August 11, 2022

CMS Releases FY 2023 IPPS and LTCH Final Rule

Holland & Knight Alert
Miranda A. Franco


  • The Centers for Medicare & Medicaid Services (CMS) on Aug. 1, 2022, released the final rule for the federal fiscal year (FY) 2023 inpatient prospective payment system (IPPS) and long-term care hospital (LTCH) payment system.
  • Medicare payments for hospital inpatient services will increase by 4.3 percent. This is a higher reimbursement rate than the 3.2 percent increase that CMS proposed in April. In addition, CMS estimates that the aggregate LTCH PPS payments will increase by 2.4 percent, or $71 million, as compared to FY 2022.
  • The final rule will be effective on Oct. 1, 2022.

The Centers for Medicare & Medicaid Services (CMS) on Aug. 1, 2022, released the final rule for the federal fiscal year (FY) 2023 inpatient prospective payment system (IPPS) and long-term care hospital (LTCH) payment system. The CMS released the final rule and a fact sheet. A fact sheet on the maternal health provisions is also available.

The final rule will be effective on Oct. 1, 2022.

Key Takeaways

  • Biggest Payment Bump in 25 Years: Medicare payments for hospital inpatient services will increase by 4.3 percent. This is a higher reimbursement rate than the 3.2 percent increase that CMS proposed in April. "This is the highest market basket update in the last 25 years and is primarily due to higher expected growth in compensation prices for hospital workers," CMS said. 
  • Offsetting Cuts: The rate increase will be partially offset by decreases in the disproportionate share hospital (DSH) and Medicare uncompensated care payments, which will decline in FY 2023 by about $300 million. CMS also estimates that additional payments for new technology add-on payments (NTAP) will decrease by $750 million. This estimate also does not factor in the sequestration adjustment.
  • Birthing-Friendly Hospital Designation: CMS finalized a "birthing-friendly" hospital designation to promote the quality and safety of maternity care.
  • Health Equity: CMS adopted 10 new measures for the Hospital Inpatient Quality Reporting (IQR) Program, including three health equity-focused measures. The first measure will assess a hospital's commitment to establishing a culture of equity by examining five domains, including data collection, strategic planning, data analysis, leadership engagement and quality improvement. The second and third measures will examine patient-level, health-related social needs, including housing instability and food insecurity. CMS is interested in using measures focused on connecting patients with identified social needs to community resources or services in future rulemaking.
  • GME Slots: CMS finalized updates for the cap calculations for direct graduate medical education (GME) full-time equivalent positions and is finalizing new flexibilities for GME for rural hospitals participating in rural track programs to promote workforce development in underserved rural areas.
  • Section 1115 Waiver Days: Notably, CMS did not finalize its proposed limitation on counting Section 1115 waiver days in the Medicare DSH calculation and adopted its proposal to use the two most recent years of audited Worksheet S-10 data to distribute uncompensated care payments.

Payment Updates

IPPS Payment Update: CMS finalized a 4.3 percent increase (compared to a 2.5 increase in FY 2022) in operating payment rates for hospitals that submitted quality data and were meaningful electronic health record (EHR) users. This is an increase from CMS' proposed 3.2 percent update for FY 2023. This increase is due to the use of more recently available data that reflects a market-basket percentage increase of 4.1 percent, reduced by a 0.3 percentage point productivity adjustment, and increased by a 0.5 statutory percentage adjustment. The rule gives hospitals the largest payment increase in 25 years.

CMS estimates that IPPS payments will increase by $1.4 billion in FY 2023, compared to FY 2022. This is generally due to:

  • a combined $2.4 billion increase in FY 2023 operating payments, which includes uncompensated care (UC) payments and supplemental payments, and
  • a combined $1 billion decrease due to estimated changes in new technology add-on payments, GME weighting methodology changes, the expiration of the low-volume payment adjustment and FY 2023 capital payments

CMS will return to its historical practice of using the most recent available data for FY 2023 rate-setting, using FY 2021 Medicare Provider Analysis and Review (MedPAR) claims and FY 2020 cost reports for FY 2023 rate-setting.

