separate requirements without altering the current policy.

The Proposed Rule is scheduled to be published on April 4, 2024 and can be found here. The CMS fact sheet is available here.

Reporter, Kate Karpenko, Houston, +1 713 751 3269,

Congressmembers Send Letter to Departments Raising Provider Concerns with No Surprises Act Implementation

On March 18, 2024, thirty-nine (39) members of the United States House of Representatives sent a letter urging federal agencies to finalizing rulemaking regarding the implementation of the No Surprises Act. The letter, addressed to the Secretaries of the Department of Health and Human Services, the Department of the Treasury and the Department of Labor (collectively, the Departments), encouraged the Departments to finalize proposals from the November 2023 Independent Dispute Resolution (IDR) Operations Proposed Rule, and to give additional focus to problem-areas reported by constituents. 

Specifically, with respect to the IDR Operations Proposed Rule, the Representatives urged the Departments to finalize the proposals to:Permit parties to batch all items or services associated with a single patient encounter;

  • Require payors to share information with providers related to whether the claim is eligible for the IDR process;
  • Require the parties to document participation in the open negotiation process in the federal IDR portal;
  • Create a process for the government to assist IDR entities to reduce any backlog in processing disputes; and
  • Require payors to register with the Departments for the IDR process, and to provide information to the Departments regarding the applicability of the IDR process to items and services covered by the plan.

The Congressmembers also raised additional concerns reported by constituents, including continued problems with the calculation of the Qualifying Payment Amount (QPA), network shrinking, and compliance with and enforcement of timelines for payment required by statute. To address these issues, the Congressmembers encouraged the following:

  • Improved administration and enforcement of the QPA. Providers report concerns that insurers are including rates that improperly depress the QPA, such as including “ghost rates” or rates for services a provider does not actually furnish.
  • Increased monitoring of payor’s efforts to shrink networks and decrease payments in light of the NSA. Providers report that insurance companies are using the NSA to push providers out of network, are reducing payments for out-of-network services, are failing to make timely payments for out-of-network services and are refusing to engage in the open negotiation process. The letter cited one 2023 Impact Analysis by Americans for Fair Health Care, that found 36% of in-network contracts were terminated with 81% of providers in hospital-based specialties having at least one contract terminated following the enactment of the NSA. The analysis also found that payors cut payments by 52% after terminating in-network contracts, and 94% of providers received payments priced at or below Medicare rates. The Representatives expressed concern at these trends and asked the Departments to more proactively monitor such trends.
  • Enforcement of the statutory payment requirements. Providers report that some payors are not making payment within 30 days of an IDR determination, which has required some providers to turn to the courts for enforcement of IDR decisions. The Representatives urged enforcement of the payment deadlines, and further urged the Departments to simplify the IDR process by finalizing the proposed rules regarding batching and not limiting the number of claims that can be batched. 

The Congressmembers’ letter is available here.

Reporter, Alana Broe, Atlanta, +1 404 572 2720,

CMS Issues New Guidance Regarding Hospital Requirements for Informed Consent from Patients Undergoing Sensitive Examinations

On April 1, 2024, CMS released new guidance to reiterate and clarify hospital requirements for informed consent from patients with respect to medical professionals performing sensitive examinations, especially for patients under anesthesia. In addition to the new guidance, the Office for Civil Rights (OCR) recently issued an FAQs document that explains a patient’s right to restrict who has access to their Protected Health Information (PHI) when under anesthesia during a medical procedure.  

CMS summarized its new guidance in a few points. First, the new guidance was issued in response to increasing concerns that practitioners, medical students, and supervised medical/advanced practice providers were not obtaining informed patient consent before performing sensitive examinations (e.g., breast, pelvic, prostate, and rectal examinations) on anesthetized patients in connection with training and education. Second, CMS noted that requirements related to informed consent for hospitals are located in the Hospital Conditions of Participation, including the Patient’s Rights Conditions of Participation, Medical Records Services Conditions of Participation, and Surgical Services Conditions of Participation. Finally, CMS stressed that a hospital’s patient informed consent policy and process, along with its forms, must allow a patient or the patient’s representative to make fully informed decisions about their care.  CMS is revising its hospital interpretive guidance about informed consent to reflect the new guidance. 

