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AAMC Comments on Payment and Quality Proposals in FY 2022 IPPS Proposed Rule

July 1, 2021

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CONTACTS
Andrew Amari, Hospital Policy and Regulatory Specialist
Phoebe Ramsey, Sr. Regulatory Analyst, Quality & Payment Policy

The AAMC submitted comments on June 28 about the Centers for Medicare and Medicaid Services’ (CMS’) Fiscal Year (FY) 2022 Inpatient Prospective Payment System (IPPS) proposed rule. In addition to its comments on the hospital payment and quality provisions detailed below, the AAMC’s letter addressed several graduate medical education proposals included in the rule that implement three sections of the Consolidated Appropriations Act, 2021 (Secs. 126, 127, and 131, P.L. 116-260), including the distribution of new Medicare-supported graduate medical education slots [refer to related story].

Below are highlights of the AAMC’s comments on the hospital quality and payment provisions in the proposed rule:

Hospital Payment Provisions

  • Data Source for FY 2022 IPPS Ratesetting: CMS solicits comments on whether FY 2019 or FY 2020 data sources are the best available data to use for the FY 2022 ratesetting. The AAMC supports the use of FY 2019 data as a better overall approximation of the inpatient experience in FY 2022 compared to the FY 2020 data impacted by the COVID-19.   
  • Organ Acquisition: CMS proposes to revise and codify its Medicare usable organ policy to count only organs transplanted into Medicare beneficiaries in its calculation of Medicare’s share of organ acquisition costs. The AAMC urges CMS not to finalize the organ acquisition proposals and instead engage all stakeholders to evaluate the impact of these proposed changes to ensure continued availability and access to scarce organs.
  • Disproportionate Share Hospital and Uncompensated Care Payments (UCPs): CMS proposes to distribute approximately $7.6 billion in UCPs to disproportionate share hospitals in FY 2022 — a decrease of roughly $660 million from FY 2021, largely due to the lower Factor 1 amount (proposed as $10.573 billion for FY 2022) in the UCP methodology. The AAMC requests that CMS provide clarification of how the Office of the Actuary determined the “other” factor included in the calculation of Factor 1 so that stakeholders can adequately understand and assess the appropriateness of both the Factor 1 amount and the considerably lower UCP pool proposed for FY 2022.
  • Medicaid Fraction: CMS proposes to revise its regulations to explicitly state that a patient would be included in the numerator of the Medicaid fraction only if the patient is eligible for inpatient hospital services under an approved state Medicaid plan that includes coverage for inpatient hospital care on that day or directly receives inpatient hospital insurance cover on that day under an 1115 waiver. The AAMC urges CMS not to finalize this proposal, which would exclude certain Medicaid beneficiaries receiving coverage under an 1115 waiver from the hospital’s Medicaid fraction calculation. 
  • Wage Index: CMS proposes to continue its policy to raise wage indexes of low-wage hospitals and is also soliciting comments on whether it would be appropriate to continue to apply a transition to the FY 2022 wage index for hospitals negatively impacted by the agency’s adoption of the redelineations in OMB Bulletin 18-04. The AAMC supports the continuation of the low wage index policy and also recommends that CMS extend the 5% transitional cap in a budget-neutral manner to all wage index changes for all hospitals for FY 2022. Additionally, the AAMC asks CMS to consider excluding wage data impacted by the COVID-19 public health emergency in future calculations of the wage index.
  • Collection of Medicare Advantage Negotiated Rates: CMS proposes to repeal the requirement that hospitals report on their Medicare cost reports the median payer-specific negotiated charge that it has negotiated with all its Medicare Advantage organizations, by Medicare Severity Diagnosis Related Groups. The AAMC supports the repeal of this policy and asks CMS to finalize this proposal.
  • Medicaid Enrollment of Medicare-Enrolled Providers / Suppliers: CMS proposes to require Medicaid agencies to enroll Medicare-enrolled providers and suppliers in the Medicaid program to determine Medicaid’s cost-sharing liability for beneficiaries eligible for both Medicare and Medicaid. The AAMC supports this proposal and urges CMS to finalize it, as it would facilitate providers’ attempts to ascertain a state’s Medicaid liability for dual-eligible beneficiaries’ cost sharing. 

