Health Headlines – July 31, 2023

CMS Issues FY 2024 Final Rule Updating Medicare Payment and Policies for Inpatient Rehabilitation Facilities - On July 27, 2023, CMS issued a final rule updating Medicare payments and policies under the Inpatient Rehabilitation Facility (IRF) Prospective Payment System and the IRF Quality Reporting Program for FY 2024 (Final IRF Rule). The updates are expected to result in approximately $355 million in increased payments from the federal government to IRFs during FY 2024, and an estimated increase in costs to IRFs of $31,412.56 beginning with the FY 2025 IRF Quality Reporting Program.

Under the Final IRF Rule, the IRF Prospective Payment System rates will increase by 3.4%, which is based on an IRF market basket update of 3.6% minus a 0.2% productivity adjustment. The Final IRF Rule also adjusts the outlier threshold to maintain outlier payments at 3% of total payments, which will increase IRF payments by 4% percent (about $355 million) for FY 2024 as compared with payments in FY 2023.

CMS has also rebased and revised the IRF market basket, adopting an IRF market basket based in 2021 instead of the 2016-based IRF market basket previously used in the FY 2020 IRF PPS rule. This takes recent inflation into account.

The Final IRF Rule also will allow hospitals to open new IRF units and obtain payment under the IRF Prospective Payment System at any time during the cost reporting period, instead of being required to wait until the start of the next cost reporting period, so long as 30-days advance notice is given to the appropriate CMS regional office and Medicare Administrative Contractor before the date of the change. An identical proposal, which modifies the excluded hospital unit regulation, was also raised in the FY 2024 Inpatient Psychiatric Facility (IPF) PPS Proposed rule and is being finalized in the IPF PPS Final Rule.

Under the IRF Quality Reporting Program, IRFs are required to report standardized patient assessment data about quality measures to CMS in order to avoid penalty of a 2% reduction to their annual payment rate. The Final IRF Rule contains certain updates to IRF Quality Reporting Program measures including:

• Adoption of the Discharge Function Score Measure – The Discharge Function Score measure will assess functional status by assessing the percentage of IRF patients who meet or exceed an expected discharge function score, using mobility and self-care items collected on the IRF Patient Assessment Instrument. The measure will take effect beginning with the 2025 Quality Reporting Program and will replace the Application of Percent of Long-Term Care Hospital Patients with an Admission and Discharge Functional Assessment and a Care Plan measure. CMS has also finalized accompanying public reporting policies.
• Adoption of the COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date Measure – This measure reports the percentage of IRF patients that are up to date with recommended COVID-19 vaccines in accordance with the CDC’s most recent guidance. This measure will take effect beginning with the 2026 IRF Quality Reporting Program. CMS has also finalized accompanying public reporting policies.
• Modification of the COVID-19 Vaccination Coverage among Healthcare Personnel (HCP COVID-19 Vaccine) Measure– This measure tracks the percentage of healthcare personnel in IRFs who are up to date with the recommended COVID-19 vaccines in accordance with the CDC’s most recent guidance. This marks a change from the prior version of this measure, which focused only on tracking healthcare personnel who received the primary COVID-19 vaccination series. This measure will begin with the 2025 IRF Quality Reporting Program.
• Removal of three measures: (1) the Application of Functional Assessment/Care Plan Measure, (2) the IRF Functional Outcome Measure: Change in Self-Care Score for Medical Rehabilitation Patients Measure and (3) the IRF Functional Outcome Measure: Change in Mobility Score for Medical Rehabilitation Patients Measure – The Final IRF Rule will remove the first measure because measure performance among IRFs is so high and unvarying that meaningful distinctions in improvements can no longer be made, and the final Discharge Function Measure is more associated with positive patient outcomes. The second and third measures are being removed because the costs associated with these measures outweigh the benefits of their use in the IRF Quality Reporting Program and are similar to other existing measures within the IRF Quality Reporting Program.

• Begin the public reporting of the Transfer of Health Information to the Provider—PAC Measure and the Transfer of Health Information to the Patient—PAC Measure beginning with the September 2024 Care Compare refresh or as soon as possible – These measures report the percentage of IRF patients with a discharge assessment indicating that a current reconciled medication list was provided to the subsequent provider, to patients, or to their families or caregivers at discharge or transfer.