LTCH Payment Update: CMS estimates that the aggregate LTCH PPS payments will increase by 2.4 percent, or $71 million, as compared to FY 2022. CMS finalized a LTCH PPS standard federal payment rate of $46,432.77.

Wage Index and Geographic Changes

Continuation of the Low-Wage Index Hospital Policy: To help mitigate wage index disparities between high-wage and low-wage hospitals, CMS adopted a policy in the FY 2020 IPPS/LTCH PPS rule to increase wage index values for certain hospitals with low-wage index values in the lower 25th percentile, doing so in a budget-neutral manner through an adjustment applied to the standardized amounts for all hospitals. For FY 2023, CMS increased the 25th percentile from 0.8401 to 0.8427 based on updated data. CMS acknowledged the U.S. District Court for the District of Columbia's decision in a case finding that the agency did not have the statutory authority to adopt this policy, but similarly explained that the decision only addresses the FY 2020 rule and may still be appealed. Therefore, CMS will continue the low-wage index hospital policy and the related budget neutrality adjustment for FY 2023.

Permanent 5 Percent Cap on Wage Index Decreases: CMS adjusts the IPPS standardized amounts for area differences in hospital wage levels by a factor (established by the Secretary of the U.S. Department of Health and Human Services) reflecting the relative hospital wage level in the geographic area of the hospital compared to the national average hospital wage level, and will update the wage index annually based on a survey of wages and wage-related costs of short-term, acute care hospitals.

In consideration of comments received during the FY 2022 rulemaking cycle, for FY 2023 and subsequent years, CMS finalized applying a 5 percent cap on any decrease to a hospital's wage index from its wage index in the prior fiscal year, regardless of the circumstances that caused the decline. The cap will be budget-neutral through a national adjustment to the standardized amount every year.

State-Specific Rural Wage Index Floors: CMS is not finalizing its proposal to exclude hospitals that are reclassified from urban to rural areas from the rural floor calculation and from the calculation of the "the wage index for rural areas in the State in which the county is located." This is in response to a district court's decision which ruled in favor of a hospital plaintiff challenging CMS' authority to implement this policy change. Instead, CMS will calculate the rural floor as it was calculated before FY 2020. For FY 2023 and subsequent years, CMS will include the wage data of hospitals that have reclassified from urban to rural in the calculation of the rural floor.

Disproportionate Share Hospital (DSH) Payments

DSH Payment Adjustment and Additional Payment for Uncompensated Care: The general process for deriving estimates and making calculations was finalized, but there were several changes in the actual figures from the proposed to the final rule:

  • CMS increased Factor 1 from $9.949 billion in the proposed rule to $10.461 billion in the final rule. (As in the proposed rule, the agency used essentially the same assumptions and estimates used in prior years to arrive at a DSH amount for 2022. But CMS relied upon the Office of the Actuary June 2022 Medicare DSH estimates in this final rule, rather than the January 2022 estimates that it relied upon in the proposed rule.) While the final Factor 1 is approximately $500 million higher than the proposal, it is still $27 million less than the final Factor 1 for FY 2022.
  • For Factor 2, CMS proposed to use the same data from the CMS actuary to estimate that the ratio of the nationwide uninsured fell from 14 percent to an average of 9.2 percent in 2022 and 2023 (down from 9.6 percent in FY 2022). CMS finalized the uninsured rate at 9.2 percent in Factor 2. (CMS also finalized a proposed technical change in 42 C.F.R. § 412.106(g)(1)(ii), after receiving no comments in response, to reflect the statutory methodology for determining Factor 2 for FYs 2018 onward because the regulation is currently limited "inadvertently" to FYs 2014 through 2017.)
  • As a result, the overall pool of DSH uncompensated care funds increased from $6.538 billion to $6.874 billion between the proposed and final rules, but still decreased by more than $300 million from the $7.192 billion total pool in FY 2022.
  • In response to comments over the last few years that using a single year of data to calculate Factor 3 (distribution of the pool) could lead to variations in payments, CMS finalized its proposals to use FY 2018 Worksheet S-10 data from FY 2018 and 2019 cost reports for Factor 3 for FY 2023 and to start using the three most recent years of audited Worksheet S-10 data starting in FY 2024. CMS also used, as proposed the March 31, 2022, Healthcare Cost Report Information System (HCRIS) update to calculate Factor 3 for the current year.

