IPPS Final Rule Puts Dent into Provider Burden of Price Transparency Requirements

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Original story posted on: August 3, 2021

Through the annual announcement, CMS said it is also turning its focus to “sustainability and readiness.”

Federal officials hope that the Inpatient Prospective Payment System (IPPS) Final Rule issued Monday will provide a regulatory framework allowing the U.S. healthcare system to more evenly navigate through future public health emergencies (PHEs) reminiscent of the ongoing COVID-19 pandemic.

But in the shorter term, a key provision of the Rule will have significant ramifications for providers rushing to achieve compliance with the recently enacted Centers for Medicare & Medicaid Services (CMS) price transparency requirements.

The Final Rule includes a wholesale repeal of the requirement that hospitals list on their Medicare cost reports the median payer-specific negotiated charges agreed upon with all of their Medicare Advantage (MA) entities, sorted by MS-DRG, for cost reporting periods ending on or after Jan. 1, 2021.

“Had hospitals been required to comply with this requirement, it would have resulted in approximately 64,000 hours of administrative burden,” CMS noted in a fact sheet about the Final Rule (in an excerpt appearing about halfway through the document). “We are also finalizing our proposal to repeal the market-based MS-DRG relative weight methodology that was adopted effective for FY 2024, and to continue using the existing cost-based MS-DRG relative weight methodology to set Medicare payment rates for inpatient stays for FY 2024 and subsequent fiscal years.”

The news was described as helpful, but not extraordinarily so.

“The CMS Price Transparency Final Rule for 2021 by itself has put a significant burden on hospitals to comply, as evidenced by the fact that many hospitals were late in publishing their machine-readable files (MRFs) and consumer displays – and that approximately half have still not been able to comply. This is exacerbated by the new Surprise Billing rule requirements,” Panacea Healthcare Solutions CEO Frederick Stodolak told RACmonitor. “This repeal of the requirement for hospitals to report the median negotiated Medicare Advantage charge provides some relief, but does not repeal the more heavy lift that providers still post in their machine-readable file each payer Medicare Advantage negotiated charge – and include such rates in their calculations of the de-identified minimum and maximum negotiated rates.”

Hospitals that haven’t yet grouped rates by MS-DRG in their MRFs are the real winners here, Stodolak explained – that work is now unnecessary. But the real heavy lifting was creating the MRFs themselves. 

As anticipated, the IPPS Final Rule also authorizes additional payments for diagnostics and therapies intended to treat COVID-19 during the current PHE and beyond, while revising payment and other policies under certain quality and value-based purchasing programs for hospitals to “lessen the adverse impacts of the pandemic,” CMS said in a press release. Some of those changes will also incentivize the meaningful use of certified electronic health record (EHR) technology they expect will “help public health officials monitor for future unplanned events.”

“How Medicare pays for hospital care and evaluates quality are integral pieces of achieving and addressing gaps in health equity and strengthening our healthcare system for a more sustainable future; CMS is moving forward to incorporate what we have learned from the COVID-19 pandemic in order to improve quality and increase transparency so that patients are positioned to make informed decisions about their care,” CMS Administrator Chiquita Brooks-LaSure said in a statement. “With this final rule, we are further improving how we measure and evaluate data while investing in quality care for people that rely on Medicare for coverage.”

The IPPS Final Rule comes on the heels of CMS announcements regarding new payment rules for skilled nursing facilities (SNFs), inpatient rehabilitation facilities (IRFs), inpatient psychiatric facilities (IPFs), and hospices.

CMS also noted that it intends the IPPS Final Rule to advance the notion of health equity through the quality reporting measurement, having “solicited feedback on opportunities to leverage diverse data sets such as race, ethnicity, Medicare/Medicaid dual eligible status, disability status, LGBTQ+, and socioeconomic status.” The agency reported receiving more than 200 comments, reflecting what it labeled the importance stakeholders place on the notion. 

“Standardization of equity data to improve hospital data collection is just one more way CMS will lead the national conversation on improving health equity,” Brooks-LaSure said. “CMS will use these comments and innovate on quality measures to help identify health equity data. We’re also measuring hospital initiatives to improve maternal health outcomes as we work to reduce disparities in maternal morbidity.”

To that end, CMS noted that it is adding a Maternal Morbidity measure to the hospital quality reporting program that would require hospitals to report whether they participate in statewide or national efforts to improve perinatal health.

“Many of the factors contributing to maternal morbidity are preventable, and differentially impact women of color,” officials explained. “This measure is an important initial step toward implementation of patient safety practices to reduce maternal morbidity, and in turn, maternal mortality.”

Building off the New COVID-19 Treatments Add-on Payment (NCTAP) introduced last fall to encourage hospitals to provide new COVID-19 treatments during the PHE, CMS additionally said it is finalizing its proposal to extend the NCTAP for certain eligible technologies through the end of the fiscal year in which the PHE ends, to “continue to encourage these new treatments and to minimize any potential payment disruption immediately following the end of the PHE.”

Lastly, CMS noted that its intention to enhance early warning surveillance, case surveillance, and vaccine uptake increases information being made available to the public.

“CMS continues its ongoing response to the PHE and future health threats by promoting the meaningful use of certified EHR IT to report data that supports public health efforts,” the agency said in its press release. “Specifically, CMS is modifying the Promoting Interoperability Program for eligible hospitals and critical access hospitals (CAHs) to expand required reporting within the Public Health and Clinical Data Exchange Objective.”

The Final Rule requires hospitals to attest they are in active engagement with a public health agency to submit data for measures related to nationwide surveillance for early warning of emerging outbreaks and threats; automated case and laboratory reporting for rapid public health response; and visibility on immunization coverage so public health agencies can tailor vaccine distribution strategies.

To view a fact sheet on the IPPS Final Rule, go online to https://www.cms.gov/newsroom/fact-sheets/fiscal-year-fy-2022-medicare-hospital-inpatient-prospective-payment-system-ipps-and-long-term-care-0

To review the Final Rule in its entirety, access it in the Federal Register here: https://www.federalregister.gov/public-inspection/2021-16519/medicare-program-hospital-inpatient-prospective-payment-systems-for-acute-care-hospitals-and-the

EDITOR’S NOTE: The ICD10monitor annual IPPSpalooza is here. It’s a 10-week period that starts when the Inpatient Prospective Payment System final rule is released and continues through October 1st – when the regulations, including the ICD-10 codes, are effective. Talk Ten Tuesdays and the ICD10monitor editorial board will be focusing on relevant information leading up to the release of the new ICD-10 codes and will provide not only the news but in-depth analyses of all IPPS related regulations.

Mark Spivey

Mark Spivey is a national correspondent for ICDmonitor.com who has been writing on numerous topics facing the nation’s healthcare system (and federal oversight of it) for five years.

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