The Final IRF Rule can be read in full here, and the Fact Sheet for the Final IRF Rule can be found here.

Reporter, Will Mavity, Los Angeles, +1 213 218 4043, wmavity@kslaw.com.

CMS Releases FY 2024 Medicare Inpatient Psychiatric Facility Prospective Payment System and Quality Reporting Final Rule – On July 27, 2023, CMS issued a final rule (Final Rule) which revises Medicare policies and rates for the Inpatient Psychiatric Facility (IPF) Prospective Payment System (PPS) for the 2024 fiscal year (FY 2024). Among other things, the Final Rule provides for an increase in IPF PPS rates, adds new flexibility for hospitals to open excluded units, and modifies quality-reporting measures. Set forth below is a high-level summary of certain significant changes in the Final Rule.

• Rate Updates. IPF PPS rates are increasing by 3.3% for FY 2024, calculated based on a 3.5% market based update reduced by a 0.2% productivity adjustment. CMS estimates total payments under the IPF PPS will be $70 million, representing a 2.3% increase relative to FY 2023. The outlier threshold will increase from $24,630 to $34,750, which the Final Rule indicates will allow outlier estimated payments to remain at 2% of total IPF payments.
• Excluded Units. The regulations at 42 C.F.R. § 412.25(c) are amended for FY 2024 to allow hospitals to open a new excluded IPF unit (which will be reimbursed under the IPF PPS) at any time during their cost-reporting period, rather than only at the beginning of the period. This will require 30 days’ notice to the applicable CMS regional office and Medicare Administrative Contractor (MAC). The Fact Sheet states that this is intended to increase the availability of IPF beds in response to increasing behavioral health needs.
• Quality Reporting. The Final Rule also makes certain changes to the measures for the Inpatient Psychiatric Facility Quality Reporting (IPFQR) Program:
• The new “Facility Commitment to Health Equity” measure will require IPFs to attest to certain efforts to address health equity, beginning with reporting of CY 2024 data for the FY 2026 payment determination.
• The new “Screening for Social Drivers of Health (SDOH)” measure requires IPFs to report the percentage of adult patients who are screened for five health-related social needs (HRSNs): (i) food insecurity, (ii) housing instability, (iii) transportation needs, (iv) utility difficulties, and (v) interpersonal safety. This measure will be voluntary for CY 2024 and will become mandatory for CY 2025.
• The new “Screen Positive Rate for SDOH” measure requires IPFs to report the percentage of patients screened under the SDOH screening measure described above who screen positive for each of the five HRSNs. This measure will be voluntary for CY 2024 and will become mandatory for CY 2025.
• The new “Psychiatric Inpatient Experience (PIZ)” measure requires IPFs to report scores for certain domains (relationship with treatment team, nursing presence, treatment effectiveness, and healing environment) based on patient responses to a 23-item survey administered 24 hours prior to discharge. This measure will be voluntary for CY 2025 and will become mandatory for CY 2026.
• The existing “COVID-19 Vaccination Coverage Among Healthcare Personnel” measure is modified beginning in the fourth quarter of CY 2023 to require IPFs to report the cumulative number of healthcare personnel who are up-to-date with recommended COVID-19 vaccinations. Currently, this measure only requires reporting for the primary vaccination series.
• The “Patients Discharged on Multiple Antipsychotic Medications with Appropriate Justification (HBIPS-5)” and “Tobacco Use Brief Intervention Provided or Offered and Tobacco Use Brief Intervention Provided (TOB-2/2a)” measures are being removed beginning with the FY 2025 payment determination.
• Other. The Final Rule also codifies certain procedural aspects of the IPFQR Program and provides for adoption of a data validation pilot program beginning with CY 2025 data.

The Final Rule is available here. The Fact Sheet issued by CMS in connection with the Final Rule is available here.

Reporter, J. Gardner Armsby, Atlanta, +1 404 572 2760, garmsby@kslaw.com.

