CMS Issues Prospective Payment System Proposed Rule

On April 27, 2021, the Centers for Medicare & Medicaid Services (CMS) issued the Inpatient Prospective Payment Systems (IPPS) for Acute Care Hospitals and the Long-Term Care Hospital (LTCH) Prospective Payment System (PPS) Proposed Rule for fiscal year (FY) 2022.

CMS updates payment rates for IPPS hospitals annually to account for changes in the prices of goods and services used by these hospitals in treating Medicare patients, as well as for other factors. CMS also updates LTCHs payment rates annually according to market rates based on LTCH-specific goods and services.

The proposed rule updates Medicare payment policies and rates for acute care hospitals and for certain hospitals and hospital units excluded from the IPPS. The rule also aims to close healthcare equity gaps and support greater access to services.

Some of the specific changes put forward in the proposed rule include but are not limited to:

• Extending the New Technology Add-on Payments for 14 technologies that otherwise would be discontinued in FY 2022.
• Extending the New COVID-19 Treatments Add-on Payment (NCTAP) for eligible products through the end of the fiscal year in which the COVID-19 public health emergency (PHE) ends.
• Decreasing uncompensated care payments for FY 2022 by approximately $660 million from FY 2021.
• Repealing the requirement that a hospital report on the Medicare cost report the median payer-specific negotiated charge that the hospital has negotiated with all of its MA organization payers, by MS-DRG, for cost reporting periods ending on or after January 1, 2021. CMS estimates that this will reduce administrative burden on hospitals by approximately 64,000 hours.
• Adopting five new measures, removing five existing measures, and making changes to the existing electronic health record (EHR) certification requirements in the Hospital Quality-Reporting Program, along with other administrative updates.
• Maintaining a continuous 90-day EHR reporting period for new and returning participants in the Medicare Promoting Interoperability Program for calendar years (CY) 2022 and 2023, and transitioning to a continuous 180-day EHR reporting period beginning in CY 2024 for all new and returning program participants.
• Establishing the Measure Suppression Policy in Response to COVID-19 PHE in certain value-based purchasing programs to ensure that these programs do not reward or penalize hospitals based on circumstances caused by the PHE for COVID-19 that the measures were not designed to accommodate.

To learn more about these and other proposed changes, review the proposed rule, this fact sheet and this press release.