FY 2023 Hospital Inpatient Prospective Payment System (IPPS) and Long Term Care Hospitals (LTCH PPS) Proposed Rule - CMS-1771-P
On April 18, 2022, the Centers for Medicare & Medicaid Services (CMS) issued the fiscal year (FY) 2023 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long‑Term Care Hospital (LTCH) Prospective Payment System (PPS) proposed rule.
The proposed rule would update Medicare fee-for-service payment rates and policies for inpatient hospitals and LTCHs for fiscal year (FY) 2023. CMS is publishing this proposed rule to meet the legal requirements to update Medicare payment policies for IPPS hospitals and LTCHs on an annual basis. This fact sheet discusses major provisions of the proposed rule, which can be downloaded from the Federal Register at: https://www.federalregister.gov/public-inspection/current
The proposed policies in the IPPS and LTCH PPS rule also build on key priorities to better measure health care quality disparities and to improve the safety and quality of maternity care.
CMS proposes to establish new requirements and revise existing requirements for eligible hospitals and critical access hospitals (CAHs) participating in the Medicare Promoting Interoperability Program. In addition, we are providing estimated and newly established performance standards for the Hospital Value-Based Purchasing (VBP) Program and proposing updated policies for the Hospital Readmissions Reduction Program, Hospital Inpatient Quality Reporting (IQR) Program, Hospital VBP Program, Hospital-Acquired Condition (HAC) Reduction Program, PPS-Exempt Cancer Hospital Reporting Program, and Long-Term Care Hospital Quality Reporting Program. Additionally, due to the impact of the COVID-19 PHE on measure data, we are proposing to suppress several measures in the Hospital VBP and HAC Reduction Programs. In addition to these measure suppressions for the Hospital VBP Program, we are proposing to implement a special scoring methodology for FY 2023 that results in each hospital receiving a value-based incentive payment amount that matches their 2 percent reduction to the base operating DRG payment amount. Similarly, we are also proposing to suppress all six measures in the HAC Reduction Program for the FY 2023 program year. If finalized as proposed, for the FY 2023 program year, hospitals participating in the HAC Reduction Program will not be given a measure score, a Total HAC score, nor will hospitals receive a payment penalty.
Consistent with Executive Order 13985 on Advancing Racial Equity and Support for Underserved Communities through the Federal Government, CMS is seeking stakeholder feedback on ways to advance health equity. Specifically, CMS is seeking comment on key considerations to inform our approach to improve data collection to better measure and analyze disparities across our programs and policies, and approaches for updating the Hospital Readmissions Reduction Program to encourage providers to improve performance for socially at-risk populations.
CMS also proposes to continue policies finalized in the FY 2020 IPPS/LTCH PPS final rule to address wage index disparities affecting low wage index hospitals and also proposes to limit year-to-year decreases in hospitals’ wage indexes. Additionally, this proposed rule includes a proposal to establish a new supplemental payment for Indian Health Service (IHS)/Tribal hospitals and hospitals located in Puerto Rico, recognizing that our proposal to discontinue the use of the low-income insured days proxy to calculate uncompensated care payments for these hospitals could result in significant financial disruption.
This proposed rule also includes proposed changes to graduate medical education (GME) policies, including a proposal to increase flexibility to rural hospitals that participate in a rural track program (RTP). In addition, this proposed rule includes a proposal regarding the treatment of Medicaid section 1115 demonstration days in the Medicaid fraction that is used in the calculation of Medicare disproportionate share hospital (DSH) payments.
This rule also includes proposed revisions to the hospital and critical access hospital (CAH) conditions of participation (CoPs) for infection prevention and control and antibiotic stewardship programs. These proposed revisions would require hospitals and CAHs, after the conclusion of the current COVID-19 public health emergency (PHE), to continue COVID-19 and seasonal influenza reporting, and would establish new reporting requirements for future declared public health emergencies related to a specific infectious disease or pathogen.
Background on the IPPS and LTCH PPS
CMS pays acute care hospitals (with a few exceptions specified in the law) for inpatient stays under the IPPS. LTCHs are paid under the LTCH PPS. Under these two payment systems, CMS sets base payment rates prospectively for inpatient stays based on the patient’s diagnoses and any services performed. Subject to certain adjustments, a hospital receives a single payment for the case based on the payment classification assigned at discharge. The classification systems are: IPPS: Medicare Severity Diagnosis-Related Groups (MS-DRGs) and LTCH PPS: Medicare Severity Long-Term Care Diagnosis-Related Groups (MS-LTC-DRGs).
