Along with updating payment rates, CMS sought to support the innovation of antimicrobial products.
CMS expanded pathways for certain antimicrobial products and sought to increase quality efforts surrounding interoperability in the fiscal year (FY) 2021 inpatient prospective payment system (IPPS) and long-term care hospital prospective payment system (LTCH PPS) final rule. The final rule, which will publish in the Federal Register on September 18, 2020, also updated payment rates for both payment systems.
Antimicrobial products add-on payment. In last year’s IPPS/LTCH PPS final rule, CMS established an alternative inpatient new technology add-on payment pathway for antimicrobial products that received the FDA’s Qualified Infectious Disease Product (QIDP) designation in response to concerns regarding antimicrobial resistance. In the FY 2021 final rule, CMS finalized its proposal to expand the alternative new technology add-on payment pathway for QIDPs to include products approved through the Limited Population Pathway for Antibacterial and Antifungal Drugs (LPAD pathway). From FY 2022 on, for applications received for new technology add-on payments, if an antimicrobial product is approved through the LPAD pathway, it will be considered new and not substantially similar to an existing technology for the purposes of the new technology add-on payment under the IPPS. The product will not need to meet the requirement that it represent an advance that substantially improves, relative to technologies previously available, the diagnosis or treatment of Medicare beneficiaries.
Under current policy, a new technology must receive FDA marketing authorization by July 1 to be considered in the final rule to allow complete review and consideration of all applicable criteria. After consideration of public comments, CMS finalized its proposal to provide conditional new technology add-on payment approvals for products that do not receive FDA approval but otherwise meet applicable add-on payment criteria.
Interoperability. To increase stability, reduce the burden on eligible hospitals, and clarify certain existing policies, CMS finalized changes to the Medicare Promoting Interoperability Program. CMS finalized changes to establish an EHR reporting period of a minimum of any continuous 90-day period in CY 2022 for new and returning participants attesting to the Medicare Promoting Interoperability Program. It also finalized its proposal to continue the Query or Prescription Drug Monitoring Program (PDMP) measure as optional and worth five bonus points in CY 2021. Additionally, the final rule adopted changes to align with the Hospital IQR Program, including increasing the number of quarters hospitals are required to report electronic clinical quality measures (eCQM) data and publicly reporting eCQM performance data for the first time.
Hospital Inpatient Quality Reporting (IQR) Program. Under the IQR program, to receive the full annual percentage increase that would otherwise apply to the standardized amount applicable to that FY’s discharges, hospitals are required to report data on measures selected by CMS for that fiscal year. CMS finalized proposals related to the reporting, submission, and public display requirements for eCQMs. It finalized its proposal to expand the requirement to use electronic health records technology certified to the 2015 Edition for submitting data for all hybrid measures in the IQR program. CMS also finalized proposals to streamline the validation processes under the IQR program.
Readmissions. CMS finalized its proposal to make changes to policies under the Hospital Readmissions Reduction Program. In the FY 2021 IPPS/LTCH PPS final rule, CMS updated the following policies: (1) to automatically adopt applicable periods beginning with the FY 2023 program year and all subsequent program years; and (2) to update the definition of applicable period at 42 C.F.R. 412.152 to align with the policy.
Low wage index hospital policy. The FY 2020 IPPS/LTCH PPS final rule adopted a policy to provide an opportunity for certain low wage index hospitals to increase employee compensation by increasing wage index values. For FY 2021, CMS will continue the low wage index hospital policy and apply it in a budget neutral manner by applying an adjustment to the standardized amounts.
Uncompensated care. Section 3133 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) modified the Medicare disproportionate share hospital (DSH) payment methodology beginning in FY 2014. For FY 2021, CMS updated estimates of the three factors used to determine uncompensated care payments.
Payment rates. For general acute care hospitals paid under IPPS that successfully participate in the Hospital Inpatient Quality Reporting (IQR) Program and are meaningful electronic health record (HER) users, the increase in operating payment rates is approximately 2.9 percent, reflecting a market basket update of 2.4 percent and a 0.0 percentage point productivity adjustment. It also reflects a +0.5 percentage point adjustment required by legislation.
LTCH PPS payments for FY 2021 for discharges paid using the standard LTCH payment rate are expected by 2.2 percent, primarily due to the annual standard federal rate update for FY 2021 of 2.3 percent.
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