CMS worked 'to keep hospital payments as steady as possible' in inpatient rule
While hospitals must still disclose their negotiated rates with payers, they no longer have to submit cost reports to CMS based on those rates.
Photo by Helen King/Getty Images
Healthcare experts, such as Caitlin Sheetz, director and head of Analytics for ADVI, are still combing through everything in the Center for Medicare and Medicaid Services' Hospital Inpatient Prospective Payment System and Long Term Care Hospital proposed rule released last week.
There's much for hospitals to like, as the inpatient rule stabilizes reporting requirements to pre-COVID-19 levels and extends add-on payments for 14 technologies.
"Everybody for the most part is pleased," Sheetz said, though it's still too early to know what hospitals will be submitting as comments to CMS, due June 28.
One aspect that has gotten the attention of providers is CMS's repeal of the reporting mandate having to do with hospitals disclosing their privately-negotiated rates with insurers.
Providers loathe the mandate, which went into effect on January 1, as do insurers. Hospitals sued the Department of Health and Human Services over the requirement, and lost. They appealed and lost that too. The U.S. Court of Appeals handed up the ruling on December 29, 2020, days before they were mandated to disclose their standard charges, including payer-specific negotiated rates, for 300 shoppable services. The only leeway hospitals received was a year's delay on when the 2019 rule would go into effect: from January 1, 2020 to January 1, 2021.
The inpatient rule released last week repealed the reporting requirement of the price transparency rule. While hospitals must still disclose their rates with payers, they are no longer mandated to submit cost reports to CMS based on those rates.
CMS's wording on the repeal of the DRG relative weight methodology makes it likely this will remain in effect beyond the public health emergency, according to Sheetz.
WHY THIS MATTERS
Without last week's rule, hospitals would have needed to submit data beginning this year. CMS would collect the data for a few years and, starting in 2024, use the cost information to set the relative rate for the Inpatient Prospective Payment System, according to Sheetz.
Last week's ruling also determined that 2019 data would be used to set rates, as opposed to more recent claims.
"On the whole, 2019 claims more accurately reflect the 2022 case mix," Sheetz said.
This is because, during the height of the pandemic in the U.S., some claims decreased 40-50% year-over-year, which would impact rate setting.
Hospitals are "pretty satisfied" with this, she said, as opposed to the confusion that using more recent claims would present.
THE LARGER TREND
CMS used the rule to propose policies to help reduce the burden to hospitals due to the stress of the public health emergency, Sheetz said.
Making these changes deviates from CMS standard policies, she said.
Also, extending the New Technology Add-on Payment for 14 products that would have expired is a big deviation.
"That extension speaks," she said, "to wanting to keep hospital payments as steady as possible."
Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com
