April 12, 2023

CMS Proposes Policies to Improve Patient Safety and Promote Health Equity Thursday, May 4, 2:00 – 3:00 p.m. CST

On April 10, 2023 the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule for inpatient and long-term care hospitals that builds on the Biden-Harris Administration’s key priorities to advance health equity and support underserved communities. As required by statute, the fiscal year (FY) 2024 inpatient prospective payment system (IPPS) and long-term care hospital prospective payment system (LTCH PPS) rule updates Medicare payments and policies for hospitals. The rule would also adopt hospital quality measures to foster safety, equity, and reduce preventable harm in the hospital setting. CMS is proposing to recognize homelessness as an indicator of increased resource utilization in the acute inpatient hospital setting, which may result in higher payment for certain hospital stays. This action aligns with the Administration’s goal of providing support to historically underserved and under-resourced communities.

“CMS is helping to build a resilient health care system that promotes good outcomes, patient safety, equity, and accessibility for everyone,” said CMS Administrator Chiquita Brooks-LaSure. “This proposed rule reflects our person-centric approach to better measure health care quality and safety in hospitals to reduce preventable harm and our commitment to ensure that people with Medicare in rural and underserved areas have improved access to high-quality care.”

For acute care hospitals paid under the IPPS that successfully participate in the Hospital Inpatient Quality Reporting program and are meaningful electronic health record users, the proposed increase in operating payment rates for FY 2024 is projected to be 2.8%. This reflects an FY 2024 projected to be 2.8%. This reflects an FY2024 projected hospital market basket update of 3.0%, reduced by a projected 0.2 percentage point productivity adjustment. For FY 2024, CMS expects the proposed increase in operating and capital IPPS payment rates would generally increase hospital payments by $3.3 billion. For LTCHs, CMS proposed to increase the LTCH PPS standard Federal payment rate by 2.9%. Overall, CMS expects LTCH payments under the dual-rate payment system to decrease by 0.9%, or $24 million, primarily due to a projected decrease in high-cost outlier payments in FY 2024 compared to FY 2023.

“With this proposed rule, CMS is more accurately paying hospitals and recognizing for the first time that homelessness, as a social determinant of health, also impacts resource utilization,” said CMS Deputy Administrator Dr. Meena Seshamani. “Creating incentives for hospitals to provide excellent care for underserved populations lays the foundation for a health system that delivers higher-quality, more equitable, and sager care for everyone.”

Advancing Health Equity

CMS is proposing to make health equity adjustments in the Hospital Value-Based Purchasing Program by providing incentives to hospitals to perform well on existing measures and to those who care for high proportions of underserved individuals, as defined by dual eligibility status.  This builds on previous efforts to advance health equity through the finalized health equity adjustment in the Medicare Shared Savings Program and finalized policies in Medicare Advantage and Part D Star Ratings Program. CMS also proposes to recognize the higher costs that hospitals incur when treating people experiencing homelessness, when hospitals report social determinants of health codes on claims. In addition, CMS is requesting comment on how to further support safety-net hospitals.

CMS is also proposing that rural emergency hospitals could be designated as graduate medical education training sites. As a result, more medical residents would be able to train in rural settings, which can help address workforce shortages in these communities. This proposal builds on other policies to support access to care in rural and other underserved communities.

Promoting Patient Safety

Consistent with the CMS National Quality Strategy and the HHS National Healthcare System Action Alliance to Advance Patient Safety goals to promote the highest quality outcomes and safest care for all individuals, the proposed set of quality measures aims to foster safety and equity, and to reduce preventable harm in hospital settings. Among this set is a proposal to measure the rate of patients and residents in long-term care hospitals who are up to date on their COVID-19 vaccinations and new, additional measures for screenings for cancer and social drivers of health.

For a fact sheet on the proposed payment rule, visit: https://www.cms.gov/newsroom/fact-sheets/fy-2024-hospital-inpatient-prospective-payment-system-ipps-and-long-term-care-hospital-prospective

The FY 2024 IPPS/LTCH PPS proposed rule has a 60-day comment period. The proposed rule can be downloaded from the Federal Register at: https://www.federalregister.gov/public-inspection/2023-07389/medicare-program-proposed-hospital-inpatient-prospective-payment-systems-for-acute-care-hospitals

April 4, 2023

CMS Releases Intermediate Policy on RHC Rurality Determinations

The Centers for Medicare & Medicaid Services (CMS) officially released the interim process that will be used in determining RHC rural location determinations following the Census Bureau’s definition changes.