Policy Change Restricting Inclusion of Section 1115 Waiver Days in Medicaid Fraction for Future Years: CMS proposed to revise the DSH regulation to further limit the inclusion in the Medicaid fraction of the DSH calculation of inpatient days for patients who are made eligible for Medicaid through a Section 1115 expansion waiver. Under the proposal, CMS would revise the regulation to explicitly reflect its interpretation of the language "regarded as" "eligible" for Medicaid to mean patients who receive health insurance authorized by a Section 1115 demonstration or patients who pay for all – or substantially all – of the cost of such health insurance with premium assistance authorized by a Section 1115 demonstration, where state expenditures to provide the health insurance or premium assistance may be matched with funds from Title XIX. However, considering the significant number of comments received, CMS will not move forward with its proposal. CMS, however, expects to revisit this issue in future rulemaking.

Indian Health Services and Tribal Uncompensated Care Costs: For FY 2023 and subsequent years, CMS finalized its proposal to discontinue using low-income insured days to calculate uncompensated care costs for Indian Health Services and tribal hospitals. In recognition of the financial challenges this policy will impose, CMS will establish a new supplemental payment for these hospitals.

COVID-19-Related Changes

Use of FY 2021 Data and Proposed Methodology Modifications for the FY 2023 IPPS and LTCH PPS Rate-Setting: CMS finalized its proposal to the use of FY 2021 data for purposes of the FY 2023 IPPS and LTCH PPS rate-setting but with several modifications to the usual rate-setting methodologies to account for the anticipated decline in COVID-19 hospitalizations of Medicare beneficiaries at IPPS hospitals and LTCHs as compared to FY 2021. First, CMS finalized its proposal to calculate the FY 2023 Medicare Severity Diagnosis Related Groups (MS-DRG) and Medicare Severity-Long Term Care-Diagnosis Related Groups (MS-LTC-DRG) relative weights by initially calculating two sets of relative weights, one including and one excluding COVID-19 claims, and then averaging those two sets of relative weights to calculate the final FY 2023 relative weight values. CMS also finalized its proposal to modify the calculation of the outlier fixed-loss threshold by using charge inflation factors and cost-to-charge ratios using prepandemic data from March 2019 and March 2020. However, CMS modified its initial proposal by calculating two fixed-loss thresholds, one using FY 2021 claims data including COVID-19 cases and one excluding COVID-19 cases, and then averaging those two amounts to determine the final fixed-loss threshold for FY 2023. CMS stated that this revision to its proposed methodology would "better reflect a reasonable estimation of the case mix for FY 2023" and was consistent with the methodology CMS finalized for determining the MS-DRG and MS-LTC-DRG relative weights.

Condition of Participation (CoP) Requirements for Hospitals and Critical Access Hospitals (CAHs) to Report Data Elements to Address any Future Pandemics and Epidemics as Determined by the Secretary: CMS finalized its proposal to revise the hospital and CAH infection prevention and control CoP requirements to continue COVID-19 reporting requirements until April 30, 2024 (unless the Secretary determines an earlier end date). The proposed requirements of this section would apply to local, state and national public health emergencies (PHEs) as declared by the Secretary. In response to comments, CMS reduced the initial proposed scope of data categories for reporting. CMS also withdrew its proposal to establish additional data reporting requirements to address future PHEs related to epidemics and infectious diseases.