In addition to the new guidance, HHS Secretary Becerra and CMS Administrator Brooks-LaSure noted in an April 1, 2024 letter to teaching hospitals and medical schools that OCR investigates complaints alleging a patient’s PHI was used or disclosed in violation of HIPAA. The letter pointed out the FAQs document from OCR that explains a patient’s right to be protected against impermissible use and disclosure of PHI when under anesthesia during a medical procedure. 

A copy of the new guidance is available here. A copy of the OCR FAQs document is available here. Secretary Becerra and Administrator Brooks-LaSure’s letter to teaching hospitals and medical schools is available here.

Reporter, Doug Comin, Atlanta, +1 404 572 3525,

Biden Administration Streamlines CHIP and Medicaid Enrollment, Expands Protections for Covered Population

Last week, the Biden-Harris administration (the Administration) announced a new rule simplifying the process for enrolling in Medicaid,  the Children’s Health Insurance Program (CHIP), and the Basic Health Program (BHP). Additionally, to accommodate individuals who may soon lose Medicaid coverage due to the end of protections from the COVID-19 Public Health Emergency, HHS announced that it is extending the Special Enrollment Period for purchasing plans through the Affordable Care Act’s health insurance exchanges.  

The Final Rule

On March 27, 2024, the Administration issued a final rule simplifying the enrollment requirements for the CHIP, Medicaid, and BHP programs. This rule will remove administrative barriers that could block eligible individuals from receiving CHIP, Medicaid, or BHP coverage. Some actions the rule takes include: 

  • Prohibiting states from requiring in-person interviews for individuals whose eligibility depends on age, blindness, or disability;
  • Prohibiting states from requiring additional documentation to verify someone’s assets if that person provides information that is “reasonably compatible with information  returned through an asset verification system;”
  • Ending the requirement that individuals “apply for other benefits as a condition of Medicaid eligibility;” and
  • Allowing states to determine an individual’s financial eligibility by deducting “projected predictable medical expenses” from their income.

In addition to easing enrollment requirements, the rule also imposes new restrictions on states before they can terminate a person’s coverage:

Requiring states to provide a “minimum 90-day reconsideration period” before terminating coverage due to a “failure to return information needed to redetermine eligibility” (for persons 65 and older, having blindness, or having a disability);

  • Requiring states to provide members at least 30 days to return documentation requested for renewing coverage; 
  • Requiring states to provide prepopulated enrollment forms (for persons 65 and older, having blindness, or having a disability); 
  • “Eliminating annual and lifetime limits on children’s coverage in CHIP;” and 
  • “Ending the practice of locking children out of CHIP coverage” for families who cannot afford to pay premiums.

The final rule is scheduled to take effect June 1, 2024, sixty days after its anticipated April 2, 2024 publication date.

The Special Enrollment Period

On March 28, 2024, HHS announced that it is extending the end date for its temporary Special Enrollment Period from July 31, 2024 to November 30, 2024. During the COVID-19 Public Health Emergency, the federal government allowed states to receive a temporary 6.2 percentage point increase in their federal matching percentage in exchange for letting existing Medicaid enrollees keep their coverage during the emergency. This led to many people keeping their Medicaid coverage who may not have otherwise qualified. However, a “Medicaid unwinding” started on April 1, 2023, where states were once again allowed to terminate coverage for individuals who were no longer eligible, causing many to lose their coverage and creating a need to find alternatives.

Usually, people can only purchase plans through the Affordable Care Act’s health insurance exchanges during the Open Enrollment Period from November 1 through January 15. However, the federal government chose to extend the Special Enrollment Period to help prevent people from going uninsured due to the Medicaid unwinding. As the Medicaid unwinding continues and more patients leave Medicaid and enroll in exchange plans, providers can expect their patient mix to change accordingly.

The final rule can be found here, a fact sheet regarding the rule can be found here, and the Administration’s March 27, 2024 announcement can be found here. Additionally, HHS’s announcement regarding the Special Enrollment Period extension can be found here, and an explanation of the Medicaid unwinding process can be found here.

Reporter, Gregory Fantin, Washington D.C., +1 202 626 9271,


OCR Settles Another HIPAA Right of Access Enforcement Action

The HHS Office for Civil Rights (OCR) announced a settlement with Oklahoma-based Phoenix Healthcare. This settlement resolves a potential violation under the Health Insurance Portability and Accountability Act (HIPAA) Right of Access provision, which requires that individuals or their personal representatives have timely access to their health information. This marks OCR’s 47th enforcement action under the HIPAA Right of Access Initiative and demonstrates that OCR continues to take enforcement actions for alleged violations of the Right of Access provision.