An Analysis and Commentary on Federal Health Care Issues by Larry Goldberg

Final FY 2022 Medicare IPPS and LTCH PPS Update Released Update 

The Centers for Medicare and Medicaid Services (CMS) have released the final rule to update both the Hospital Inpatient Prospective Payment System (IPPS) and the Long-Term Care Hospital (LTCH) Prospective Payment System for fiscal year (FY) 2022. In addition to payment rate updates, the rule addresses many other items. 

CMS is continuing its policies to address wage index disparities impacting low wage index hospitals. CMS is finalizing implementation of Section 9831 of the American Rescue Plan Act of 2021, which permanently established an imputed floor wage index policy. In addition, CMS is finalizing the regulations, which allows hospitals with a rural redesignation under the Act to reclassify through the Medicare Geographic Classification Review Board (MGCRB) using the rural reclassified area as the geographic area in which the hospital is located. 

The rule includes policies related to new technology add-on payments. CMS is also finalizing its proposal to repeal the collection of market-based rate information on the Medicare cost report and the market-based MS-DRG relative weight methodology. 

CMS is providing estimated and newly established performance standards for the Hospital Value-Based Purchasing (VBP) Program, and updated policies for the Hospital Readmissions Reduction Program, Hospital Inpatient Quality Reporting (IQR) Program, Hospital VBP Program, Hospital-Acquired Condition (HAC) Reduction Program, Long-Term Care Hospital Quality Reporting Program (LTCH QRP), and the PPS Exempt Cancer Hospital Reporting (PCHQR) Program. 

CMS is establishing new requirements and revising existing requirements for eligible hospitals and CAHs participating in the Medicare Promoting Interoperability Program. 

Additionally, due to the impact of the COVID-19 PHE on measure data used in the value-based purchasing programs, CMS is finalizing its proposal to suppress several measures in the Hospital VBP, HAC Reduction, and Hospital Readmissions Reduction Programs. As a result of these measure suppressions for the Hospital VBP Program CMS is also implementing a special scoring methodology for FY 2022 that results in a value-based incentive payment amount that matches the 2.0 percent reduction to the base operating DRG payment amount.

The document is currently on public display at the Federal Register office and is scheduled for publication on August 13. A display version is available at: https://public-inspection.federalregister.gov/2021-16519.pdf. 

The IPPS tables for this FY 2022 final rule are available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. Click on the link on the left side of the screen titled, “FY 2022 IPPS Final rule Home Page” or “Acute Inpatient—Files for Download.” 

The LTCH PPS tables for this FY 2022 final rule are available at: 
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/LongTermCareHospitalPPS/index.html under the list item for Regulation Number CMS-1752-F.

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