Potential Payment Adjustment for N95 Respirators Made Domestically: In response to the comments solicited in the IPPS proposed rule, CMS proposed in the CY 2023 outpatient prospective payment system (OPPS) proposed rule to make a payment adjustment under the OPPS and IPPS for the additional resource costs of domestic National Institute for Occupational Safety and Health (NIOSH)-approved surgical N95 respirators for cost reporting periods beginning on or after Jan. 1, 2023. Under the proposal, payments would be provided biweekly as interim lump sum payments to the hospital and would be reconciled at cost report settlement. CMS also proposes to make a downward adjustment of the OPPS of 0.01 percent to make the policy change budget neutral. But CMS does not propose to make the separate IPPS payment adjustment related to the costs of acquiring domestic respirators budget neutral, explaining with respect to the IPPS approach that it seeks "[t]o further support the strategic policy goal of sustaining a level of supply resilience for NIOSH-approved surgical N95 respirators that is critical to protect the health and safety of personnel and patients in a public health emergency."

MS-DRG Changes

New Deadline for MS-DRG Requests: CMS is required by statute to adjust the DRG classifications and relative weights at least annually to reflect changes in treatment patterns, technology and any other factors that may change the relative use of hospital resources. Providers and other stakeholders can submit MS-DRG change requests for CMS to consider in the annual rate setting process. In recent years, CMS has updated the deadline to request MS-DRG changes to allow for more review time. For FY 2023, CMS maintained the deadline of Nov. 1 of each year. Beginning with FY 2024, CMS will change the deadline to request MS-DRG changes to Oct. 20 of each year to allow additional time for review and evaluation. CMS will also change the submission process by implementing a new electronic intake system, the Medicare Electronic Application Request Information SystemTM (MEARISTM). Moving forward, CMS will only accept change requests submitted via MEARISTM and will no longer accept such requests sent via email.

MS-DRG Classification Changes: The current MS-DRGs provide up to three levels of severity for a particular condition based on a complication or comorbidity (CC) or a major complication or comorbidity (MCC). In FY 2021, CMS finalized a proposal to apply expanded three-way severity split criteria. CMS believes that using these criteria would better reflect resource stratification and avoid low volume counts for the non-CC level MS-DRGs. In FY 2022, CMS finalized a delay in implementing this proposal because of the PHE. For FY 2023, CMS finalized their proposal to further delay the implementation of the three-way split criteria because of the magnitude of the impact during the ongoing PHE until FY 2024 or later. CMS did not propose any new MS-DRGs, and the number remains 767 for FY 2023.

Proposed SDoH Reporting to Improve MS-DRG System: In the proposed rule, CMS sought comments on how reporting social determinants of health (SDoH) diagnosis codes may help improve the MS-DRG system and how the reporting of certain Z codes may improve the agency's ability to recognize severity of illness, complexity of illness and resource use under the MS-DRGs. Effective Oct. 1, 2021, the Centers for Disease Control and Prevention's (CDC) National Center for Health Statistics added 11 new diagnosis codes describing SDoH to provide additional information regarding determinants such as housing, food insecurity and transportation. CMS solicited public comments on how the reporting of SDoH diagnosis codes may improve the ability of the MS-DRG system to recognize the severity of illness, the complexity of service and/or utilization of resources.

Many commenters commended CMS' efforts to encourage reporting of SDOH diagnosis codes. In contrast, others expressed concerns about the administrative burden, lack of standard definitions of SDOH Z codes and unclear patient benefits. CMS also received recommendations such as providing reimbursement incentives for documenting and reporting SDOH Z codes and including new SDOH Z codes for consideration. CMS will consider the comments in future policy development.

New Technology Add-On Payment (NTAP)

Applications for NTAP Approved for FY 2023: CMS received 18 applications under the traditional add-on payment pathway – five applicants withdrew their applications prior to the issuance of the proposed rule. Subsequently, seven applicants withdrew their respective applications, and one did not receive U.S. Food and Drug Administration (FDA) approval by July 1, 2022. CMS approved three technologies under the traditional new technology add-on payment pathway.