The law requires CMS to update payment rates for IPPS hospitals annually and to account for changes in the prices of goods and services used by these hospitals in treating Medicare patients, as well as for other factors. This is known as the hospital “market basket.” The IPPS pays hospitals for services provided to Medicare beneficiaries using a national base payment rate, adjusted for a number of factors that affect hospitals’ costs, including the patient’s condition and the cost of hospital labor in the hospital’s geographic area. CMS updates LTCHs’ payment rates annually according to a separate market basket based on LTCH-specific goods and services.
Proposed Changes to Payment Rates under IPPS
The proposed increase in operating payment rates for general acute care hospitals paid under the IPPS that successfully participate in the Hospital Inpatient Quality Reporting (IQR) Program and are meaningful electronic health record (EHR) users is projected to be 3.2%. This reflects a FY 2023 projected hospital market basket update of 3.1% reduced by a projected 0.4 percentage point productivity adjustment and increased by a 0.5 percentage point adjustment required by statute.
Hospitals may be subject to other payment adjustments under the IPPS, including:
- Payment reductions for excess readmissions under the Hospital Readmissions Reduction Program;
- Payment reduction (1 percent) for the worst-performing quartile under the Hospital-Acquired Condition Reduction Program;
- Upward and downward adjustments under the Hospital Value-Based Purchasing Program.
The proposed increase in operating and capital IPPS payment rates, partially offset by decreases in outlier payments for extraordinarily costly cases, will generally increase hospital payments in FY 2023 by $1.6 billion. In addition, CMS projects Medicare disproportionate share hospital (DSH) payments and Medicare uncompensated care payments combined will decrease in FY 2023 by approximately $0.8 billion. Subject to determinations on applications for additional payments for inpatient cases involving new medical technologies following review of public comments on the proposed rule, CMS also estimates that these payments will decrease by $0.8 billion in FY 2023. Under current law, additional payments for Medicare Dependent Hospitals and the temporary change in payments for low‑volume hospitals are set to expire in FY 2023. In the past, these payments have been extended by legislation, but if they were to expire CMS estimates that payments to these hospitals would decrease by $0.6 billion.
Use of the Best Available Data
CMS’ goal is to use the best available data overall when setting inpatient hospital payment rates for the upcoming fiscal year. Therefore, in this proposed rule we discuss our analysis of the best available data for use in the development of this FY 2023 IPPS/LTCH PPS proposed rule given the potential impact of COVID‑19 on hospitalizations. We are proposing to return to our historical practice of using the most recent available data, including the FY 2021 MedPAR claims and the FY 2020 cost reports, for the FY 2023 rate setting, with certain proposed modifications to our usual rate setting methodologies to account for the anticipated decline in COVID-19 hospitalizations of Medicare beneficiaries at IPPS hospitals and LTCHs as compared to FY 2021. CMS believes that it is reasonable to assume that some Medicare beneficiaries will continue to be hospitalized with COVID-19 at IPPS hospitals and LTCHs in FY 2023. However, we also believe it is reasonable to assume based on the information available at this time that there will be fewer COVID‑19 hospitalizations in FY 2023 than are reflected in the FY 2021 data.
In light of these assumptions, first, CMS is proposing to modify the calculation of the FY 2023 MS‑DRG and MS‑LTC-DRG relative weights. We are proposing to calculate the relative weights for FY 2023 by first calculating two sets of weights, one including and one excluding COVID-19 claims, and then averaging the two sets of relative weights to determine the FY 2023 relative weight values. Second, CMS is proposing to modify its methodologies for determining the FY 2023 outlier fixed-loss amount for IPPS cases and LTCH PPS standard Federal payment rate cases. We are proposing to use charge inflation factors and CCR adjustment factors derived from these data would provide a more reasonable approximation of the increase in costs that will occur from FY 2021 to FY 2023 because we do not believe the charge inflation that has occurred during the PHE will continue as the number of higher cost COVID-19 cases declines. As an alternative, we are also seeking comment on the use of the FY 2021 data without these proposed modifications to our usual methodologies.
