New Final Payment Rules From CMS Signal More to Come

New payment rules include a proposed rule to establish a new provider type Rural Emergency Hospitals (REHs).

We have now reached the second half of the year, with many final rules for Medicare payment yet to come.

Recently, however, the Centers for Medicare & Medicaid Services (CMS) published proposed rules (PPS) for the Calendar Year (CY) 2023 End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) (CMS-1768-P), and for CY 2023 Home Health Prospective Payment System Rate Update and Home Infusion Therapy Services Requirements (CMS-1766-P).

The ESRD PPS provides a bundled, per-treatment payment to ESRD facilities that includes all renal dialysis services furnished for outpatient maintenance dialysis, including drugs and biological products (with the exception of oral-only ESRD drugs until 2025). For 2023, CMS proposes an ESRD PPS base rate is $264.09, which would be an increase of $6.19 to the current base rate of $257.90.

The CY 2023 ESRD PPS proposed rule includes requests for information regarding (1) a potential add-on payment adjustment for certain new renal dialysis drugs and biological products, and (2) health equity issues under the ESRD PPS, with a focus on pediatric dialysis payment. The rule also includes a proposed change to the definition of “oral-only drug” beginning Jan. 1, 2025, along with a proposal to clarify the descriptions of the ESRD PPS functional categories.

The HHA rule proposes routine, statutorily required updates to the home health payment rates for CY 2023. CMS estimates that Medicare payments to HHAs in CY 2023 would decrease in the aggregate by -4.2 percent, or -$810 million compared to CY 2022, based on the proposed policies. This decrease reflects the effects of the proposed 2.9 percent home health payment update percentage ($560 million increase), an estimated 6.9 percent decrease that reflects the effects of the proposed prospective, permanent behavioral assumption adjustment of -7.69 percent ($1.33 billion decrease), and an estimated 0.2 percent decrease that reflects the effects of a proposed update to the fixed-dollar loss ratio (FDL) used in determining outlier payments ($40 million decrease). 

CMS has also published a proposed rule to establish a new provider type — Rural Emergency Hospitals (REHs). These are a new provider type established by the Consolidated Appropriations Act of 2021 to address the growing concern over closures of rural hospitals. The REH designation provides an opportunity for Critical Access Hospitals (CAHs) and certain rural hospitals to avert potential closure and continue to provide essential services for the communities they serve. Conversion to an REH allows for the provision of emergency services, observation care, and additional medical and health outpatient services, if elected by the REH, that do not exceed an annual per patient average of 24 hours. The rule provides an opportunity for CAHs in rural areas to better serve patients.

In response to a recent nationally publicized event, the Federal Office for Civil Rights issued new guidance regarding the HIPAA privacy and security rules. Highlights include that telephone calls are not considered electronic communications and thus are not covered by the Security Rule, and that federal law and regulations protect individuals’ private medical information (known as protected health information or PHI) relating to abortion and other sexual and reproductive health care—making it clear that providers are not required to disclose private medical information to third parties.

Programming Note: Listen to Stanley Nachimson report his RegWatch segment today on Talk Ten Tuesdays at 10 Eastern.