CMS Releases FY 2022 IPPS Proposed Update

Summary

On April 27, 2021, the Centers for Medicare and Medicaid Services (CMS) posted the FY 2022 Inpatient Prospective Payment System (IPPS) proposed update, along with proposed policy and regulation changes. The proposed rule would update Medicare payment policies and quality reporting programs relevant for inpatient hospitals, and would address challenges related to the COVID-19 pandemic.

The proposed rule is available here. A CMS factsheet on the proposed rule is available here. The proposed rule is scheduled to be published in the Federal Register on May 10, 2021, and comments are due on June 28, 2021.

Key Takeaways

  1. CMS estimates the proposed update would increase IPPS payments to hospitals in FY 2022 by approximately $2.5 billion.
  2. The proposed FY 2022 standardized amount for hospitals that successfully participate in the Hospital Inpatient Quality Reporting (IQR) Program and that are meaningful electronic health record (EHR) users would be $6,140.29, an increase of 3% compared to the final FY 2021 standardized amount.
  3. CMS proposes to use FY 2019 Medicare Provider Analysis and Review (MedPAR) data as the best available data for the FY 2022 ratesetting process given the impact of the COVID-19 public health emergency (PHE) on inpatient utilization and case mix in FY 2020.
  4. As a one-time exception, also because of pandemic impacts, CMS proposes to extend the New Technology Add-on Payment (NTAP) period for one year for 14 technologies with expiring NTAP periods.
  5. Because of the COVID-19 pandemic, CMS proposes to suppress (i.e., not use) most Hospital Value-Based Purchasing (HVBP) Program measures so that hospitals would receive neutral payment adjustments under the HVBP Program for FY 2022.
  6. CMS proposes to implement several provisions of the Consolidated Appropriations Act, 2021 (CAA), including distributing 1,000 new Medicare-funded medical residency positions.
  7. CMS solicits feedback on two requests for information (RFIs), one focused on moving to digital quality measures and another on promoting health equity.

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For more information, contact Deborah Godes, Kelsey Haag, Sheila Madhani, or Kristen O’Brien.