Proposed and Final Rules Dominate Healthcare Ecosystem

Proposed and Final Rules Dominate Healthcare Ecosystem

This is the season for reporting proposed and final payment rules for FY 2024.

After a brief pause during the winter months, the Centers for Medicare & Medicaid Services (CMS) is once again issuing a number of proposed and final regulations for payments in Fiscal Year 2024.   Both the Fee for Service (FFS) Medicare and Medicare Advantage changes are being proposed. 

The Centers for Medicare & Medicaid Services (CMS) published the 2024 Medicare Advantage (Part C) Rate Announcement on March 31.  The key item for our listeners is the revised Medicare Advantage (MA) Risk Adjustment Model.  The rule includes important technical updates, including restructured hierarchal condition categories (HCCs) using the International Classification of Diseases (ICD)-10 classification system (instead of the ICD-9 classification system) and updated underlying FFS data years (from 2014 diagnoses and 2015 expenditures to 2018 diagnoses and 2019 expenditures), as well as revisions focused on conditions that are subject to more coding variation.  This new model will be phased in over three years.  Details of these revisions are included in the Rate Announcement.

In the 2024 Medicare Advantage and Part D Final Rule, CMS clarifies clinical criteria guidelines to ensure people with MA receive access to the same medically necessary care they would receive in traditional Medicare, by requiring that MA plans must comply with national coverage determinations (NCD), local coverage determinations (LCD), and general coverage and benefit conditions included in traditional Medicare regulations. CMS is also finalizing that when coverage criteria are not fully established, MA organizations may create internal coverage criteria based on current evidence in widely used treatment guidelines or clinical literature made publicly available to CMS, enrollees, and providers.

The final rule also streamlines prior authorization requirements. It requires that coordinated care plan prior authorization policies may only be used to confirm the presence of diagnoses or other medical criteria and/or ensure that an item or service is medically necessary; and that plans provide a minimum 90-day transition period when an enrollee currently undergoing treatment switches to a new MA plan, during which the new MA plan may not require prior authorization for the active course of treatment.

We are now in the season for proposed FY2024 Medicare Fee for Service payment and policy rules for institutional provider types.  So far, CMS has published the following:

  1.  Fiscal Year (FY) 2024 Skilled Nursing Facility (SNF) Prospective Payment System Proposed Rule, which would result in a net increase of 3.7 percent, or approximately $1.2 billion, in Medicare Part A payments to SNFs in FY 2024.  CMS is proposing several changes to the ICD-10 code mappings for the SNF case-mix classification system known as patient driven payment model (PDPM). The proposed changes to the ICD-10 code mappings and lists used under PDPM are available on the PDPM website.  CMS is proposing the adoption of four new quality measures, the replacement of one quality measure, and several policy changes in the SNF value-based payment (VBP) program.
  2. Inpatient Psychiatric Facility Prospective Payment System (IPF PPS) for fiscal year (FY) 2024 proposed rule updates the payment rates for IPFs.  CMS has also included proposal to modify regulations to allow hospitals to open and begin billing Medicare for an excluded IPF unit anytime within the cost reporting year, which CMS believes will help increase access to essential inpatient psychiatric services and available beds.
  3. Fiscal Year 2024 Inpatient Rehabilitation Facility Prospective (IRF) Payment System Proposed Rule, proposing to update the IRF PPS payment rates by 3.0 percent based on the proposed IRF market basket update of 3.2 percent less a proposed 0.2 percentage point productivity adjustment.  This proposed rule also proposes to allow hospitals to open a new IRF unit and begin being paid under the IRF PPS at any time during the cost reporting period, with certain reporting conditions.

Yet to come is the 2024 Inpatient Hospital PPS and LTC Hospital PPS Rule.  It should be published shortly.

Programming note: Listen to Stanley Nachimson’s live RegWatch report today on Talk Ten Tuesdays, 10 Eastern with Dr. Erica Remer and Chuck Buck.

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