HHS, the Department of Labor, and the Department of the Treasury Release Proposed Rules and a Report to Congress regarding Mental Health Parity – On July 25, 2023, HHS, the Department of Labor, and the Department of the Treasury (the Departments) issued proposed rules (Proposed Rules) and other information regarding health plan and issuer compliance with mental health parity requirements.  These releases suggest an increasing focus on mental health parity. 

Background

The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Act (MHPAEA) was enacted in 2008 and generally requires that plans and issuers offering group or individual health insurance coverage ensure that any financial requirements (such as coinsurance or copays) and treatment limitations (such as visit limits) that apply to mental health and substance use disorder benefits are no more restrictive than predominant financial requirements or treatment limitations that apply to substantially all medical/surgical benefits in a benefit classification.  In addition, MHPAEA prohibits separate limitations that would only apply to mental health and substance use disorder benefits.  When MHPAEA was amended by the Consolidated Appropriations Act of 2021, a provision was added that requires plans and issuers to perform and document comparative analyses of the design and application of their non-qualitative treatment limitations (NQTLs) to demonstrate parity and provide those analysis to the Departments or to an applicable state authority upon request.  NQTLs generally are plan provisions that impose non-numerical limits on the scope or duration of benefits (such as prior authorization requirements, step therapy, and provider reimbursement rates).

Proposed Rules and Technical Release

The Proposed Rules contain various proposal intended to better protect individuals seeking mental health and substance use disorder benefits and to provide clear guidance to plans and issuers on how to comply with MHPAEA requirements.  The Department of Labor’s press release states that the Departments drew from their combined and individual experiences in enforcing MHPAEA and in working with plans and issuers, as well as state regulators.  Among other things, the Proposed Rules would:

• Amend the existing NQTL standard to prevent plans and issuers from using NQTLs to place greater limits on access to mental health and substance use disorder benefits as compared to medical/surgical benefits;
• Require plans and issuers to collect and evaluate relevant data in a manner reasonably designed to assess the impact of NQTLs on access to mental health and substance use disorder benefits and medical/surgical benefits;
• Set forth a special rule with regard to network composition;
• Amend existing examples and add new examples on the application of the rules for NQTLs to clarify and illustrate the protections of MHPAEA;
• Set forth the content requirements for NQTL comparative analyses and specify how plans and issuers must make these comparative analyses available to the Departments, as well as to an applicable State authority, and participants, beneficiaries, and enrollees; and
• Implement the sunset provision for self-funded, non-federal governmental plan elections to opt out of compliance with MHPAEA. 

Also, on July 25, 2023, the Departments issued Technical Release 2003-01P (Technical Release) requesting comments to inform guidance for proposed data collection and evaluation requirements for NQTLs related to network composition and requesting input on the development of an enforcement safe harbor for plans and issuers that submit data indicating that their networks of mental health and substance use disorder providers are comparable to networks for medical/surgical providers.  The Technical Release states that the Departments are particularly concerned about how NQTLs related to network composition affect access to mental health and substance use disorder benefits.

Congressional Report and Fact Sheet

The Departments concurrently released the Second MHPAEA Comparative Analysis Report to Congress (the Report), which is a report required by federal law.  The Report includes information on continued enforcement efforts related to NQTLs and the comparative analyses that plans and issuers must provide upon request to show compliance with parity requirements.  The Report identifies specific plans and issuers that failed to comply with the applicable requirements of MHPAEA. Of note, the Report indicates that none of the comparative analyses submitted by plans or issuers during the reporting period were initially sufficient to satisfy legal requirements.  The Report also notes that many initial responders seemed unprepared to submit their comparative analyses upon request and some plans did not complete or start a comparative analysis until after one was requested. 

The Department of Labor and CMS also issued a joint fact sheet (Fact Sheet) on MHPAEA with results for cases closed in Fiscal Year 2022.  In the Fact Sheet, the Department of Labor and CMS indicate, that during Fiscal Year 2022, the agencies significantly increased their NQTL enforcement activity in response to requirements imposed on plans and issuers by the Consolidated Appropriations Act of 2021. 

The Press Release from the Department of Labor is available here.  The Proposed Rules are available here.  The Technical Release is available here.  The Report to Congress is available here.  The enforcement joint fact sheet is available here.

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