Proposed Changes Related to MS-DRGs
CMS is not proposing any new MS-DRGs for FY 2023, which means the number of MS-DRGs would be maintained at 767 for FY 2023. We are discussing a request to reclassify laser interstitial thermal therapy (LITT) procedures under the MS-DRGs in connection with a proposal to create new procedure codes to describe LITT. We are proposing to further delay implementation of the “three-way split criteria” because of the magnitude of the impact during the ongoing PHE. We are continuing our review of diagnosis codes along with a comprehensive review of the procedure code list, including when a procedure should affect MS-DRG assignment. We also have a number of proposals for technical refinements to MS-DRG assignments and are requesting comments on issues relating to the classification of rare diseases or conditions that are represented by low volumes in our claims data within the MS-DRG structure.
Social Determinants of Health Comment Solicitation
CMS is soliciting public comments on how the reporting of social determinants of health (SDOH) diagnosis codes may improve our ability to recognize severity of illness, complexity of service, and/or utilization of resources under the MS-DRGs. We are also interested in receiving feedback on how we might otherwise foster the documentation and reporting of the diagnosis codes describing social and economic circumstances to more accurately reflect each health care encounter and improve the reliability and validity of the coded data including in support of efforts to advance health equity.
Payment Adjustment for Domestically Made Surgical N95 Respirators Comment Solicitation
The COVID-19 pandemic has illustrated how overseas production shutdowns, foreign export restrictions, or ocean shipping delays can jeopardize availability of raw materials and components needed to make critical public health supplies. Supply of surgical N95 respirators—a specific type of filtering facepiece respirator used in clinical settings—was one type of personal protective equipment that was strained in hospitals. In a future pandemic or increase in community spread of COVID-19, hospitals need to be able to count on domestic manufacturers of surgical N95 respirators to deliver the equipment they need on a timely basis in order to protect health care workers and their patients. Sustaining a level of wholly domestic production of National Institute for Occupational Safety and Health (NIOSH)-approved surgical N95 respirators would help to maintain that assurance. CMS recognizes that hospitals may incur additional costs when purchasing wholly domestically produced NIOSH-approved surgical N95 respirators and is seeking comment on the appropriateness of payment adjustments under the IPPS and OPPS that would account for any such additional costs. CMS is considering such payment adjustments to apply to 2023 and potentially subsequent years. This rule outlines two possible frameworks to do so, and seeks comment on these or other frameworks.
Graduate Medical Education (GME) Proposals
First, after reviewing the statutory language regarding the direct GME full-time equivalent (FTE) cap and the court’s opinion in Milton S. Hershey Medical Center, et al. v. Becerra, we are proposing a modified policy to be applied prospectively for all teaching hospitals, as well as retrospectively for certain providers and cost years. The proposed modified policy would address situations for applying the FTE cap when a hospital’s weighted FTE count is greater than its FTE cap, but would not reduce the weighting factor of residents that are beyond their initial residency period to an amount less than 0.5. Specifically, effective for cost reporting periods beginning on or after October 1, 2022, we are proposing that if the hospital’s unweighted number of FTE residents exceeds the FTE cap, and the number of weighted FTE residents also exceeds that FTE cap, the respective primary care and obstetrics and gynecology weighted FTE counts and other weighted FTE counts are adjusted to make the total weighted FTE count equal the FTE cap. If the number of weighted FTE residents does not exceed that FTE cap, then the allowable weighted FTE count for direct GME payment is the actual weighted FTE count.
Second, the law requires caps on the number of FTE residents that each teaching hospital may include in its IME and direct GME payment formulas. To provide flexibility to teaching hospitals that cross-train residents, CMS allows teaching hospitals to enter into “Medicare GME affiliation agreements” to share and redistribute those cap slots to accommodate the actual rotations of their residents. The law also includes a provision allowing additional cap slots for urban hospitals that establish “rural training tracks” with rural hospitals (now called Rural Training Programs (RTPs)). Our current regulations do not allow GME affiliation agreements for RTPs. Stakeholders have requested that RTPs be afforded the same flexibility as other teaching hospitals to share their RTP cap slots via special RTP affiliation agreements. We are proposing to allow an urban and a rural hospital participating in the same RTP to enter into an “RTP Medicare GME affiliation agreement” effective for the academic year beginning July 1, 2023.
Uncompensated Care Payments
CMS distributes a prospectively determined amount of uncompensated care payments to Medicare disproportionate share hospitals (DSHs) based on their relative share of uncompensated care nationally. As required under law, this amount is equal to an estimate of 75% of what otherwise would have been paid as Medicare DSH payments, adjusted for the change in the rate of uninsured individuals. In this proposed rule, CMS is proposing to distribute roughly $6.5 billion in uncompensated care payments for FY 2023, a decrease of approximately $654 million from FY 2022. This total uncompensated care payment amount reflects CMS Office of the Actuary’s projections that incorporate the estimated impact of the COVID-19 pandemic.
