CMS Releases FY 2023 Medicare IPPS & LTCH PPS Proposed Rule

CMS issued the fiscal year 2023 Medicare Hospital Inpatient Prospective Payment System (“IPPS”) and Long‑Term Care Hospital (“LTCH”) Prospective Payment System (PPS) proposed rule, 87 FR 28108, on April 18, 2022 updating Medicare fee-for-service payment rates and policies for inpatient hospitals and LTCHs for fiscal year 2023.

Through this rule, CMS aims to establish new requirements and revise existing requirements for eligible hospitals and critical access hospitals participating in the Medicare Promoting Interoperability Program. Among other changes to hospital payment rates and methodologies, CMS proposes and seeks comment on the following changes:

  • 3.2 percent increase in payment rates under the IPPS in fiscal year 2023 for general acute care hospitals paid under the IPPS that successfully participate in the Hospital Inpatient Quality Reporting (“IQR”) program and that are meaningful electronic health record (“EHR”) users.
  • Adding payment adjustments under the IPPS and OPPS for hospitals that source their N95 respirators from domestic manufacturers.
  • Distribution of approximately $6.5 billion in uncompensated care payments for fiscal 2023.
  • Changes to the IQR program including addition of 10 new measures to assess hospitals' compliance with program requirements.
  • Requirement that hospitals continue reporting COVID-19 and flu data until April 30, 2024.

CMS has released a Fact Sheet detailing each change under the proposed rule. CMS is accepting comments to the proposed rule until June 17.

Changes to CMS ACO Models

Beginning Jan. 1, 2023, CMS will be replacing the Global and Professional Direct Contracting (“GPDC”) Model for Medicare accountable care organizations (“ACO”) with the redesigned ACO Realizing Equity, Access, and Community Health (“REACH”) Model, as an effort to improve care coordination and outcomes for Medicare patients, especially those in underserved communities. According to CMS’s Press Release for this change, the ACO REACH Model will maintain the following priorities:

  • a greater focus on health equity and closing disparities in care;
  • an emphasis on provider-led organizations and strengthening beneficiary voices to guide the work of model participants;
  • stronger beneficiary protections through ensuring robust compliance with model requirements;
  • increased screening of model applicants, and increased monitoring of model participants;
  • greater transparency and data sharing on care quality and financial performance of model participants;
  • and stronger protections against inappropriate coding and risk score growth.

Providers should be aware of the following information made available by CMS:

  • The first performance year of the redesigned ACO REACH Model will start on January 1, 2023, and the model performance period will run through 2026.
  • CMS is releasing a Request for Applications for provider-led organizations interested in joining the ACO REACH Model.
  • Current participants in the GPDC Model must agree to meet all the ACO REACH Model requirements by January 1, 2023 in order to participate.

Accreditation Organizations Required to Notify CMS of Change of Ownership

Centers for Medicare and Medicaid Services (“CMS”) published a final rule, 87 FR 25413, effective June 28, 2022, requiring Accreditation Organizations (“AO”) to notify CMS at least 90 days prior to the effective date of a change of ownership (“CHOW”). The notice will allow CMS to evaluate whether the AO, under the new ownership, would (1) be viable or equipped to accredit facilities under its existing CMS approval; (2) be able to enforce the health and safety requirements of CMS for that program; (3) operative effectively; and (4) continue to meet or exceed the Medicare standards. The final rule is intended to ensure the ongoing effectiveness of the transferred accreditation program(s) and to minimize any risk to patient safety.

CMS Proposes Rule Expanding Medicare Coverage

CMS published a proposed rule, 87 FR 25090, which implements certain provisions of the 2021 Consolidated Appropriations Act, aimed at expanding coverage for people with Medicare and further advancing health equity. Under the proposed rule, Medicare coverage would be provided the month immediately after enrollment, thereby reducing the uninsured period, and access to Medicare would be expanded through new special enrollment periods (“SEPs”) for individuals who meet exceptional conditions. The rule also extends immunosuppressive drug coverage under Part B for certain individuals whose Medicare entitlement based on end‑stage renal disease would otherwise end 36 months after the month in which they received a successful kidney transplant, provided they do not have certain other health coverage. CMS issued a fact sheet on the proposed rule. Comments are due June 27, 2022.