Hospital Quality Provisions

  • Request for Information — Closing the Health Equity Gap in CMS Hospital Quality Programs: CMS requests feedback on making the reporting of health disparities based on social risk factors more comprehensive and actionable for hospitals, clinicians, and patients. The AAMC applauds CMS for its efforts to inform future proposals to address inequities in outcomes in its hospital quality programs. CMS should undertake a thoughtful and considered approach working with stakeholders to improve data collection to better measure and analyze disparities in a manner that builds an evidence-based, valid, and reliable framework toward provider accountability for health equity.
  • Future Stratification of Quality Measures by Race and Ethnicity: CMS seeks feedback on the potential future application of an algorithm to indirectly estimate race and ethnicity to support stratification of quality measures for hospital-level disparity reporting, building off current confidential disparity reporting provided to hospitals for readmissions measures using dual eligibility. The AAMC urges CMS not to use indirectly estimated race and ethnicity data due to concerns with accuracy and actionability of such data. Instead, CMS should invest in data collection improvements that standardize and use data already collected by hospitals and encourage the reporting and use of actionable social risk factor data instead of using indirect estimates of race and ethnicity data to stratify measure reporting. Race and ethnicity themselves are not risk factors and reliance on immutable characteristics alone is not informative for intervention.
  • Improving Demographic Data Collection: CMS seeks feedback on how to improve data collection. The AAMC supports efforts to improve data collection and believes CMS should pursue a policy supporting the collection of standardized multisector risk information to support improved stratification and risk adjustment beyond individual-level demographic data elements. Data collection and systems for social risk factors at both the individual and community level should be used in conjunction to best identify disparities in quality and equity and guide interventions for improvement.
  • Potential Creation of a Hospital Equity Score: CMS seeks feedback on the potential development of a Hospital Equity Score similar to (and built from) the Health Equity Summary Score recently developed for Medicare Advantage contracts and plans. The AAMC urges CMS to ensure that measurement of health equity includes and expands on stratified clinical quality measures. CMS should evaluate the development of structural and process measures that will drive improvement for health equity. The agency should also commit to expanding the social risk factors included in measurement that build off advancements in measure science and expanded collection of social risk data.
  • Adoption of Measure Suppression Factors in the Pay-for-Performance Quality Performance Programs to Address Impacts of COVID-19 Public Health Emergency: CMS proposes to adopt a cross-program measure suppression policy, based on four proposed suppression factors, to address the impacts of the current COVID-19 public health emergency on quality performance by hospitals. The AAMC supports this new policy and urges CMS to finalize the suppression factors as proposed in addition to committing to studying the impact of their use. After further study, CMS should adopt revised measure suppression factors for broader applicability to a future national public health emergency.
  • Adoption of New Measures for the Inpatient Quality Reporting (IQR) Program: CMS proposes to adopt five new measures in the IQR program, including a new measure regarding COVID-19 vaccination among health care personnel. The AAMC urges CMS to implement a voluntary reporting period of at least one year to sufficiently address critical vaccine questions, such as timelines for and supplies of potential boosters that impact measure design prior to mandating hospital reporting.
  • Potential Reporting of a Structural Measure to Assess Hospital Leadership Engagement with Health Equity Performance Data: CMS seeks feedback on developing a new structural measure to assess engagement with health equity performance data. The AAMC believes structural measures may be an appropriate first step towards measurement that drives improvement. CMS should engage experts in the development of structural measures as a critical first step to assessing current practices and incentivizing new evidence-based methods that advance collective health equity goals.
  • Request for Information — Advancing Digital Quality Measurement: CMS seeks feedback on topics related to the agency’s goal to transition to digital quality measures (dQMs) by 2025, including a broad definition of dQMs. The AAMC asks CMS to further refine the definition of dQMs to focus first on currently available valid and reliable digital data sources and set clear and specific parameters for what the agency hopes to achieve and what it expects of hospitals in its goal for transitioning to dQMs in the near future.

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