In response to concerns expressed by commenters that the use of only one year of data would lead to significant variations in year-to-year uncompensated care payments, for FY 2023, CMS is proposing to use the two most recent years of audited data on uncompensated care costs from Worksheet S-10 of hospitals’ FY 2018 and FY 2019 cost reports to distribute these funds. In addition, as we expect that FY 2024 will be the first year that three years of audited data would be available at the time of rulemaking, for FY 2024 and subsequent fiscal years, CMS is proposing to use a three-year average of the uncompensated care data from the three most recent fiscal years for which audited data are available. For example, for FY 2024 we expect to use audited data on uncompensated care costs from FY 2018, FY 2019, and FY 2020 cost reports to determine eligible hospitals’ uncompensated care payments
Beginning in FY2023, CMS is proposing to discontinue the use of low-income insured days as a proxy for uncompensated care in determining the amount of uncompensated care payments for Indian Health Service (IHS) and Tribal hospitals and hospitals located in Puerto Rico. Because we recognize that this proposal could result in a significant financial disruption for these hospitals, we are also proposing to establish a new supplemental payment for IHS/Tribal hospitals and hospitals located in Puerto Rico beginning in FY 2023.
Treatment of Section 1115 Demonstrations for Purposes of Disproportionate Share Hospital (DSH) Payments
CMS is proposing to revise our regulation governing the calculation of the Medicaid fraction of the Medicare DSH calculation. Under this proposal, we would revise our regulation to explicitly reflect our interpretation of the language “regarded as eligible” for Medicaid only includes patients who receive health insurance through a section 1115 demonstration itself or purchase such insurance with the use of premium assistance provided by a section 1115 demonstration. Under this proposal, only the days of those patients who receive hospital health insurance that provides essential health benefits, and if bought with premium assistance, for which the premium assistance is equal to at least 90% of the cost of the health insurance, would be included in the Medicaid fraction of the DSH calculation, provided the patient is not also entitled to Medicare Part A.
Cap on Wage Index Decreases
After further consideration of the comments we received during the FY 2022 rulemaking recommending a permanent policy to prevent large year-to-year variations in wage index values as a means to reduce overall volatility for hospitals, CMS is proposing to apply a 5% cap on any decrease to a hospital’s wage index from its wage index in the prior FY, regardless of the circumstances causing the decline. That is, under this proposed policy, a hospital’s wage index would not be less than 95% of its final wage index for the prior FY. CMS is also proposing to apply the proposed wage index cap policy the in a budget neutral manner through a national adjustment to the standardized amount.
Current State of Hospital Assessment on the Impact of Climate Change and Health Equity
Consistent with Executive Order 14008 on Tackling the Climate Crisis at Home and Abroad which includes the commitment to achieve a climate resilient infrastructure and operations, build a climate- and sustainability-focused workforce, and advance environmental justice and equity, CMS believes that the health care sector could more effectively prepare for climate threats. CMS is soliciting comment, via a request for information (RFI), on how hospitals, nursing homes, hospices, home health agencies, and other providers can better prepare for the harmful impacts of climate change on beneficiaries and consumers, and how we can support them in doing so.
CMS is seeking comment on what HHS and CMS can do to help hospitals more effectively: (a) determine likely climate impacts on their patients so that they can develop plans to mitigate those impacts; (b) understand the threats that climate change presents to their operations and better prepare for continuous operations should there be climate-related emergencies; and (c) understand how to take action to reduce emissions and track their progress.
Principles for Measuring Health Care Quality Disparities
Consistent with Executive Order 13985 on Advancing Racial Equity and Support for Underserved Communities through the Federal Government, CMS’ Equity Plan for Improving Quality in Medicare, and CMS’ strategic pillar to advance equity, CMS is also committed to addressing persistent inequities in health outcomes in the U.S. through improving data collection to better measure and analyze disparities across programs and policies. As disparity initiatives expand, it is important to model efforts off of existing best practices.
In the proposed rule, CMS is seeking comment, via an RFI, on considerations that CMS can take into account when advancing the use of measurement and stratification as tools to address health care disparities and advance health care equity. CMS is seeking comment on key considerations in five specific areas that could inform our approach: identification of goals and approaches for measuring health care disparities and using measure stratification across CMS quality programs; guiding principles for selecting and prioritizing measures for disparity reporting across CMS quality programs; principles for social risk factor and demographic data selection and use; identification of meaningful performance differences; and guiding principles for reporting disparity results.