CMS received 19 applications for NTAP under the new technology add-on payment alternative pathways. Six applicants withdrew applications prior to the issuance of the proposed rule. Subsequently, five applicants withdrew their respective applications prior to the issuance of this final rule. Two applicants did not meet the July 1 deadline for FDA approval or clearance of the technology; therefore, the technologies were not eligible for consideration for new technology add-on payments for FY 2023. Ultimately, six devices and drugs went through the alternative pathway, and five were approved. CMS also conditionally approved one technology under the alternative pathway for products that received FDA Qualified Infectious Disease Product (QIDP) designation that otherwise meets the alternative pathway criteria but has not yet received FDA approval.

The number of FY 2023 NTAP applications reviewed represents a 64.5 percent decrease over applications reviewed in the FY 2022 final rule, due in part to the 15 withdrawn or ineligible applications.

Status of One-Year Extension of NTAP Add-on Payments: CMS is not extending NTAP for technologies that received a one-year extension in FY 2022. This policy impacted 13 technologies. See Table 11.F. -03 (Page 360 of the display version).

NTAP Applications Online: CMS finalized its proposal to post NTAP applications online starting in FY 2024. Historically, CMS has published tracking forms completed for each device or drug for which an applicant seeks an NTAP. These forms present a high-level overview of the technology and give insight into applications for stakeholders in advance of the proposed rule's publication. CMS will begin publicly posting completed applications and key relevant materials starting with FY 2024, with the exception of cost data, volume data, information in the confidential section of the application and any materials not releasable to the public because of copyright. The applications will not be posted until the release of the FY 2024 proposed rule.

National Drug Codes (NDCs) for Reporting of Therapeutic Agents Eligible for NTAP: CMS proposed national drug codes for reporting therapeutic agents eligible for NTAP. To qualify for NTAP on a case-by-case basis, hospitals must report the assigned ICD-10-PCS code for the eligible drug or device. CMS proposed to use NDCs to identify NTAP-eligible therapeutic agents rather than ICD-10-PCS. This policy was not finalized in light of numerous concerns articulated in the final rule, including the potential increased burden on hospitals and the limited number of hospitals that would likely adopt this change as part of the transition in FY 2023. CMS intends to reconsider this proposal in future rulemaking.

Hospital Quality Reporting Proposed Changes

Reduction of Hospital Payments for Excess Readmissions: CMS finalized its proposal to resume using data related to pneumonia readmissions beginning in FY 2024 that was suppressed from the calculation for prior years, while excluding patients with principal or secondary COVID-19 diagnoses, for the same reasons mentioned in the proposed rule: improved coding practices, decreased COVID-19 admissions and more data on measure specifications. CMS also finalized modifying the technical measure specifications of the six condition or procedure-specific risk-standardized readmission measures to include a covariate adjustment for patient history of COVID-19 in the 12 months prior to admission. Finally, CMS stated that it would continue to consider comments on updating the Hospital Readmissions Reduction Program to incorporate provider performance for socially at-risk populations.

Hospital Value-Based Purchasing (VBP) Program: For the FY 2023 program year, CMS is pausing the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) and five Healthcare Associated Infections (HAI) measures. CMS also finalized its scoring and payment methodology for the FY 2023 program year such that hospitals will not receive Total Performance Scores. Instead, CMS will reduce each hospital's base-operating DRG payment amount by 2 percent and assign a value-based incentive payment amount that matches the 2 percent reduction to the base operating DRG payment amount. For FY 2025, CMS finalized its proposals to update the baseline periods for certain measures, including the HCAHPS measure and the five HAI measures.

Hospital-Acquired Condition (HAC) Reduction Program: CMS finalized its proposal to suppress certain measures from the calculation of measure scores and the Total HAC Score, thereby not penalizing any hospital under the HAC Reduction Program for FY 2023, due to the effects of COVID-19. Specifically, CMS will suppress the CMS PSI 90 measure and the five CDC National Healthcare Safety Network (NHSN) HAI measures from the calculation of measure scores and Total HAC Scores for FY 2023. CMS will continue to publicly report measure information for all measures, including suppressed measures. CMS also finalized its proposal to update the measure specifications, including risk-adjust for COVID-19 diagnoses.

