The Centers for Medicare & Medicaid Services (CMS) has issued the final rule for fiscal year (FY) 2022 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital (LTCH) Prospective Payment System (PPS). The rule revises the Medicare IPPS for operating and capital-related costs of acute care hospitals as well as for certain hospitals and hospital units excluded from the IPPS and updates the payment policies and the annual payment rates for inpatient hospital services provided by LTCHs under the LTCH PPS.
CMS has increased operating payment rates by approximately 2.5% for general acute care hospitals paid under the IPPS that successfully participate in the Hospital Inpatient Quality Reporting (IQR) Program and are meaningful electronic health record users. Overall, CMS estimates hospitals payments will increase by $2.3 billion. Furthermore, CMS projects LTCH-PPS payments to increase by approximately 1.1% ($42 million).
Other policy updates implemented in this final rule include:
- Finalizing the May 10, 2021 interim final rule with comment period regarding rural reclassification through the Medicare Geographic Classification Review Board (MGCRB). This final rule includes policies related to new technology add-on payments.
- Establishing new requirements and revising existing requirements for eligible hospitals and critical access hospitals (CAHs) participating in the Medicare Promoting Interoperability Program.
- Updating policies for the Hospital Readmissions Reduction Program (HRRP), Hospital Inpatient Quality Reporting (IQR) Program, Hospital-Acquired Condition (HAC) Reduction Program, Long-Term Care Hospital Quality Reporting Program (LTCH QRP), and the PPS-Exempt Cancer Hospital Reporting (PCHQR) Program
- Establishing new performance standards and updating policies for the Hospital Value-Based Purchasing (VBP) Program
- Suppression measures in the Hospital VBP, HAC Reduction and HRRP due to the COVID-19 Public Health Emergency (PHE) impact on measure data
- Implementing a special scoring methodology for FY 2022 that results in a value-based incentive payment amount that matches the 2% reduction to the base operating DRG payment amount.
- Alleviating problems related to claiming Medicare bad debt
- Providing a participation opportunity for eligible accountable care organizations (ACOs)
Source: U.S. Centers for Medicare & Medicaid Services (CMS)
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