CMS is also seeking comment on additional disparity measurement or stratification guidelines suitable for overarching consideration across quality programs.
Continuing to Advance Toward Future Digital Quality Measurement
To supplement CMS’ RFI in the FY 2022 IPPS/LTCH PPS final rule, and as part of CMS’ modernization of our digital quality measurement enterprise, we are issuing an RFI to gather comment on continued advancements to digital quality measurement and the use of the Fast Healthcare Interoperability Resources (FHIR®) standard for eCQMs. CMS is seeking comment on:
- Revisions to the potential future definition of digital quality measures;
- Data standardization activities to leverage and advance standards for digital data; and
- Approaches to achieve FHIR eCQM reporting across quality reporting programs, and specifically for the Hospital IQR Program.
Establishment of a Publicly-Reported Hospital Designation on Maternity Care
Addressing maternal health challenges is a priority of the Biden-Harris Administration. To build on the previously established HHS Maternal Health Action Plan and ongoing efforts with HHS and across the federal government to improve maternal mortality and morbidity and address disparities that persist, the Hospital IQR Program is proposing to establish a publicly-reported, public-facing hospital designation on the quality and safety of maternity care. CMS is proposing to establish this hospital designation in Fall 2023. This proposal is in conjunction with Vice President Harris’ nationwide call to action to reduce maternal mortality and morbidity, which included CMS’ intention to establish this proposed hospital designation. Under this proposal, CMS would award this designation to hospitals that report “Yes” to both questions in the Maternal Morbidity Structural Measure, previously finalized for adoption in the Hospital IQR Program.
As part of the proposal, CMS is also soliciting comment on potential names for the designation and additional potential data sources for CMS to consider in the future for purposes of awarding this designation.
CMS is also issuing an RFI to seek comment to explore how we can address the U.S. maternal health crisis through policies and programs, including, but not limited to, the Conditions of Participation and through measures in our quality reporting programs.
Hospital Inpatient Quality-Reporting (IQR) Program
The Hospital IQR Program is a pay-for-reporting quality program that reduces payment to hospitals that fail to meet program requirements. Hospitals that do not submit quality data or fail to meet all Hospital IQR Program requirements are subject to a one-fourth reduction in their Annual Payment Update under the IPPS. In the FY 2023 IPPS/LTCH PPS proposed rule, CMS is proposing to adopt ten measures, refine two current measures, make changes to the existing eCQM reporting and submission requirements, remove the zero denominator declaration and case threshold exemptions for hybrid measures, propose updates to our eCQM validation requirements for medical record requests, and propose reporting and submission requirements for patient-reported outcome-based performance measures (PRO-PMs). CMS is also requesting comment on the potential future adoption of two Centers for Disease Control and Prevention’s National Healthcare Safety Network (NHSN) measures.
Specifically, CMS is proposing to adopt:
- Hospital Commitment to Health Equity measure beginning with the CY 2023 reporting period/FY 2025 payment determination.
- Screening for Social Drivers of Health measure and Screen Positive Rate for Social Drivers of Health measure beginning with voluntary reporting in the CY 2023 reporting period and mandatory reporting beginning with the CY 2024 reporting period/FY 2026 payment determination.
- Two perinatal eCQMs—Cesarean Birth and Severe Obstetric Complications—available for self-selection beginning with the CY 2023 reporting period/FY 2025 payment determination followed by mandatory reporting beginning with the CY 2024 reporting period/FY 2026 payment determination.
- Hospital-Harm—Opioid-Related Adverse Events eCQM (NQF #3501e) beginning with the CY 2024 reporting period/FY 2026 payment determination.
- The Global Malnutrition Composite Score eCQM (NQF #3592e) beginning with the CY 2024 reporting period/FY 2026 payment determination.
- Hospital-Level Total Hip Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) PRO-PM (NQF #3559) beginning with two voluntary reporting periods (July 1, 2023 through June 30, 2024 and July 1, 2024 through June 30, 2025), followed by mandatory reporting for the reporting period which runs from July 1, 2025 through June 30, 2026, impacting the FY 2028 payment determination.
- Hospital-Level Risk-Standardized Complication Rate (RSCR) Following Elective Primary THA/TKA measure (NQF #1550) beginning with the FY 2024 payment determination.
- Medicare Spending Per Beneficiary—Hospital measure (NQF #2158) beginning with the FY 2024 payment determination.
