Legal, Hospitals, Payers

CMS repeals MA rate disclosure requirement, boosts hospital payments by $2.3B

CMS has finalized its 2022 inpatient payment rule, which will not only repeal part of the price transparency requirements related to Medicare Advantage rates and increase payments to hospitals but will also require facilities to report Covid-19 vaccination uptake among its employees.

The newly finalized inpatient payment rule for 2022 will rescind part of the price transparency requirements that went into effect on Jan. 1, increase payments by billions and require facilities to report Covid-19 vaccination coverage among its workers.

On Monday, the Centers for Medicare & Medicaid Services finalized its fiscal year 2022 Medicare Hospital Inpatient Prospective Payment System rule, which will take effect Oct. 1.

The final rule will implement several new provisions, including revoking the requirement that hospitals report the median payer-specific negotiated charges for all Medicare Advantage insurers on their Medicare cost reports. This provision is retroactive to Jan. 1.

Providers cheered the move. The policy requiring hospitals to share the rates negotiated with Medicare Advantage was adopted to better align fee-for-service Medicare payments with market rates, said Stacey Hughes, executive vice president of the American Hospital Association, in a statement posted online.

“However, privately negotiated rates take into account a number of unique circumstances between a private payer and a hospital and are not an appropriate benchmark for fee-for-service Medicare payments,” she said.

The final rule will also increase payments to hospitals. General acute care hospitals that successfully participate in the Hospital Inpatient Quality Reporting Program and are meaningful EHR users will receive a 2.5% reimbursement boost. After accounting for a projected decrease in Medicare disproportionate share hospital payments and uncompensated care of $1.4 billion, CMS expects hospital payments will increase by $2.3 billion.

This is slightly less than the $2.5 billion pay bump predicted in the proposed version of the rule released in April.

Further, CMS finalized its proposal that hospitals will receive new technology add-on payments for eligible Covid-19 products through the end of the fiscal year in which the public health emergency is declared over. Not only is CMS continuing the add-on payments for all 23 of the technologies currently receiving it, but it has approved 19 new technologies for the payments.

CMS estimates that Medicare spending on new technology add-on payments in 2022 will be around $1.5 billion, a 77% jump from 2021 spending.

Another major change being finalized is the addition of new measures to the Hospital Inpatient Quality-Reporting Program, a pay-for-reporting quality program. CMS has added the new Maternal Morbidity Structural Measure, which will assess hospital participation in a statewide or national perinatal quality improvement initiative as well as the implementation of safety practices or bundles.

The agency is also adding the Covid-19 Vaccination Coverage Among Health Care Personnel measure. Hospitals participating in the IQR program will be required to report vaccination coverage among their workers to the Centers for Disease Control and Prevention’s National Healthcare Safety Network web-based surveillance system.

Hospitals and health systems around the country are mandating that their employees receive the Covid-19 vaccine, leading to protests and lawsuits.

With the addition of this measure in the final rule, CMS has thrown its support behind making the vaccination mandatory, and the American Hospital Association is on the same page.

“While CMS’s new quality measure on the rate of healthcare personnel Covid-19 vaccination likely needs further refinement to ensure it accurately reflects hospitals’ progress in vaccinating their workforce, we will work with CMS, CDC and hospitals to facilitate the reporting of the measure starting on October 1,” said the association’s EVP Hughes.

To read the full final rule, click here.

Photo: champc, Getty Images