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Hospital Medicare Inpatient PPS Final Rule for 2022 Released

On Tuesday, CMS released the Hospital Inpatient Prospective Payment System (IPPS)/ Long Term Care Hospital (LTCH) Prospective Payment System final rules for FY 2022. Finalized IPPS changes include:

  • Rates increased by a net 2.5% in fiscal year 2022, compared to FY 2021, for hospitals that are meaningful users of electronic health records and submit quality measure data.
  • Repeal of the requirement that hospitals report median payer-specific rates negotiated with Medicare Advantage organizations on Medicare cost reports (previous transparency requirements, such as posting payer-specific negotiated rates on your website, remain in effect).
  • Requirement that hospitals must report a new inpatient quality reporting program measure reflecting the proportion of their health care personnel vaccinated for COVID-19.
  • Suppressing certain measures in hospital quality reporting and value programs and applying neutral payment adjustments under hospital value-based purchasing (VBP) for FY 2022 to account for the impact of the COVID-19 PHE.
  • Extending New COVID-19 Treatments Add-on Payments for eligible COVID-19 products through the end of the fiscal year in which the public health emergency (PHE) ends.

In our IPPS proposed rule comment letter to CMS, AHA expressed serious concerns about proposed revisions to the calculation of the Medicaid fraction, which had the potential of seriously impacting DSH payments and 340B participation in the state. The final rule does not include this provision, and CMS plans to address that particular proposal later. They write: “We continue to review the large number of comments on the proposed revision to the regulation relating to the treatment of section 1115 waiver days for purposes of the DSH adjustment. Due to the number and nature of the comments that we received on our proposal, we intend to address the public comments in a separate document.”

AHA Analytics is preparing hospital-specific analyses of the final rules, which will be distributed to CEOs and CFOs once ready. Please contact Melanie Thomasson with any questions.

See the final rule >>

Read the CMS factsheet >>