AHA Comments on Inpatient PPS Proposed Rule for FY 2022

June 28, 2021

On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, our clinician partners—including more than 270,000 affiliated physicians, 2 million nurses and other caregivers—and the 43,000 health care leaders who belong to our professional membership groups, the American Hospital Association appreciates the opportunity to comment on the Centers for Medicare & Medicaid Services’ (CMS) hospital inpatient prospective payment system (PPS) proposed rule for fiscal year (FY) 2022. We are submitting separate comments on the agency’s proposed changes to the long-term care hospital PPS.

We first thank CMS for its ongoing support for our nation’s hospitals, providers and patients during the COVID-19 public health pandemic. The AHA appreciates the continued support, assistance and flexibility that CMS is providing to our members so that they are best positioned to care for their patients and communities. We look forward to continuing to work with you to protect the health of our nation.

We support a number of the inpatient PPS proposed rule’s provisions, including the repeal of market-based Medicare severity diagnosis related group (MS-DRG) data collection and the use of FY 2019 data in rate-setting. At the same time, we have concerns with other proposals. In particular, we are concerned about proposals for organ acquisition payments and urge CMS not to finalize them. We also strongly urge CMS to modify its proposals in distributing residency slots as part of the graduate medical education (GME) program. Finally, we have concerns about several of the agency’s proposed new measures for the inpatient quality reporting program. A summary of our key recommendations follows.

“Market-based” MS-DRG Data Collection and Weight Calculation

CMS proposes to repeal the requirements that hospitals include on their Medicare cost report what the agency calls “market-based payment rate information.” Specifically, hospitals would no longer be required to report, by MS-DRG, the median payer-specific negotiated charge for Medicare Advantage (MA) organizations. The agency also proposes to repeal the requirement that the information be used to calculate new market-based MS-DRG relative weights. We strongly support repealing these requirements and thank the agency for its actions.

Organ Acquisition Payments

The Medicare program reimburses transplant hospitals for organ acquisition costs, the transplant surgery, inpatient and post-transplant costs for Medicare recipients. CMS proposes to clarify, modify and codify into regulation the activities related to organ acquisition payments, in addition to proposing new requirements. The AHA is concerned with CMS’ proposals related to Medicare usable organs and organ acquisition payments. Specifically, organ tracking capabilities simply do not exist to the degree necessary to obtain the information CMS would require. As such, if enacted, this proposed policy could severely limit patient access to organ transplantations. Thus, we strongly urge CMS to withdraw its proposal and instead engage with stakeholders in developing any modifications to organ acquisition payment methodologies.

Graduate Medical Education Program

CMS proposes to implement several provisions of the Consolidated Appropriations Act of 2021 that affect Medicare direct GME and indirect medical education (IME) payments to teaching hospitals. The AHA is very concerned about CMS’ proposed method to award a maximum of one full-time equivalent (FTE) residency slot per hospital per year and its proposal to prioritize slot distribution by health professional shortage area (HPSA) scores. Such a limitation is unworkable and unproductive and such a prioritization method reflects neither statutory intent nor the reality of teaching hospital service areas. Instead, we urge CMS to provide sufficient FTE slots as appropriate for the length of a residency program and to implement an alternative method for prioritization, which reflects statutory intent in a streamlined and simplified manner. We also have concerns with other proposals, including the criteria to determine hospitals that serve HPSAs.

Hospital Quality and Value-based Programs

The AHA applauds CMS for recognizing the unprecedented impact of the COVID-19 public health emergency (PHE) on its hospital quality measurement and value programs. We support CMS’ proposed measure suppression policy and most of the proposed program-specific measure suppressions for FYs 2022 and 2023. The AHA also shares CMS’ commitment to advancing health equity and values the opportunity to respond to the agency’s requests for information (RFIs) on this vitally important priority. However, we have concerns about several of the agency’s proposed new measures for the inpatient quality reporting program and recommend that CMS reconsider their adoption.

We appreciate your consideration of these issues. Our detailed comments are attached.

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