Medicare Payment and Reimbursement

News Briefs: CMS plans to reinstate policies pertaining to the inpatient-only and ASC covered-procedures lists

August 27, 2021 5:56 pm

The 2022 proposed rule for the Outpatient Prospective Payment System (OPPS) includes a reversal of two 2021 policies that some hospital stakeholders had opposed: A phase-out of the inpatient-only (IPO) list and a relaxation of the criteria for adding services to the ambulatory surgical center covered-procedures list (ASC CPL).

The changes indicate that CMS under the leadership of first-year Administrator Chiquita Brooks-LaSure is less likely than the Trump administration was to look to expand site-of-care options if doing so means overturning longstanding protocols.

The 2021 OPPS rule had established that the IPO list would be eliminated over a three-year period, starting with the removal of 298 primarily musculoskeletal-related services this year. Now those services would be added back to the IPO list for 2022, meaning Medicare covers them only if they take place in the inpatient setting.

The 2021 rule also had added 267 procedures to the ASC CPL after revising longstanding patient safety criteria. The 2022 rule proposes to reinstate the criteria and remove 258 of the procedures that were added for 2021.

Comments on the proposed rule are due to CMS by Sept. 17.

FY22 Medicare payment increase finalized for IPPS hospitals

CMS on Aug. 2 issued a final rule that sets FY22 Medicare payment and policy changes for hospitals paid through the Inpatient Prospective Payment System (IPPS) and for long-term care hospitals.

The overall payment increase for IPPS hospitals that successfully participate in the Inpatient Quality Reporting Program and that are meaningful users of electronic health records will be 2.5%, down from the earlier proposed rate of 2.8%. The change stems from updated economic-forecasting data.

The reduction in uncompensated care payments will be $1.1 billion, instead of $660 million as stated in the proposed rule issued in April. As previously decided, CMS will distribute FY22 uncompensated care funds based on a single year of a hospital’s data on Worksheet S-10 of FY18 cost reports.

New surprise billing regulations place restrictions on balance billing

Hospital revenue cycle departments should get up to speed on balance-billing restrictions that will take effect Jan. 1, 2022, in accordance with a new federal rule.

Even in various situations where balance billing will remain permissible, hospitals will have to implement additional procedures involving notice and consent unless they are in a state where such regulations already exist.

Following emergency care, for example, balance billing will be allowed for post-stabilization services if the attending emergency physician or treating provider determines that the patient is capable of traveling to an in-network facility.

If a patient is deemed fit to travel for care and still chooses to receive post-stabilization services on an out-of-network basis, the patient may be balance-billed if the provider follows the notice-and-consent procedures established in the rule.

CMS is preparing to make price transparency noncompliance much more expensive

Proposed 2022 regulations for the Outpatient Prospective Payment System include tougher penalties for violating price transparency mandates that took effect this year. Namely, the $300 per day penalty for noncompliance would rise significantly for larger hospitals.

The $300 rate would remain for hospitals with 30 or fewer beds. The penalty would rise by $10 per day for each additional bed, with a maximum allowable penalty of $5,500 per day.

Thus, for hospitals that remain noncompliant for an entire year, the penalty would range from $109,500 to slightly more than $2 million.

Study: In price negotiations with hospitals, self-insured employers lack leverage

Hospitals have the advantage in negotiations with self-insured employers, which struggle to exert market power in a way that affects prices, according to a new study.

As reported in the July 2021 issue of the American Journal of Managed Care, researchers examined the association between an employer’s market power and negotiated hospital prices. The association “becomes statistically insignificant once the models control for hospital wages,” wrote researchers with the Bloomberg School of Public Health.

The researchers quantified employer market power through a complex calculation that was described as similar to the Herfindahl-Hirschman Index (HHI).

During the study period, 2010-16, “the average employer market was very unconcentrated,” the researchers wrote. The average value of employer market power on the research team’s scale was 62, compared with 5,410 for hospital market power; a market score of 2,500 or higher in the HHI is considered “highly concentrated.”

Fitch describes the heightened risk posed by cyberattacks on NFP hospitals

Not-for-profit (NFP) hospitals increasingly will face revenue and expense pressures from cyberattacks, according to Fitch Ratings.

In a July 22 news release, Fitch noted the “historic increase” in the volume and severity of cyberattacks over the past 18 months.

“Ransomware pay-outs and efforts to protect or ‘harden’ healthcare systems and cyber defenses are affecting hospital financial flexibility by increasing ongoing operating expenses,” Fitch wrote. “Attacks may also hinder revenue generation and the ability to recover costs in a timely manner, particularly if they affect a hospital’s ability to bill patients when financial records are compromised or systems become locked.”

Full restoration of systems required an average of 236 days per attack in 2020, Fitch reported. 


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