Hospital Inpatient Quality Reporting (IQR) Program: For FY 2023, CMS finalized its proposal to adopt 10 new measures – three of which focus on health equity. The measures begin with voluntary reporting periods followed by mandatory reporting periods. CMS is interested in using measures focused on connecting patients with identified social needs to community resources or services in future rulemaking.

  • Hospital Commitment to Health Equity beginning with the Calendar Year (CY) 2023 reporting period/FY 2025 payment determination
  • Screening for Social Drivers of Health begins with voluntary reporting for the CY 2023 reporting period, and mandatory reporting beginning with the CY 2024 reporting period/FY 2026 payment determination
  • Screen Positive Rate for Social Drivers of Health beginning with voluntary reporting for the CY 2023 reporting period, and mandatory reporting beginning with the CY 2024 reporting period/FY 2026 payment determination
  • Cesarean Birth electronic clinical quality measure (eCQM) with inclusion in the measure set beginning with the CY 2023 reporting period/FY 2025 payment determination, and mandatory reporting beginning with the CY 2024 reporting period/FY 2026 payment determination
  • Severe Obstetric Complications eCQM with inclusion in the measure set beginning with the CY 2023 reporting period/FY 2025 payment determination, and mandatory reporting beginning with the CY 2024 reporting period/FY 2026 payment determination
  • Hospital-Harm – Opioid-Related Adverse Events eCQM beginning with the CY 2024 reporting period/FY 2026 payment determination
  • Global Malnutrition Composite Score eCQM beginning with the CY 2024 reporting period/FY 2026 payment determination
  • Hospital-Level, Risk-Standardized Patient-Reported Outcomes Performance Measure Following Elective Primary Total Hip Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) beginning with two voluntary periods, followed by mandatory reporting for the reporting period, which runs from July 1, 2025, through June 30, 2026, impacting the FY 2028 payment determination
  • Medicare Spending Per Beneficiary (MSPB) Hospital beginning with the FY 2024 payment determination
  • Hospital-Level Risk-Standardized Complication Rate (RSCR) Following Elective Primary THA/TKA, beginning with the FY 2024 payment determination

For FY 2023, CMS is also refining two current measures starting with the FY 2024 payment determination:

  • Hospital‐Level, Risk‐Standardized Payment Associated with an Episode-of-Care for Primary Elective THA/TKA, and
  • Excess Days in Acute Care (EDAC) After Hospitalization for Acute Myocardial Infarction (AMI)

CMS also finalized changes to the existing eCQM policies. Beginning with the FY 2025 payment determination, CMS is increasing the submission requirement from 75 percent to 100 percent validation of medical record requests to successfully complete eCQM validation. For the FY 2026 payment determination (CY 2024 reporting period), CMS will increase eCQM reporting from four to six eCQMs. Additionally, CMS is removing the zero-denominator declaration and case threshold exemptions for hybrid measures.

PPS-Exempt Cancer Hospital Quality Reporting ProgramCMS finalized its proposal to adopt and codify a patient safety exception for the measure removal policy to align with the measure removal policies adopted in other programs such as the Hospital Inpatient Quality Reporting (IQR) Program. CMS also finalized its proposal to begin the public display of four End-of-Life measures, but with modification. Public display would begin with FY 2025 data, which corresponds to data collected from July 1, 2022, through June 30, 2023, to provide hospitals with enough time to review their confidential reports. CMS also finalized beginning public display of the 30-Day Unplanned Readmissions for Cancer Patients measures beginning with FY 2024 data.

Medicare Promoting Interoperability (PI) Program: CMS finalized several changes to the PI program including, making mandatory and expanding the Electronic Prescribing Objective's Query of Prescription Drug Monitoring Program measure; adding a new Enabling Exchange under the Trusted Exchange Framework and Common Agreement measure under the Health Information Exchange Objective as a yes/no attestation measure as an optional alternative to the three existing measures; and adding a new Antimicrobial Use and Resistance Surveillance measure and require its reporting under the Public Health and Clinical Data Exchange Objective, among other measures.

