IPPS 2023 Proposed Rule
| On April 18, 2022, the Centers for Medicare & Medicaid Services (“CMS”) published its annual proposed rule for the federal fiscal year (“FY”) 2023 inpatient prospective payment system (“IPPS”) and long-term care hospital (“LTCH”) payment system. There are several changes that impact graduate medical education payments. Direct Graduate Medical Education PaymentsCMS is proposing changes to the current methodology for direct Graduate Medical Education Payments (“GME”) based on the U.S. District Court’s decision in Milton S. Hershey Medical Center v. Becerra, No. 19-cv-2680. GME Solutions assisted 30 hospitals involved with the appeal.The Court ruled that the current methodology which CMS refers to as “proportional reduction method” improperly reduced the weighting factors and conflicted with the Medicare statute and directed CMS to revise the methodology to conform with statutory requirements.CMS is proposing to replace the existing policy at 42 CFR 413.79(c)(2)(iii) with a new payment formula. Hospitals operating over the FTE cap will be reimbursed for the lower of the FTE cap or the current year weighted FTEs. If the current year weighted FTEs exceed the FTE cap CMS will apply a formula to allocate the weighted FTEs between primary care and other to equal the FTE cap. The proposed rules will permit the hospitals to calculate the prior and penultimate year FTEs utilizing the same methodology. The proposed rules would apply to cost reporting periods beginning on or after October 1, 2001. CMS has specified that hospitals will not be allowed to reopen cost reports to apply the revised proposed methodology. Medicare GME Affiliation Agreements within Certain Rural Track FTE Limitations.Existing regulations do not allow GME affiliation agreements for urban and rural teaching hospitals that train residents in a rural track program. CMS is proposing to allow urban and rural hospitals participating in the same separately accredited rural training program to enter into “Rural Track Medicare GME Affiliation Agreement”. The urban and rural hospitals must participate in the same separately accredited 1-2 family medicine rural track program” to be eligible to enter an affiliation agreement. Only rural and urban hospitals that have rural track FTE limitations in effect prior to October 1, 2022, will be permitted to enter into affiliation agreements, and the affiliation agreements would be effective with the July 1, 2023 academic year. Medicare Managed Care PaymentsCMS has been updating Medicare Advantage nursing and allied health (“NAH”) payment rates and GME reduction factors through transmittals. Under the proposed rules these updates will now be published in the annual IPPS rule makings. CMS is proposing to reduce Medicare Advantage GME payments to hospitals by 3.71% for calendar year 2020 and 3.22% for calendar year 2021 Comments on the proposed rules must be submitted by June 17, 2022. We strongly recommend that all affected hospitals submit comments to CMS. GME Solutions is currently working with our legal team to draft a response. If you are interested in responding, please contact Sarah Ottesen, Principal at sarah@gmesolutions.com. You can find the IPPS 2023 rule here: https://public-inspection.federalregister.gov/2022-08268.pdf |
| About the Author: Larry Sumitani Senior Principal larry@gmesolutions.com |
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