CMS' final payment rules take effect Oct. 1: 21 things to know

Alia Paavola

CMS released several final payment rules for fiscal year 2022 that will take effect Oct. 1.

Below is a breakdown of 21 things to know about the final rules: 

Inpatient facilities

1. Hospitals that report quality data and are meaningful users of EHRs will see about a 2.5 percent increase in Medicare rates in fiscal year 2022, compared to 2021. CMS expects hospital payments to increase by an aggregate $2.3 billion in fiscal 2022. CMS said the changes in the final rule will increase payments by $3.7 billion and include a $1.4 billion decrease from other adjustments.

2. CMS will move forward with its plan to remove median payer-specific negotiated rates by Medicare severity-diagnosis related group, with Medicare Advantage insurers. CMS said this will reduce administrative burden on hospitals by about 64,000 hours. 

3. CMS will distribute $7.2 billion in uncompensated care payments for fiscal 2022, a decrease of about $1.1 billion from fiscal 2021.

4. The inpatient payment rule finalizes an add-on payment for COVID-19 treatment through the end of the fiscal year in which the public health emergency ends.

5. CMS proposed several changes to the Inpatient Quality Reporting Program, which reduces payment to hospitals that fail to meet program requirements. CMS will add five new measures to the program, including COVID-19 vaccination rates among healthcare personnel, a metric targeting maternal morbidity and two medication-related adverse event electronic clinical quality measures. CMS will also remove the exclusive breast milk feeding measure and make other changes.

Read more about the final rule here. 

Hospices

1. Under the final rule, hospices will see a 2 percent increase in payments for fiscal year 2022, compared to fiscal 2021. CMS estimates this will be an increase of $480 million.

2. The fiscal 2022 payment rule also includes an update to the cap that limits the amount of payments a hospice receives per patient annually. The cap will rise to $31,297.61, a 2 percent increase over 2021.

3. CMS will implement a new measure for the Hospice Quality Reporting Program called the Hospice Care Index. The single measure has 10 indicators of quality that are calculated from claims data.

4. CMS issued several waivers amid the pandemic, including one that allowed the use of pseudo-patients for hospice aide competency testing. The final rule makes this waiver permanent. 

"This change will allow the hospice to focus on the hospice aides' specific deficient and related skill(s) instead of assessing multiple areas within the competency evaluation," CMS said.

Read more about the hospice payment rule here. 

Inpatient rehabilitation facilities

1. CMS will increase the inpatient rehabilitation facilities payment rate by 1.9 percent in fiscal 2022.

2. After factoring in an adjustment that will result in a 0.4 percentage point decrease in outlier payments, CMS estimates that overall payments to inpatient rehabilitation facilities would increase $130 million in fiscal 2022 compared to fiscal 2021.

3. For the Inpatient Rehabilitation Facility Quality Reporting Program, a pay-for-reporting program, CMS will adopt one new measure and work to finalize an update to the specifications for another reporting measure.

4. CMS adopted a measure that will require inpatient rehabilitation facilities to report employees' COVID-19 vaccination statuses. Public reporting of vaccination coverage will begin with the September 2022 Care Compare refresh or "as soon as technically feasible," based on data collected for the fourth quarter of 2021, CMS said. 

Read more about the inpatient rehabilitation facilities final rule here.

Inpatient psychiatric facilities 

1. The payment rate for inpatient psychiatric facilities will increase by 2 percent. CMS estimates that total payments to these facilities will increase by $80 million in 2022, relative to 2021, after taking into account all updates.

2. CMS finalized a policy to ensure medical residents won't be displaced if their teaching hospital or program closes, preventing them from getting board-certified. This change aligns the teaching policy for inpatient psychiatric facilities with changes included in the 2021 final rule for inpatient hospitals.

3. CMS will require inpatient psychiatric facilities to report COVID-19 vaccination status of their employees. The measure was developed by the CDC to track vaccinations of healthcare personnel in the inpatient psychiatric setting.

4. CMS also is working to finalize its proposal to expand the follow-up after psychiatric hospital measures to include patients with substance-use disorders. The measure is used in the quality payment program and will be finalized in the 2024 payment determination, CMS said.

Read more about the inpatient psychiatric facility final rule here. 

Skilled nursing facilities

1. CMS will increase payments to skilled nursing facilities by 1.2 percent in fiscal 2022.

2. After taking into account all payment policies in the final rule, CMS estimates that skilled nursing facilities will see total Medicare Part A payments increase by $410 million in fiscal 2022.

3. The Consolidated Appropriations Act requires that certain blood clotting factors used for the treatment of patients with bleeding disorders be excluded from the consolidating billing requirements under the skilled nursing facility prospective payment system after Oct. 1. CMS will finalize a proportional reduction of Medicare Part A rates to account for this new exclusion. CMS said this reduction will offset the increase in Part B spending that will occur because of the exclusion.

4. CMS will require skilled nursing facilities to report COVID-19 vaccination status of their employees. 

Read more about the skilled nursing facility final rule here.