Medical Education Proposed Changes

Changes to Graduate Medical Education (GME) Payments Based on Litigation: The U.S. District Court for the District of Columbia struck down CMS' method of calculating direct GME payments to teaching hospitals when those hospitals' weighted full-time equivalent (FTE) resident counts exceed their direct GME FTE cap. In the case, the court ordered CMS to recalculate reimbursement owed, holding that CMS' regulation impermissibly modified the statutory weighting factors.

Accordingly, CMS finalized that effective for cost-reporting periods beginning on or after Oct. 1, 2022, if the hospital's number of weighted FTE residents exceeds the FTE cap, the weighted FTE count is adjusted to equal the FTE cap. If the number of weighted FTE residents does not exceed that cap, then the allowable weighted FTE count for Direct Graduate Medical Education (DGME) payment is the actual weighted FTE count. The rule was also established retroactively to Oct. 1, 2001, which means that hospitals with open or reopenable cost reports may take advantage of the adjustment. However, CMS noted that the new rule is "not a basis for reopening a CMS or contractor determination" and makes clear that even though the rule is being given retroactive effect, the agency will not reopen closed cost reports.

Medicare GME Affiliation Agreements Within Certain Rural Track FTE Limitations: CMS finalized its proposal to allow certain urban and rural hospitals participating in a rural training program to enter into a "Rural Track Medicare GME Affiliation Agreement" to aggregate their rural track FTE limitations, effective for the academic year beginning July 1, 2023.

Requests for Information (RFIs)

Maternal Health Quality Designation and Equity RFI: CMS finalized its proposal to establish the first-ever publicly reported hospital quality designation focused on maternal health, also referred to as a "birthing friendly" designation. The designation would apply to a hospital that reports "Yes" to both questions in the Maternal Morbidity Structural Measure, reporting that the hospital participated in a national or statewide quality collaborative and implemented all recommended interventions. The reporting period for the measure began in October 2021, and hospitals submitted data for the first time in May 2022. CMS plans to post measure data for October-December 2021 on the Care Compare website in fall 2022 and post initial results for the hospital designation beginning in fall 2023.

CMS also received ideas on addressing the maternal health crisis through policies, programs, quality measures and conditions of participation. CMS will consider feedback for future rulemaking.

Overarching Principles for Measuring Healthcare Quality Disparities Across Quality Programs RFI: CMS sought public input on establishing policies to measure healthcare quality disparities across CMS quality programs. The agency received numerous comments in support of this effort and suggestions as to the best avenues to invest resources. CMS will consider these comments and engage interested parties in future rulemaking.

Climate Change RFI: CMS sought comments on how hospitals, nursing homes, hospices, home health agencies and other providers can better prepare for climate change and what CMS can do to support these efforts. The agency received numerous comments in support of this effort and suggestions as to the best avenues to invest resources. CMS will consider these comments and engage interested parties in future rulemaking.

Trusted Exchange Framework and Common Agreement RFI: Last year, the Office of the National Coordinator for Health Information Technology released the Trusted Exchange Framework and Common Agreement (TEFCA). CMS added a new Enabling Exchange Under TEFCA measure in the Medicare Promoting Interoperability Program to further the work being done under TEFCA. This measure provides eligible hospitals and CAHs with the opportunity to earn credit for the Health Information Exchange objective if they are a signatory to a "framework agreement," as that term is defined in the Common Agreement, and meet other exchange requirements. Beyond this measure, CMS is considering different ways that available CMS policy and program levers can advance information exchange under TEFCA.

Classification of Rare Diseases: CMS requested comments on issues related to the classification of rare diseases represented by low volumes in the MS-DRG claims data. While no proposals were issued, the agency acknowledges that comments received will be considered as CMS explores mechanisms to address payment concerns for patients with rare diseases and conditions.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.

Related Insights