CMS is also proposing refinements to two measures that are currently part of the Hospital IQR Program measure set beginning with the FY 2024 payment determination: Hospital‐Level, Risk‐Standardized Payment Associated with an Episode-of-Care for Primary Elective THA and/or TKA (NQF #3474) and Excess Days in Acute Care (EDAC) After Hospitalization for Acute Myocardial Infarction (AMI) (NQF #2881).
CMS is requesting comment on the potential future inclusion of two digital NHSN measures: Healthcare-Associated Clostridioides difficile Infection Outcome measure and Hospital-Onset Bacteremia and Fungemia Outcome measure.
Additionally, CMS is proposing two updates to our policies related to eCQMs. First, we are proposing to modify the eCQM validation policy to increase the submission requirement from 75% to 100% of the requested medical records to successfully complete eCQM validation beginning with the FY 2025 payment determination. Second, we are proposing to modify the eCQM reporting and submission requirements to increase eCQM reporting from four eCQMs (one mandatory and three self-selected) to six eCQMs (three mandatory and three self-selected) beginning with the CY 2024 reporting period/FY 2026 payment determination.
CMS is also proposing to remove the zero denominator declarations and case threshold exemptions policies for hybrid measures beginning with the FY 2026 payment determination.
Lastly, we are proposing submission and reporting requirements for PRO-PM measures beginning with the FY 2026 payment determination, specifically for the proposed THA/TKA PRO-PM, since this is a new measure type for the Hospital IQR Program.
Medicare Promoting Interoperability Program
In 2011, CMS established the Medicare and Medicaid EHR Incentive Programs (now known as the Promoting Interoperability Programs for eligible hospitals and critical access hospitals (CAHs)) to encourage eligible professionals, eligible hospitals, and CAHs to adopt, implement, upgrade, and demonstrate meaningful use of certified EHR technology (CEHRT).
CMS specifically is proposing the following changes to the Medicare Promoting Interoperability Program for eligible hospitals and CAHs:
- Make mandatory the Electronic Prescribing Objective’s Query of Prescription Drug Monitoring Program (PDMP) measure, expand to include Schedule II, III, and IV drugs and maintain the associated points at 10 points;
- Add a new Enabling Exchange under the Trusted Exchange Framework and Common Agreement (TEFCA) measure under the Health Information Exchange (HIE) Objective as a yes/no attestation measure, beginning with the EHR reporting period in CY 2023, as an optional alternative to the three existing measures under the HIE Objective;
- Add a new Antimicrobial Use and Resistance (AUR) Surveillance measure and require its reporting under the Public Health and Clinical Data Exchange Objective, beginning with the CY 2023 EHR reporting period;
- Beginning with the CY 2023 EHR reporting period, we are proposing to reduce the active engagement options for the Public Health and Clinical Data Exchange Objective from three to two options;
- Beginning with the CY 2023 EHR reporting period, we are proposing to require submission of the level of active engagement, in addition to submitting the measures for the Public Health and Clinical Data Exchange Objective;
- Institute public reporting of certain Medicare Promoting Interoperability Program data beginning with the CY 2023 EHR reporting period;
- Beginning with CY 2023 EHR reporting period, we are proposing to increase the Public Health and Clinical Data Exchange Objective from 10 to 25 points, to increase the points associated with the Electronic Prescribing Objective from 10 to 20, to reduce the points associated with the Health Information Exchange Objective from the current 40 points to 30 points, and to reduce the points associated with the Provide Patients Electronic Access to Their Health Information from the current 40 to 25 points;
- Adopt two new eCQMs to the Medicare Promoting Interoperability Program’s eCQM measure set beginning with the reporting period in CY 2023, and two new eCQMs beginning with the reporting period in CY 2024 in alignment with proposals for the Hospital IQR Program;
- Modify the eCQM reporting and submission requirements to increase eCQM reporting from four eCQMs (one mandatory and three self-selected) to six eCQMs (three mandatory and three self-selected) beginning with the CY 2024 reporting period in alignment with proposals in the Hospital IQR Program.
PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program
The PCHQR Program is a voluntary quality reporting program for the eleven cancer hospitals that are statutorily exempt from the IPPS. CMS collects and publishes data from PCHs on applicable quality measures. In the FY 2023 IPPS/LTCH PPS proposed rule, CMS is:
- Proposing to begin public display of the 30-Day Unplanned Readmissions for Cancer Patients Measure (PCH-36) and the four end-of-life measures (PCH-32, PCH-33, PCH-34, and PCH-35);
- Proposing to adopt and codify a patient safety exception into the measure removal policy;
- Requesting information from stakeholders on the potential future adoption of two digital National Healthcare Safety Network (NHSN) measures: the NHSN Healthcare-associated Clostridioides difficile Infection Outcome measure and NHSN Hospital-Onset Bacteremia & Fungemia Outcome measure.
