This week in Medicare updates—4/27/2022

2023 Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital (LTCH) PPS Proposed Rule 

On April 18, CMS published a draft copy of the CY 2023 IPPS Proposed Rule, which is scheduled to be published in the Federal Register on May 10. CMS projects an increase in operating payment rates by 3.2% based on a projected hospital market basket update of 3.1% reduced by a 0.4% productivity adjustment and increased by a 0.5% statutory adjustment. 

For the past two years, CMS has used pre-pandemic data for rate-setting due to the impact the COVID-19 PHE may have had on 2020 and 2021 data. However, CMS said it is proposing to return to using the most recent available data (including the FY 2021 MedPAR claims and the FY 2020 cost reports) for FY 2023 rate-setting with some modifications to account for any impact COVID-19 may have had. This includes calculating two sets of relative weights–one including COVID-19 claims and one excluding COVID-19 claims–and averaging those out to determine FY 2023 relative weight values. A full accounting of additional modifications CMS would make for rate-setting is discussed in the rule. 

Other policies proposed in the rule include: 

• CMS is not proposing any new MS-DRGs for FY 2023 but is discussing a request to reclassify laser interstitial thermal therapy (LITT) procedures under the MS-DRGs in connection with a request to create new procedure codes to describe LITT. 
• Due to certain statutory language and a recent federal court ruling (Milton S. Hershey Medical Center v. Becerra), CMS is proposing to modify policies for teaching hospitals as well as for certain providers and cost years to address situations for applying the FTE cap when a hospital’s weighted FTE count is greater than its FTE cap. 
• As it has in other proposed payment system rules for FY 2023, CMS is proposing to apply a 5% cap on any decrease to a hospital’s wage index from its wage index the prior FY. 
• CMS proposed 1,495 changes to the ICD-10-CM code set, including 1,179 new codes, 28 revised codes, and 228 deleted codes. Many of these changes apply to codes for head injuries, external causes of morbidity codes, and dementia-related diagnoses codes.  

The rule also contains a variety of quality reporting program changes and several changes to policies regarding maternal health. CMS is specifically requesting comments on how reporting social determinants of health diagnosis codes can improve CMS’ ability to recognize severity of illness, complexity of service, and/or utilization of resources under MS-DRGs. It is also seeking comments on the impact of climate change on health and on ways CMS can address health care quality disparities.

CMS published a Press Release and Fact Sheet on the rule overall and a Fact Sheet on the Maternal Health Policies on the same date. Comments are due by June 17.

2022 National COVID-19 Health Care Fraud Enforcement Action

On April 20, the OIG–in conjunction with the DOJ–published a Notice announcing nationwide coordinated law enforcement actions to combat health care-related COVID-19 fraud. The action resulted in charges against 21 defendants across nine federal districts and resulted in over $149 million in false billings. Schemes involved fraudulent COVID-19 testing, billing for sham telemedicine encounters, misappropriation of Provider Relief Fund monies, and more.

HHS Releases New Data and Report on Hospital and Nursing Home Ownership

On April 20, CMS published a Press Release to announce that it is releasing data for the first time on mergers, acquisitions, consolidations, and changes of ownership from 2016-2022 for hospitals and nursing homes enrolled in Medicare. CMS said this data is intended to increase transparency and provide insight for stakeholders on how the ownership of health care providers impacts costs and outcomes for consumers.

CMS Outlines Strategy to Advance Health Equity, Challenges Industry Leaders to Address Systemic Inequities

On April 20, CMS published a Press Release announcing its action plan to address health equity across HHS. As part of this initiative, CMS will be encouraging health care leaders to make commitments to advance health equity in a variety of ways outlined in the press release. CMS also published its Strategic Plan for this initiative on the same date.