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The Centers for Medicare & Medicaid Services (CMS) has
released the Final Rule with a comment period for the Hospital Inpatient Prospective Payment Systems for
Acute Care Hospitals; Changes to Medicare Graduate Medical
Education Payments for Teaching Hospitals; Changes to Organ
Acquisition Payment Policies. The Final Rule, released on Dec.
17, 2021, addresses proposed, but not finalized, policies in the
initial Inpatient Prospective Payment System (IPPS) Final Rule.
A fact sheet is provided on the CMS website. This Final Rule with a
comment period is scheduled to be published in the Federal
Register on Dec. 27, 2021, and comments are due within 60
days of publication.
Changes to Graduate Medical Education (GME)
Distribution of 1,000 New Residency
Positions. Under Section 126 of the Consolidated
Appropriations Act (CAA), CMS is required to distribute an
additional 1,000 new Medicare-funded medical residency positions,
at no more than 200 slots per year, beginning in Fiscal Year (FY)
2023. As required by Congress, CMS is prioritizing
applications from qualifying hospitals that serve geographic areas
and underserved populations with the greatest needs by using the
Health Resources and Services Administration’s (HRSA) health
professional shortage areas (HPSA) score in allocating full-time
equivalents (FTEs). In order to be eligible for prioritization
based on HPSA scores, hospitals must first qualify under one or
more of four statutorily defined categories.
- Category One: Hospitals that are in rural areas or treated as
such. A hospital is considered to be in a rural area if its main
campus is in an area outside an urban core-based statistical area
(CBSA). - Category Two: Hospitals that are training residents in excess
of their current Medicare direct graduate medical education (DGME)
and indirect medical education (IME) caps. CMS would require
hospitals to submit cost reports as evidence that they are training
more residents than are in their number of funded Medicare cap
slots. - Category Three: Hospitals in states with new medical schools,
additional locations or branch campuses that were established on or
after Jan. 1, 2000. - Category Four: Hospitals that serve areas designated as HPSAs.
To qualify under Category Four, CMS proposed that a hospital must
attest that more than 50 percent of resident training time in each
program for which funding is requested would be spent training at
the hospital locations within the HPSA. However, CMS modified its
proposal to provide additional flexibility. Now, all program
training that occurs in a geographic HPSA at scheduled program
training sites that are physically located in that HPSA and treat
the HPSA’s population, including nonprovider settings and
Veterans Affairs facilities, will count toward meeting the 50
percent training requirement to qualify under Category Four.
Under these four categories, CMS will prioritize applications
from qualifying hospitals that assist underserved populations in
geographic HPSAs or population HPSAs. Based on the residency
training program for which the hospital is applying, the hospital
will choose, if applicable, a geographic or population HPSA where
residents spend at least 50 percent of their training time.
The HPSA scores associated with the geographic or population
HPSAs chosen by hospitals that qualify will be ranked highest to
lowest. The 200 residency positions available for each fiscal year
will be prioritized in this manner, with each applicant hospital
receiving up to five FTEs based on the length of the program
associated with the hospital’s application.
Notably, CMS modified its proposal to adjust the size of the
award to the length of the program for which a hospital is
applying. Specifically, the maximum award amount is contingent on
the length of the program for which a hospital is applying, with up
to one FTE being awarded per program year, not to exceed a program
length of five years or five FTEs. For example, a hospital applying
to train residents in a three-year program may request up to three
FTEs per fiscal year.
Hospitals can find information about the HPSA or HPSAs
associated with their training program locations using the HRSA search tool. When a hospital finds that
its residency training program meets the requirement to be
prioritized by more than one HPSA, it may choose which HPSA to use
on its application. Note: Only one HPSA can be prioritized.
To be considered for an increase in resident positions, each
qualifying hospital must apply. An application is considered timely
for additional residency positions effective July 1 of the
applicable fiscal year if it is submitted by March 31 of the prior
fiscal year. As such, the first round of 200 residency slots will
be announced by Jan. 31, 2023, and become effective July 1, 2023
(meaning applications must be submitted by March 31, 2022).
CMS did not finalize its alternative distribution proposal to
prioritize hospitals that qualify in more categories.
(Comment Solicitation: CMS seeks comment on how to
account for healthcare provided outside of a HPSA to HPSA residents
and feasible alternatives to HPSA scores as a proxy for health
disparities in the prioritization of additional FTE cap slots. CMS
also seeks comment on potential alternative definitions of Category
Four to inform future rulemaking.)
Promoting Rural Hospital GME Funding
Opportunity. CMS is implementing Section 127 of CAA,
“Promoting Rural Hospital GME Funding Opportunity,” which
allows rural teaching hospitals participating in an accredited
rural training program to receive increases to their FTE caps.