Measure Suppression or Refinement Policies in Response to COVID-19 PHE in Certain Value-Based Purchasing Programs
Since the COVID-19 public health emergency (PHE) is ongoing, CMS is proposing to suppress or refine several measures in the Hospital Readmissions Reduction Program (HRRP), Hospital-Acquired Condition (HAC) Reduction Program, and Hospital Value-Based Purchasing (VBP) Program. These policies are intended to ensure that these programs do not reward or penalize hospitals based on circumstances caused by the PHE for COVID-19 that the measures were not designed to accommodate. Examples of the types of external factors that the PHE has had that may affect quality measurement include changes to clinical practices to accommodate safety protocols for medical personnel and patients, as well as unpredicted changes in the number of patient stays and facility-level cases.
Hospital Readmissions Reduction Program (HRRP)
The HRRP is a Medicare value-based purchasing program that reduces payments to hospitals with excess readmissions. It also supports CMS’ goal of improving health care for Medicare beneficiaries by linking payment to the quality of hospital care. In the FY 2023 IPPS/LTCH PPS proposed rule, CMS is:
- Proposing to resume the Hospital 30-Day, All-Cause, Risk-Standardized Readmission Rate (RSRR) following Pneumonia Hospitalization measure (NQF #0506) beginning with the FY 2024 program year following suppression of this measure which was previously finalized for FY 2023;
- Modifying the Hospital 30-Day, All-Cause, Risk-Standardized Readmission Rate (RSRR) following Pneumonia Hospitalization measure (NQF #0506) to exclude COVID-19 diagnosed patients from the measure denominators, beginning with the FY 2024 program year (Hospital Specific Reports for this measure would include this modification for the FY 2023 program year; however, because the measure has been suppressed for the FY 2023 program year, these data will not be otherwise available);
- Modifying all six condition/procedure specific readmissions measures to include a covariate adjustment for history of COVID-19 within one year preceding the index admission, beginning with the FY 2024 program year;
- Seeking public comment on promoting health equity through possible future incorporation of hospital performance for socially at-risk populations into the Hospital Readmissions Reduction Program.
Hospital-Acquired Condition (HAC) Reduction Program
The HAC Reduction Program creates an incentive for hospitals to reduce the incidence of hospital-acquired conditions by requiring the Secretary to reduce payment by 1% for applicable hospitals that rank in the worst performing quartile on select measures of hospital-acquired conditions. In the FY 2023 IPPS/LTCH PPS proposed rule, CMS is:
- Proposing to suppress the CMS PSI 90 measure and the five CDC NHSN HAI measures from the calculation of measure scores and the Total HAC Score, thereby not penalizing any hospital under the HAC Reduction Program FY 2023 program year;
- Proposing to publicly and confidentially (through Hospital Specific Report) report CDC NHSN HAI measure results but not calculate or report measure results for the CMS PSI 90 measure for the HAC Reduction Program FY 2023 program year due to misaligned data periods;
- Proposing to suppress CY 2021 CDC NHSN HAI measures data from the FY 2024 HAC Reduction Program Year;
- Making a technical update the measure specification to the minimum volume threshold for the CMS PSI 90 measure beginning with the FY 2023 program year;
- Making a technical update the CMS PSI 90 measure specifications to risk-adjust for COVID-19 diagnosis beginning with the FY 2024 HAC Reduction Program Year;
- Requesting information from stakeholders on the potential future adoption of two digital National Healthcare Safety Network (NHSN) measures: the NHSN Healthcare-associated Clostridioides difficile Infection Outcome measure and NHSN Hospital-Onset Bacteremia & Fungemia Outcome measure;
- Requesting information on overarching principles for measuring health care quality disparities across CMS Quality Programs;
- Proposing to update the NHSN CDC HAI data submission requirements for newly opened hospitals beginning in the FY 2024 HAC Reduction Program Year; and
- Clarifying the removal of the no mapped location policy beginning with the FY 2023 program year.
