CMS Releases First Payment Rules for FY 2022

Proposed rules offer insight into the Administration’s priorities.

The Centers for Medicare & Medicaid Services (CMS) has issued its first proposed payment rules under the Biden Administration. While these rules are required to update Medicare payment rates for different provider types, they also give us insights into the new Administration’s priorities.

On Wednesday, April 7, CMS announced proposed rules for the FY 2022 Payment and Quality Reporting Updates for Inpatient Psychiatric Facilities (IPFs), and for the FY 2022 Inpatient Rehabilitation Facility (IRF) Prospective Payment System (PPS). In doing so, CMS said it is seeking feedback on ways to attain health equity for all patients through policy solutions. This is consistent with Executive Order 13985, on Advancing Racial Equity and Support for Underserved Communities. CMS is working to make healthcare quality more transparent to consumers and providers, enabling them to make better choices, as well as promoting provider accountability as it pertains to health equity.

CMS’s ongoing commitment to closing the health equity gap in IRFs has been demonstrated by the adoption of standardized patient assessment data elements (SPADEs), which include several social determinants of health (SDoH) that were finalized in the FY 2020 IRF PPS final rule for the IRF Quality Reporting Program (QRP) (84 FR 39149 through 39161). CMS is seeking comment on the possibility of expanding measure development and the collection of other SPADEs that address gaps in health equity in the IRF QRP.

In the Inpatient Psychiatric Facility Proposed Rule, CMS is requesting comment on future potential stratification of quality measure results by dual eligibility and other social risk factors in facility-specific reports, marking ways to improve demographic data collection, and the potential creation of a facility equity score to synthesize results across multiple measures and social risk factors.

Regarding the annual payment updates, total estimated payments to IPFs are estimated to increase by 2.3 percent, or $90 million, in FY 2022, relative to IPF payments in FY 2021. For FY 2022, CMS is proposing to update the IPF PPS payment rates by 2.1 percent. There are also a number of proposed changes to the IPF quality reporting system, including the following:

  • For the FY 2023 payment determination and subsequent years, CMS is proposing to add the COVID-19 Vaccination Coverage Among Healthcare Personnel (HCP) measure to the IPFQR Program.
  • For the FY 2024 payment determination and subsequent years, CMS is proposing to add the Follow-up After Psychiatric Hospitalization (FAPH) measure to the IPFQR Program.
  • In an effort to reduce provider burden, CMS is also proposing to remove three chart-abstracted measures from the IPFQR Program for the FY 2024 payment determination and subsequent years, because the costs associated with these measures outweigh the benefits of continuing to retain them in the IPFQR program. These measures are Alcohol Use Brief Intervention Provided or Offered and Alcohol Use Brief Intervention; Tobacco Use Treatment Provided or Offered and Tobacco Use Treatment; and Timely Transmission of Transition Record (Discharges from an Inpatient Facility to Home/Self Care or any Other Site of Care)
  • Additionally, CMS is proposing to transition to patient-level reporting for chart-abstracted measures, beginning with voluntary reporting of data for the FY 2023 payment determination and transitioning to required patient-level reporting for the FY 2024 payment determination and subsequent years.

Regarding IRFs, For FY 2022, CMS is proposing to update the IRF PPS payment rates by 2.2 percent. And for the IRF QRP:

  • CMS is seeking feedback on our future plans to define digital quality measures (dQMs). CMS also is seeking feedback on the potential use of FHIR for dQMs, aligning, where possible, with other quality programs;
  • CMS is proposing the adoption of the COVID-19 Vaccination Coverage among Healthcare Personnel (HCP) Measure to require IRFs to report COVID-19 HCP vaccinations in their facilities; and
  • CMS is proposing to update the denominator for the Transfer of Health (TOH) Information to the Patient-Post Acute Care (PAC) quality measure.

Comments on the proposed rules and requests for information are due by June 7.

Programming Note: Listen to Stanley Nachimson’s RegWatch report today during Talk Ten Tuesdays, 10 a.m. Eastern.


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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