The Centers for Medicare & Medicare Services on Tuesday unveiled a sweeping proposed rule that would nullify the mandated public disclosure of negotiated rates between payers and providers and increase by 2.8% Medicare’s inpatient prospective payment in fiscal year 2022.
“The rule’s provisions seek to sustain hospital readiness to respond to future public health threats, enhance the health care workforce in rural and underserved communities, and revise scoring, payment and public quality data reporting methods to lessen the adverse impacts of the pandemic and future unplanned events,” CMS said in a media release, adding that the proposed repeal of “collection of market-based rate information on the Medicare cost report and the market-based MS-DRG relative weight methodology… will avoid imposing additional unnecessary burden on hospitals.”
“Based on our initial review, we are very pleased CMS is proposing to repeal the requirement that hospitals and health systems disclose privately negotiated contract terms with payers on the Medicare cost report,” Tom Nickels, executive vice president of the American Hospital Association said in a media release.
“We have long said that privately negotiated rates take into account any number of unique circumstances between a private payer and a hospital and their disclosure will not further CMS’s goal of paying market rates that reflect the cost of delivering care,” he said. “We once again urge the agency to focus on transparency efforts that help patients access their specific financial information based on their coverage and care.”
CMS said the IPPS 2.8% net rate increase would apply to hospitals “that successfully participate in the Hospital Inpatient Quality Reporting (IQR) Program and are meaningful electronic health record (EHR) users.”
“This reflects the projected hospital market basket update of 2.5% reduced by a 0.2 percentage point productivity adjustment and increased by a 0.5 percentage point adjustment required by legislation,” CMS said.
With the aim of bolstering the nation’s badly understaffed healthcare workforce in rural and underserved areas, the proposed rule also would distribute 1,000 new physician residency slots over five years to hospitals in healthcare deserts, phasing in 200 slots per year over five years, at a Medicare-funded cost of about $300 million a year.
“Hospitals are often the backbone of rural communities – but the COVID-19 pandemic has hit rural hospitals hard, and too many are struggling to stay afloat,” Health and Human Services Secretary Xavier Becerra said in a media release. “This rule will give hospitals more relief and additional tools to care for COVID-19 patients and it will also bolster the healthcare workforce in rural and underserved communities.”
Nickels said the additional slots will “help ease current physician shortages and bolster the foundation of our healthcare system.”
CMS said it also wants to hear suggestions from stakeholders about policy changes that could facilitate healthcare equity.
“This includes enhancing hospital-specific reports that stratify measure results by Medicare/Medicaid dual eligibility and other social risk factors, ways to improve demographic data collection, and the potential creation of a hospital equity score to synthesize results across multiple measures and social risk factors,” CMS said.
The proposed rule also would: extend new COVID-19 treatments and add-on payments through the end of the fiscal year, when the public health emergency is supposed to end; “suppress” most hospital value-based purchasing metrics, resulting in neutral payment adjustments for hospitals; exclude 2020 pandemic-tainted data when measuring hospital-acquired conditions in fiscal years 2022 and 2023; discount pneumonia readmissions to FY 2023 hospital readmission penalties, and exclude COVID-19 patients from the other five readmissions measures.
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