Hospital Value-Based Purchasing (VBP) Program
The Hospital VBP Program is a budget-neutral program funded by reducing participating hospitals’ base operating DRG payments each fiscal year by 2% and redistributing the entire amount back to the hospitals as value-based incentive payments. In this proposed rule,
CMS is proposing to:
- Suppress the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) and five Hospital Acquired Infection (HAI) measures, for the FY 2023 Program year.
As a result of the above proposed measure suppressions for the FY 2023 program year, less than half of the Hospital VBP Program measures would then be available for accurate national comparison. Therefore, CMS is also proposing to not calculate a TPS for any hospital and to instead award all hospitals a value-based payment amount for each discharge that is equal to the amount withheld. CMS is also proposing to calculate measure rates for all measures and to publicly report those rates where feasible and appropriately caveated.
CMS is also proposing to update the baseline periods for certain measures for the FY 2025 program year. The agency is also announcing that CMS is making technical administrative updates to the measures included in the Clinical Outcomes Domain.
Long Term Care Hospital Quality Reporting Program (LTCH QRP)
The LTCH QRP is a pay-for-reporting program. LTCHs that do not meet reporting requirements are subject to a two-percentage point reduction in their Annual Increase Factor. In the FY 2023 IPPS/LTCH PPS proposed rule, CMS is requesting information on:
- Inclusion of the National Healthcare Safety Network (NHSN) Healthcare-associated Clostridioides difficile Infection Outcome Measure in the LTCH QRP- Request for Information (RFI)
CMS is also seeking stakeholder feedback on the inclusion of a digital Centers for Disease Control and Prevention (CDC) NHSN Healthcare-associated Clostridioides difficile Infection Outcome measure into the LTCH QRP. This measure tracks the development of new Clostridioides difficile infection among patients already admitted to LTCHs, using algorithmic determinations from data sources widely available in electronic health records. This measure improves on the original measure by requiring both microbiologic evidence of C. difficile in stool and evidence of antimicrobial treatment. Through this RFI, we would like to assess the feasibility of this digital measure in LTCHs. If this type of measure is proposed and finalized in a future rule, this would be the first digital measure in the LTCH QRP.
CMS is also requesting information on our overarching principles for measuring health care disparities across CMS Quality Programs, including the LTCH QRP, as well as quality measure concepts under consideration for future years.
Changes to Payment Rates under LTCH PPS
For FY 2023, CMS expects LTCH PPS payments to increase by approximately $25 million. LTCH PPS payments for FY 2023 for discharges paid the standard LTCH payment rate are expected to increase by approximately 0.7% due primarily to the annual standard Federal rate update (that is, the productivity-adjusted market basket increase) for FY 2023 of 2.7% and a projected decrease in high cost outlier payments.
Extensions of the Rural Community Hospital and Frontier Community Health Integration Project (FCHIP) Demonstrations
Sections 128 and 129 of the Consolidated Appropriations Act, 2021, respectively, authorize a five-year extension for both the Rural Community Hospital Demonstration and FCHIP Demonstration. CMS is including its proposals for implementing these extensions in the FY 2023 IPPS/LTCH PPS proposed rule.
Proposed Revision to Conditions of Participation (CoP) for Hospitals and CAHs To Report Data Elements for COVID-19, Seasonal Influenza, and Future Pandemics and Epidemics as Determined by the Secretary
CMS is proposing revisions to the hospital and CAH infection prevention and control CoP requirements that would require hospitals and CAHs, after the conclusion of the current COVID-19 public health emergency (PHE), to continue COVID-19 and seasonal influenza reporting. The proposed revisions would apply upon conclusion of the COVID-19 PHE and continue until April 30, 2024, unless the Secretary establishes an earlier ending date. In addition, we are proposing to establish reporting requirements for future PHEs related to epidemics and pandemics by requiring hospitals and CAHs to electronically report information on acute respiratory illness (including, but not limited to seasonal influenza virus, influenza-like illness, and severe acute respiratory infection), SARS-CoV-2/COVID-19, and other viral and bacterial pathogens or infectious diseases of pandemic or epidemic potential only when the Secretary has declared a PHE directly related to such specific pathogens and infectious diseases. Specifically, when the Secretary has declared a PHE, we propose to require hospitals and CAHs to report specific data elements to the CDC’s National Health Safety Network (NHSN), or other CDC-supported surveillance systems, as determined by the Secretary. The proposed requirements of this section would apply to local, state, and national PHEs as declared by the Secretary. These proposed requirements would also allow for reduced frequency of reporting and modified or limited data elements that might be required at the discretion of the Secretary.