Specifically, the agency will provide an adjustment to IME and
direct GME FTE resident caps each time an urban and rural hospital
establishes a Rural Training Track (RTT) program for the first
time, even if the RTT program does not meet the newness criteria
for Medicare payment purposes. CMS also will adjust resident caps
for an urban hospital creating additional RTTs after establishing
its first RTT.
Adjustment of Low Per Resident Amounts
(PRAs). Section 131 of CAA made statutory changes to
the determination of PRAs and GME caps of hospitals that hosted a
small number of residents for a short duration. Accordingly, CMS
finalized its proposals to allow qualifying hospitals that
previously had low FTE caps to recalculate the PRA and FTE cap. CMS
will post a file on its website containing an excerpt of the
Healthcare Cost Report Information System (HCRIS) cost report
worksheets on which FTE counts, caps and PRAs, if any, would have
been reported, starting with cost reports beginning in 1995. CMS
also will permit certain hospitals with no more than three FTEs on
their cost report a one-time opportunity to request reconsideration
by its MAC, which must be submitted electronically and received by
the MAC by July 1, 2022.
(Comment Solicitation: CMS seeks public comment
regarding how to handle reviews of PRAs or FTE caps from cost
reports that are beyond the three-year reopening period –
with the exception of Category A and Category B hospitals that
agree with the HCRIS posting).
Treatment of Certain Medicaid Section 1115
Demonstrations for Medicare Disproportionate Share Hospital (DSH)
Payments. CMS is not addressing its proposal related
to the treatment of Section 1115 waiver days for purposes of the
DSH adjustment, though it expects to revisit the issue in future
rulemaking.
Organ Acquisition Payment Policies
After considering the numerous public comments received, CMS is
not finalizing its proposal concerning the organ counting policy
for Medicare’s organ acquisition payment purposes and the
research organ counting policy. While CMS notes it “may
revisit” the policy in future rulemaking, it is, however,
finalizing other Medicare organ acquisition payment policies with
some modifications.
To apply a coordinated approach across organ types, CMS
finalized the codification and compilation of Medicare organ
acquisition policies under a new 42 CFR Part 413.400.
Other key policies of note include:
Medicare’s Principles of Reasonable
Costs. CMS finalized that donor community hospitals
bill organ procurement organizations (OPOs) for costs of services
furnished to a cadaveric donor for cost reporting periods beginning
on or after Oct. 1, 2021. OPO cost reports include OPO donor
acquisition costs and donor community hospital costs for services
provided to cadaveric donors. As such, these charges are subject to
Medicare’s principles of reasonable cost, and donor community
hospitals should bill the lesser of customary charges reduced to
cost based on the most recent hospital-specific cost-to-charge
ratio for the period in which service was rendered.
Medicare’s Role as a Secondary
Payer. Specifically, if the primary insurer’s
agreement requires the transplant hospital to accept the primary
insurer’s payment as payment in full for the transplant and
associated organ acquisition costs. In that case, Medicare has zero
liability as a secondary payer, and the organ at issue is not
counted as a Medicare usable organ. When the payment from the
primary insurer is insufficient to cover the entire cost, Medicare
may have a secondary payer liability, and the organ would count as
a Medicare usable organ. To determine whether Medicare has a
secondary payer liability, the provider must submit a bill to its
Medicare contractor and compare the total cost of the transplant,
including the transplant diagnosis-related group amount and organ
acquisition costs, to the payment received from the primary
payer.
Clarification of Items That Qualify (and Don’t)
Toward Medicare’s Share of Organ Acquisition
Costs. This includes, but is not limited to, costs
incurred in the acquisition of organs from a living donor or a
cadaveric donor, costs for services provided to transplant
recipients, certain registration fees, surgery fees for kidney
acquisition, costs associated with excising organs including
general routine and special care services, operating room and other
inpatient ancillary services applicable to living or cadaveric
donors, certain transportation costs, certain costs associated with
organizational membership, meetings or conferences, organ
preservation and perfusion costs, outpatient costs, costs for
certain laboratory services, and costs for seminars for continuing
education credits (which are allowed provided they are limited to
OPO staff). CMS also clarified several specific costs that Medicare
will not pay for, such as burial and funeral expenses for cadaveric
donors and costs associated with transportation of a living donor.
Additionally, CMS clarified that billing amounts in addition to
standard acquisition charges (SACs) would be
“inappropriate” and encouraged OPOs to ask their MACs to
adjust their SACs if they no longer cover increased costs, adding
that MACs are encouraged to refer inappropriate or abusive fiscal
procedures by OPOs.
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