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CMS issues proposed payment rules for inpatient rehab facilities, psychiatric care and hospice-based payments.

EDITOR’S NOTE: Stanley Nachimson, a former CMS career professional, now an IT consultant, is a popular panelist on Talk Ten Tuesdays.

Just this past week, the Centers for Medicare & Medicaid Services (CMS) began issuing the proposed payment rules for fiscal year (FY) 2023. CMS issued rules for inpatient rehabilitation facilities (CMS-1767-P), inpatient psychiatric facilities (CMS-1769-P), and hospice-based payments (CMS-1773-P).

For FY 2023, CMS proposes to update the IRF PPS payment rates by 2.8 percent based on the IRF market basket update of 3.2 percent less a 0.4 percentage point productivity adjustment.  CMS is also proposing a permanent 5percent cap on annual wage index decreases to smooth year-to-year changes in providers’ wage index payments.

A recent Office of Inspector General (OIG) report that evaluated early discharges from IRFs to home health (A-01-20-00501) recommended that CMS expand the IRF transfer payment policy to apply to early discharges to home health. To assist in balancing the needs of the patient while, at the same time, ensuring the integrity of the Medicare program, we are seeking feedback from stakeholders about potentially including home health in the IRF transfer payment policy, as recommended by OIG.

CMS proposes to expand the IRF qualify data reporting requirements, which currently apply to all admitted IRF patients with Medicare Part A fee-for-service (FFS) and Medicare Part C, to collecting data on all IRF patients, regardless of payer. This proposal would help to ensure all IRF patients are receiving the same quality of care and that provider metrics reflect performance across the spectrum of IRF patients. A proposed start is with the FY 2025 IRF QRP, meaning that providers would need to start collecting the assessment data on all patients receiving care in an IRF, regardless of payer, beginning on Oct. 1, 2023.

And, in continuing their health equity efforts, CMS is requesting feedback from stakeholders on the development and inclusion of health equity quality measures for the IRF QRP.

For FY 2023, CMS is proposing to update the Inpatient Psychiatric Facility PPS payment rates by 2.7 percent.  And, as above, to mitigate instability in IPF PPS payments due to significant wage index decreases that may affect providers in any given year, CMS is proposing for FY 2023 and subsequent years to apply a 5 percent cap on decreases in the IPF PPS wage index.

CMS is seeking comment, on what they should consider when advancing the use of measurement and stratification as tools to address healthcare disparities and advance healthcare equity.  Comments to the RFI will inform equity efforts both in behavioral health (mental health and substance use) by CMS as well as the Inpatient Psychiatric Facility Quality Reporting Program (IPFQRP).

Regarding the Medicare Hospice program, as proposed, hospices would see a 2.7 percent ($580 million) increase in their payments for FY 2023.  The hospice payment update includes a statutory cap that limits the overall payments per patient that is made to a hospice annually. The proposed cap amount for FY 2023 is $32,142.65 (FY 2022 cap amount of $31,297.61 increased by 2.7 percent).

This rule provides an update on the development of a patient assessment instrument, titled HOPE, which would contribute to a patient’s plan of care when adopted.  It also announces a potential future update to the CAHPS Hospice Survey, which is used to collect data on experiences of hospice care from primary caregivers of hospice patients. 

And, CMS is seeking information on our Health Equity Initiative within the Hospice Quality Reporting Program, seeking input on a potential future structural measure as well as responses to specific questions that would further inform future efforts.


Stanley Nachimson, MS

Stanley Nachimson, MS is principal of Nachimson Advisors, a health IT consulting firm dedicated to finding innovative uses for health information technology and encouraging its adoption. The firm serves a number of clients, including WEDI, EHNAC, the Cooperative Exchange, the Association of American Medical Colleges, and No World Borders. Stanley is focusing on assisting health care providers and plans with their ICD-10 implementation and is the director of the NCHICA-WEDI Timeline Initiative. He serves on the Board of Advisors for QualEDIx Corporation. Stanley served for over 30 years in the US Department of Health and Human Services in a variety of statistical, management, and health technology positions. His last ten years prior to his 2007 retirement were spent in developing HIPAA policy, regulations, and implementation planning and monitoring, beginning CMS’s work on Personal Health Records and serving as the CMS liaison with several industry organizations, including WEDI and HITSP. He brings a wealth of experience and information regarding the use of standards and technology in the health care industry.

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