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April 12, 2021

Health Headlines – April 12, 2021


CMS Proposes an Increase in Medicare Payment Rates for Inpatient Rehabilitation and Psychiatric Hospitals for Fiscal Year 2022 – On April 7, 2021, CMS issued a proposed rule for the Inpatient Rehabilitation Facility (IRF) Prospective Payment System (PPS) and a proposed rule for the Inpatient Psychiatric Facility (IPF) PPS for fiscal year (FY) 2022.  The overall economic impact of the IRF PPS proposed rule would result in an estimated $160 million in increased payments from the federal government to IRFs during FY 2022, and the IPF PPS proposed rule would result in an estimated $90 million in increased payments to IPFs during FY 2022.  Both proposed rules also address CMS’s ongoing health equity efforts.  Comments on both proposed rules are due by June 7, 2021.

The IRF PPS proposed rule would make the following changes:

  • Increase IRF PPS rates by 2.2% based on the proposed 2.4% market basket update, less a 0.2 percentage point multi-factor productivity adjustment;
  • Adjust the outlier threshold to maintain outlier payments at 3.0% in FY 2022, resulting in a 0.3 % to overall outlier payments; and
  • Update the denominator for the Transfer of Health Information to the Patient-Post Acute Care quality measure by removing the location from the definition.

The IPF PPS proposed rule would make the following payment-related changes:

  • Increase the IPF PPS base rate by 2.2% from $815.22 to $833.50, while also increasing the payment for electroconvulsive therapy treatment from $350.97 to $358.84;
  • Decrease the labor-related share from 77.3% to 77.1%;
  • Decrease the cost outlier threshold by 4% from the current $14,630 to $14,030; and
  • Update the IPF PPS teaching policy for IPF hospital closures and displaced residents.

Additionally, the IPF PPS proposed rule would modify the IPF quality reporting program by:

  • Adopting voluntary patient-level data reporting for data submitted for payment determination for FY 2023 and mandatory patient-level data reporting for payment determination for FY 2024 and future years;
  • Adopting the COVID-19 Healthcare Personnel Vaccination measure for the FY 2023 payment determination and subsequent years; and
  • Adopting the Follow-up After Psychiatric Hospitalization measure for the FY 2024 payment determination and subsequent years.

Both the IRF PPS proposed rule and IPF PPS proposed rule acknowledge CMS’s on-going health equity efforts, in which CMS looks to “make healthcare quality more transparent to consumers and providers, enabling them to make better choices as well as promoting provider accountability around health equity.” In the IRF proposed rule, CMS seeks comments on the possibility of expanding measure development and the collection of other Standardized Patient Assessment Data Elements that address gaps in health equity in the IRF Quality Reporting Program. Similarly, in the IPF proposed rule, CMS is seeking feedback regarding future potential stratification of quality measure results by dual eligibility and other social risk factors in facility-specific reports, ways to improve demographic data collection, and the potential creation of a facility equity score to synthesize results across multiple measures and social risk factors.

CMS’s fact sheet for the IRF proposed rule is available here, and its fact sheet for the IPF rule is available here.  The IRF proposed rule is available here, and the IPF proposed rule is available here.

Reporter, Michelle Huntsman, Houston, +1 713 751 3211, mhuntsman@kslaw.com

CMS Issues Proposed Rules for Fiscal Year 2022 SNF and Hospice Payments – On April 8, 2021, CMS issued proposed rules for the Fiscal Year (FY 2022) Skilled Nursing Facility (SNF) Prospective Payment System (PPS) and FY 2022 hospice payments.  CMS estimates that the aggregate impact of the payment policies in the SNF PPS proposed rule would result in an increase of approximately $444 million in Medicare Part A payments to SNFs in FY 2022, and CMS estimates the hospice proposed rule would result in a $530 million increase in payments for hospices for FY 2022.  CMS is accepting comments on both proposed rules until June 7, 2021. 

