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Federal Register / Vol. 86, No. 147 / Wednesday, August 4, 2021 / Rules and Regulations estimated outlier payments at 2.0
percent of total estimated payments in FY 2022. This estimate does not include the implementation of the required 2.0
percentage point reduction of the market basket update factor for any IPF
that fails to meet the IPF quality reporting requirements as discussed in section V.A. of this final rule.
2. Impact on Providers
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To show the impact on providers of the changes to the IPF PPS discussed in this final rule, we compare estimated payments under the IPF PPS rates and factors for FY 2022 versus those under FY 2021. We determined the percent change in the estimated FY 2022 IPF
PPS payments compared to the estimated FY 2021 IPF PPS payments for each category of IPFs. In addition, for each category of IPFs, we have included the estimated percent change in payments resulting from the update to the outlier fixed dollar loss threshold amount; the updated wage index data including the updated labor-related share; and the market basket update for FY 2022, as reduced by the productivity adjustment according to section 1886s2Ai of the Act.
Our longstanding methodology uses the best available data as the basis for our estimates of payments. Typically, this is the most recent update of the latest available fiscal year of IPF PPS
claims, and for this final rulemaking, that would be the FY 2020 claims.
However, as discussed in section III.F.2
of this final rule, the U.S. healthcare system undertook an unprecedented response to the COVID19 PHE during FY 2020. Therefore, we considered whether the most recent available year of claims, FY 2020, or the prior year, FY
2019, would be the best for estimating IPF PPS payments in FY 2021 and FY
2022.
As discussed in the FY 2022 IPF PPS
proposed rule 86 FR 19524 through 19526, we examined the differences between the FY 2019 and FY 2020
claims distributions to better understand the disparity in the estimate of outlier payments as a percentage of total PPS payments between the two years, which was driving the divergent results in our proposed rule impacts between FY 2019 claims and FY 2020

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claims. Based on our analysis, we stated that we believe it is likely that the response to the COVID19 PHE in FY
2020 has contributed to increases in estimated outlier payments and to decreases in estimated total PPS
payments in the FY 2020 claims.
Therefore, we proposed, in contrast to our usual methodology, to use the FY
2019 claims to calculate the outlier fixed dollar loss threshold and wage index budget neutrality factor.
We requested comments from stakeholders about likely explanations for the declines in total PPS payments, covered IPF days, and covered IPF stays in FY 2020. Additionally, we requested comments from stakeholders about likely explanations for the observed fluctuations and overall increases in covered lab charges per claim and per day, which we identified through our analysis. Lastly, we requested comments regarding likely explanations for the increases in estimated cost per stay relative to estimated IPF Federal per diem payment amounts per stay.
Comment: We received 1 comment regarding our analysis of FY 2020
claims and 3 comments in support of our proposal to use FY 2019 claims for calculating the outlier fixed dollar loss threshold and wage index budget neutrality factor for FY 2022. One commenter appreciated CMS
recognition of the impact of the COVID
19 PHE on providers. Another commenter agreed with our analysis about the effect of the COVID19 PHE
on the FY 2020 claims, stating their belief that FY 2020 cases were heavily impacted by the intensity of the COVID
19 pandemic, which continues to subside.
Response: We appreciate the support from these commenters. As we discuss later in this section of this final rule, based on the results of our final impact analysis, we continue to believe that the FY 2019 claims are the best available data for estimating payments in this FY
2022 final rulemaking, due to the likely impact of the COVID19 PHE on IPF
utilization in FY 2020. We will continue to analyze data in order to understand its short-term and long-term effects on IPF utilization.
Final Decision: In light of the comments received and after analyzing
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more recently updated FY 2020 claims, we are finalizing our proposal to use the FY 2019 claims to calculate the outlier fixed dollar loss threshold and wage index budget neutrality factor.
To illustrate the impacts of the FY
2022 changes in this final rule, our analysis presents a side-by-side comparison of payments estimated using FY 2019 claims versus payments estimated using FY 2020 claims. We begin with FY 2019 IPF PPS claims based on the 2019 MedPAR claims, June 2020 update and FY 2020 IPF PPS
claims based on the 2020 MedPAR
claims, March 2021 update. We estimate FY 2021 IPF PPS payments using these 2019 and 2020 claims, the finalized FY 2021 IPF PPS Federal per diem base rates, and the finalized FY
2021 IPF PPS patient and facility level adjustment factors as published in the FY 2021 IPF PPS final rule 85 FR 47042
through 47070. We then estimate the FY 2021 outlier payments based on these simulated FY 2021 IPF PPS
payments using the same methodology as finalized in the FY 2021 IPF PPS final rule 85 FR 47061 through 47062 where total outlier payments are maintained at 2 percent of total estimated FY 2021 IPF
PPS payments.
Each of the following changes is added incrementally to this baseline model in order for us to isolate the effects of each change:
The final update to the outlier fixed dollar loss threshold amount.
The final FY 2022 IPF wage index, the final FY 2022 labor-related share, and the final updated COLA factors.
The final market basket update for FY 2022 of 2.7 percent less the productivity adjustment of 0.7
percentage point in accordance with section 1886s2Ai of the Act for a payment rate update of 2.0 percent.
Our final column comparison in Table 18 illustrates the percent change in payments from FY 2021 that is, October 1, 2020, to September 30, 2021 to FY
2022 that is, October 1, 2021, to September 30, 2022 including all the payment policy changes in this final rule. For each column, Table 18
presents a side-by-side comparison of the results using FY 2019 and FY 2020
IPF PPS claims.
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