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Federal Register / Vol. 86, No. 147 / Wednesday, August 4, 2021 / Rules and Regulations
established outlier update methodology.
As discussed in this section and in section VI.C.3 of this final rule, we are finalizing our proposal to update the outlier fixed dollar loss threshold based on FY 2019 IPF claims in order to maintain the appropriate outlier percentage in FY 2022. We are finalizing our proposal to deviate from our longstanding practice of using the most recent available year of claims only because, and to the extent that, the COVID19 PHE appears to have significantly impacted the FY 2020 IPF
claims. As discussed in section VI.C.3 of this final rule, we have analyzed more recent available IPF claims data and continue to believe that using FY 2019
IPF claims is appropriate for the FY
2022 update. We intend to continue to analyze further data in order to better understand both the short-term and long-term effects of the COVID19 PHE
on IPFs.

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3. Final Update to IPF Cost-to-Charge Ratio Ceilings Under the IPF PPS, an outlier payment is made if an IPFs cost for a stay exceeds a fixed dollar loss threshold amount plus the IPF PPS
amount. In order to establish an IPFs cost for a particular case, we multiply the IPFs reported charges on the discharge bill by its overall cost-tocharge ratio CCR. This approach to determining an IPFs cost is consistent with the approach used under the IPPS
and other PPSs. In the FY 2004 IPPS
final rule 68 FR 34494, we implemented changes to the IPPS policy used to determine CCRs for IPPS
hospitals, because we became aware that payment vulnerabilities resulted in inappropriate outlier payments. Under the IPPS, we established a statistical measure of accuracy for CCRs to ensure that aberrant CCR data did not result in inappropriate outlier payments.
As we indicated in the November 2004 IPF PPS final rule 69 FR 66961, we believe that the IPF outlier policy is susceptible to the same payment vulnerabilities as the IPPS; therefore, we adopted a method to ensure the statistical accuracy of CCRs under the IPF PPS. Specifically, we adopted the following procedure in the November 2004 IPF PPS final rule:
Calculated two national ceilings, one for IPFs located in rural areas and one for IPFs located in urban areas.
Computed the ceilings by first calculating the national average and the standard deviation of the CCR for both urban and rural IPFs using the most recent CCRs entered in the most recent Provider Specific File PSF available.

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For FY 2022, we are finalizing our proposal to continue to follow this methodology.
To determine the rural and urban ceilings, we multiplied each of the standard deviations by 3 and added the result to the appropriate national CCR
average either rural or urban. The upper threshold CCR for IPFs in FY
2022 is 2.0261 for rural IPFs, and 1.6879
for urban IPFs, based on CBSA-based geographic designations. If an IPFs CCR
is above the applicable ceiling, the ratio is considered statistically inaccurate, and we assign the appropriate national either rural or urban median CCR to the IPF.
We apply the national median CCRs to the following situations:
New IPFs that have not yet submitted their first Medicare cost report. We continue to use these national median CCRs until the facilitys actual CCR can be computed using the first tentatively or final settled cost report.
IPFs whose overall CCR is in excess of three standard deviations above the corresponding national geometric mean that is, above the ceiling.
Other IPFs for which the MAC
obtains inaccurate or incomplete data with which to calculate a CCR.
We are finalizing our proposal to continue to update the FY 2022 national median and ceiling CCRs for urban and rural IPFs based on the CCRs entered in the latest available IPF PPS PSF.
Specifically, for FY 2022, to be used in each of the three situations listed previously, using the most recent CCRs entered in the CY 2021 PSF, we provide an estimated national median CCR of 0.5720 for rural IPFs and a national median CCR of 0.4200 for urban IPFs.
These calculations are based on the IPFs location either urban or rural using the CBSA-based geographic designations. A complete discussion regarding the national median CCRs appears in the November 2004 IPF PPS
final rule 69 FR 66961 through 66964.
IV. Inpatient Psychiatric Facilities Quality Reporting IPFQR Program A. Background and Statutory Authority We refer readers to the FY 2019 IPF
PPS final rule 83 FR 38589 for a discussion of the background and statutory authority 1 of the IPFQR
Program.
1 We note that the statute uses the term rate year RY. However, beginning with the annual update of the inpatient psychiatric facility prospective payment system IPF PPS that took effect on July 1, 2011 RY 2012, we aligned the IPF
PPS update with the annual update of the ICD
codes, effective on October 1 of each year. This change allowed for annual payment updates and
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B. Covered Entities In the FY 2013 IPPS/LTCH PPS final rule 77 FR 53645, we established that the IPFQR Programs quality reporting requirements cover those psychiatric hospitals and psychiatric units paid under Medicares IPF PPS
412.404b. Generally, psychiatric hospitals and psychiatric units within acute care and critical access hospitals that treat Medicare patients are paid under the IPF PPS. Consistent with previous regulations, we continue to use the terms facility or IPF to refer to both inpatient psychiatric hospitals and psychiatric units. This usage follows the terminology in our IPF PPS regulations at 412.402. For more information on covered entities, we refer readers to the FY 2013 IPPS/LTCH PPS final rule 77
FR 53645.
C. Previously Finalized Measures and Administrative Procedures The current IPFQR Program includes 14 measures. For more information on these measures, we refer readers to Table 5 of this final rule and the following final rules:
The FY 2013 IPPS/LTCH PPS final rule 77 FR 53646 through 53652;
The FY 2014 IPPS/LTCH PPS final rule 78 FR 50889 through 50897;
The FY 2015 IPF PPS final rule 79
FR 45963 through 45975;
The FY 2016 IPF PPS final rule 80
FR 46695 through 46714;
The FY 2017 IPPS/LTCH PPS final rule 81 FR 57238 through 57247;
The FY 2019 IPF PPS final rule 83
FR 38590 through 38606; and The FY 2020 IPF PPS final rule 84
FR 38459 through 38467.
For more information on previously adopted procedural requirements, we refer readers to the following rules:
The FY 2013 IPPS/LTCH PPS final rule 77 FR 53653 through 53660;
The FY 2014 IPPS/LTCH PPS final rule 78 FR 50897 through 50903;
The FY 2015 IPF PPS final rule 79
FR 45975 through 45978;
The FY 2016 IPF PPS final rule 80
FR 46715 through 46719;
the ICD coding update to occur on the same schedule and appear in the same Federal Register document, promoting administrative efficiency. To reflect the change to the annual payment rate update cycle, we revised the regulations at 42 CFR
412.402 to specify that, beginning October 1, 2012, the IPF PPS RY means the 12-month period from October 1 through September 30, which we refer to as a fiscal year FY 76 FR 26435. Therefore, with respect to the IPFQR Program, the terms rate year, as used in the statute, and fiscal year as used in the regulation, both refer to the period from October 1 through September 30. For more information regarding this terminology change, we refer readers to section III. of the RY 2012 IPF PPS
final rule 76 FR 26434 through 26435.

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