Proposals in the FY 2022 SNF PPS Proposed Rule

  • Payment Increase.  As noted, CMS estimates that the aggregate impact of the payment policies in the SNF PPS proposed rule would result in an increase of approximately $444 million in Medicare Part A payments to SNFs in FY 2022.  However, CMS’s impact figures do not incorporate the SNF Value-Based Program reductions that are estimated to be $184.25 million in FY 2022.
  • Methodology for Recalibrating the Patient Driven Payment Model Parity AdjustmentCMS is seeking comments on a potential methodology for recalibrating the Patient Driven Payment Model (PDPM) parity adjustment. CMS implemented the PDPM in 2019 and intended the PDPM to be implemented in a budget neutral manner.  However, since PDPM’s implementation, CMS’s data suggests an unintended increase in payments of approximately 5%, or $1.7 billion in FY 2020.  CMS notes that the COVID-19 Public Health Emergency may have affected the data.  Accordingly, CMS is seeking comments on a potential method for recalibrating the PDPM parity adjustment. 
  • New Blood Clotting Factor Exclusion.  The Consolidated Appropriations Act (Pub. L. 116-260, enacted December 27, 2020) requires that certain specified blood clotting factors used for the treatment of patients with hemophilia and other bleeding disorders and items and services related to the furnishing of such factors be excluded from the consolidated billing requirements under the SNF PPS for items and services furnished on or after October 1, 2021. As a result, CMS is proposing a proportional reduction in the Medicare Part A SNF rates to account for this new exclusion. CMS’s proposed methodology, if finalized, would result in an estimated decrease of approximately $1.2 million in aggregate Part A SNF spending but CMS intends that this proposed reduction would be offset by the increase in Part B spending that would occur due to these items being excluded from SNF consolidated billing.
  • SNF Value-Based Purchasing Program.  The proposed rule also includes proposals for the SNF Value-Based Purchasing Program.  Specifically, CMS is proposing to suppress the SNF 30-Day All-Cause Readmission Measure for the FY 2022 program year because circumstances caused by the COVID-19 Public Health Emergency have affected the measure and the resulting performance scores significantly.  CMS is also soliciting input from stakeholders on which quality measures should be considered under an expanded SNF Value-Based Purchasing Program.
  • SNF Quality Reporting Program Update.  CMS is proposing certain updates to the SNF Quality Reporting Program, which is a pay-for-reporting program where SNFs that do not meet reporting requirements may be subject to a 2% reduction in their annual update.  CMS’s proposals regarding the SNF Quality Reporting Program include:
    • Closing the Health Equity Gap Request for Information– In accordance with other efforts to address the health equity gap, CMS is seeking feedback on ways to attain better health equity with respect to SNFs.  The proposed rule includes a Request for Information for methods of expanding measure development and the collection of new standardized patient assessment data elements that would help address gaps in health equity in the SNF Quality Reporting Program.  
    • Changing SNF Quality Measures –CMS is proposing certain new measures and updates to existing measures for the SNF Quality Reporting Program.  Specifically, CMS is proposing:
      • A new claims-based measure beginning with the FY 2023 program to estimate the rate of healthcare-associated infections that are acquired during SNF care and result in hospitalization;
      • A new measure beginning with the FY 2023 program which would require SNFs to report on COVID-19 vaccination among healthcare personnel; and
      • An update to the denominator for the Transfer of Health Information to Patient-Post Acute Care quality measure to avoid double counting of patients discharged home under the care of an organized home health service organization or hospice.

Proposals in the FY 2022 Hospice Proposed Rule

  • Payment Increase.  CMS estimates the hospice proposed rule would result in a 2.3% increase (approximately $530 million) in payments for hospices for FY 2022. 
  • Hospice Conditions of Participation.  The proposed rule includes changes to the hospice conditions of participation regarding hospice aide competency evaluation standards.  Specifically, CMS proposes making the COVID-19 waiver that allows for the use of pseudo-patients for hospice aide competency training permanent.  Pseudo-patients are people trained to participate in a role-play situation or a computer-based mannequin device.  CMS is also proposing a complimentary change that would allow hospices to focus on a hospice aides’ specific deficient and related skill(s) instead of assessing multiple areas within a competency evaluation. 
  • Hospice Quality Reporting Program.  CMS proposes certain changes to the Hospice Quality Reporting Program, including:
    • Adding new a measure called the Hospice Care Index, which would include 10 indicators of quality calculated from claims data;
    • Adding Consumer Assessment of Healthcare Providers and Systems (CAHPS®), Hospice Survey Star ratings on Care Compare;
    • Adding a claims-based measure for public reporting of hospice visits in the last days of life;
    • Removing the seven individual Hospice Item Set measures because a more broadly applicable measure, the Hospice Comprehensive Assessment Measure (NQF # 3235), is available and already publicly reported; and
    • Updating the Hospice Outcome and Patient Evaluation (HOPE) assessment instrument.
  • Closing the Health Equity Gap Request for Information.  Like with the SNF Quality Reporting Program, CMS is also issuing a request for information regarding closing the health equity gap for the Hospice Quality Reporting Program.  Specifically, CMS is seeking feedback on ways to attain health equity for all patients through policy solutions that apply to the Hospice Quality Reporting Program and other quality reporting programs.   
  • Home Health Quality Reporting Program.  CMS included changes to the Home Health Quality Reporting Program in the proposed rule because CMS indicated it needs to finalize certain changes by October 1, 2021 for public reporting to begin in January 2022.  The proposed Home Health Quality Reporting Program changes include using three quarters rather than four quarters of data for refreshes of certain OASIS-based measures and claims-based measures. 

CMS’s fact sheet for the SNF PPS proposed rule is available here, and the fact sheet for the hospice rule is available here.  The SNF PPS proposed rule is available here and the hospice proposed rule is available here.

Reporter, Isabella E. Wood, Atlanta, + 1 404 572 3527, iwood@kslaw.com.

Also in the News

King & Spalding Webinar – What to Expect From the DOJ in the Biden Administration

King & Spalding will host a webinar on April 27, 2021 from 1 p.m. to 2 p.m. ET.  This Life Sciences and Healthcare Roundtable webinar will explore President Biden’s policy priorities impacting the life sciences industry, such as:  the anticipated increase in collaboration between DOJ, HHS, and the FDA; principal enforcement tools – the False Claims Act, the Food, Drug & Cosmetic Act, and the Anti-Kickback Statute; fraud and abuse related to COVID-19; clinical trial fraud; investigations and enforcement related to the opioid crisis; protection of healthcare consumers, including focus on drug pricing; and scrutiny and enforcement of digital health tools and electronic health records.  You can register for the webinar here.