CMS Rule: Rural Hospital Workforce, IPPS and LTCH Payment Changes

On Sunday, the Centers for Medicare & Medicaid Services (CMS) issued two proposed rules for inpatient and long-term care hospitals. The first aims to fund medical residency positions in hospitals in rural and underserved communities in order to address workforce shortages in those areas and would require hospitals to report COVID-19 vaccination rates among their workers in order to qualify for this program.

The other proposed rule will effect rates for the Medicare Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospitals (LTCH) and will repeal the requirement that hospitals report their median payor-specific negotiated rates for inpatient services.

From Health and Human Services Secretary Xavier Becerra:

Hospitals are often the backbone of rural communities – but the COVID-19 pandemic has hit rural hospitals hard, and too many are struggling to stay afloat. This rule will give hospitals more relief and additional tools to care for COVID-19 patients and it will also bolster the health care workforce in rural and underserved communities. The Biden Administration is committed to expanding health equity in communities across the country, especially in rural America.

According to a press release from the American Association of Medical Colleges (AAMC), the rule creates 1,000 new residency slots available over a five-year period beginning in fiscal year 2023. It also removes the “separately accredited” requirement for rural training tracks, which would allow urban hospitals to partner with rural hospitals with any accredited training program. Finally, CMS proposes to permit certain hospitals to reset their Per Resident Amount for direct graduate medical education payments and establish a new cap for those payments and indirect medical education.

The proposed policies in the second rule regarding the IPPS and LTCH PPS also seeks to close health care equity gaps by expanding access to diagnostics and therapies during the COVID-19 public health emergency “and beyond”, according to a CMS fact sheet. The rule updates Medicare fee-for-service payment rates and policies for inpatient hospitals beginning in fiscal year 2022.

From American Hospital Association (AHA) Executive Vice President Tom Nickels, via RAC Monitor:

Based on our initial review, we are very pleased CMS is proposing to repeal the requirement that hospitals and health systems disclose privately negotiated contract terms with payors on the Medicare cost report. We have long said that privately negotiated rates take into account any number of unique circumstances between a private payor and a hospital, and their disclosure will not further CMS’s goal of paying market rates that reflect the cost of delivering care. We once again urge the agency to focus on transparency efforts that help patients access their specific financial information based on their coverage and care.

Full Health and Human Services press release from Black PR Wire.