The interim process is as follows:

RHC applicants or relocating RHCs will meet the rural location requirement if the physical address is “non-urbanized” or in an “urban cluster” per the 2010 Census Bureau Data, OR if the physical address is not an urban area per the 2020 Census Bureau Data

Both 2010 and 2020 Census Bureau data can be found here.

March 24, 2023

HHS Releases Initial Guidance for Historic Medicare Drug Price Negotiation Program for Price Applicability Year 2026

For the first time in history, Medicare will have the ability to negotiate lower prescription drug prices because of the Inflation Reduction Act, President Biden’s historic law which lowers health care and prescription drug costs. Today, the U.S. Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), issued initial guidance detailing the requirements and parameters—including requests for public comment— on key elements of the new Medicare Drug Price Negotiation Program for 2026, the first year the negotiated prices will apply. Alongside other provisions in the new drug law, the Medicare Drug Price Negotiation Program will strengthen Medicare’s ability to serve people currently in Medicare and for generations to come.

“For far too long, millions of Americans have had to choose between their prescription drugs and other monthly expenses,” said HHS Secretary Xavier Becerra. “President Biden is leading the fight to lower the cost of prescription drugs – and with the Inflation Reduction Act, we’re making historic progress. Through the Medicare Drug Price Negotiation Program, we will make sure seniors get a fair price on Medicare’s costliest prescription drugs, promote competition in the market, and ensure Medicare is strong for beneficiaries today and into the future.”

“Drug price negotiation is a critical piece of how this historic law improves the Medicare program,” said CMS Administrator Chiquita Brooks-LaSure. “By considering factors such as clinical benefit and unmet medical need, drug price negotiation intends to increase access to innovative treatments for people with Medicare.”

The Biden-Harris Administration has made lowering high prescription drug costs and improving access to innovative therapies a key priority. CMS is releasing its initial guidance for how Medicare intends to use its new authority to effectively negotiate with drug companies for lower prices on selected high-cost drugs. The negotiation process will focus on key questions, including but not limited to the selected drug’s clinical benefit, the extent to which it fulfills an unmet medical need, and its impact on people who rely on Medicare. As a result of negotiation, people with Medicare will have access to innovative, life-saving treatments at costs that will be lower for both them and Medicare.

“Negotiation is a powerful tool that will drive drug companies to innovate to stay competitive, fostering the development of new therapies and delivery methods for the treatments people need,” said Meena Seshamani, M.D., Ph.D., CMS Deputy Administrator and Director of the Center for Medicare. “This initial guidance is the next step in the extensive engagement CMS has had to date with interested parties, and we look forward to continuing to receive comment on key policy areas and engage with the public as we implement the Negotiation Program.”

This initial guidance is one of a number of steps CMS laid out in the Medicare Drug Price Negotiation Program timeline for the first year of negotiation. The initial program guidance details the requirements and procedures for implementing the new Negotiation Program for the first set of negotiations, which will occur during 2023 and 2024 and result in prices effective in 2026. Key dates for implementation include:

• By September 1, 2023, CMS will publish the first 10 Medicare Part D drugs selected for initial price applicability year 2026 under the Medicare Drug Price Negotiation Program.
• The negotiated maximum fair prices for these drugs will be published by September 1, 2024 and prices will be in effect starting January 1, 2026.
• In future years, CMS will select for negotiation up to 15 more Part D drugs for 2027, up to 15 more Part B or Part D drugs for 2028, and up to 20 more Part B or Part D drugs for each year after that, as outlined in the Inflation Reduction Act.
• CMS is seeking comment on several key elements in today’s guidance. Comments received by April 14, 2023, will be considered for revised guidance. CMS anticipates issuing revised guidance for the first year of negotiation in Summer 2023.
• CMS is committed to collaborating and engaging with the public in the implementation of the Inflation Reduction Act. CMS is working closely with patients and consumers, Medicare Part D plan sponsors and Medicare Advantage organizations, drug companies, hospitals and health care providers, wholesalers, pharmacies, and others. Public feedback contributes to the success of the Medicare Drug Price Negotiation Program, and this initial guidance is one tool, among many, that CMS will use to ensure interested parties know when and how they can make their voices heard on implementation of this new drug law.

View a fact sheet on the Medicare Drug Price Negotiation Program Initial Guidance

Read the Medicare Drug Price Negotiation Program Initial Guidance