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Federal Register / Vol. 86, No. 154 / Friday, August 13, 2021 / Rules and Regulations
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We did not receive any public comments regarding the impact of our proposals.
6. Effects of Implementation of the Rural Community Hospital Demonstration Program in FY 2022
In section V.J. of the preamble of this final rule for FY 2022, we discussed our implementation and budget neutrality methodology for section 410A of Public Law 108173, as amended by sections 3123 and 10313 of Public Law 111148, by section 15003 of Public Law 114255, and most recently, by section 128 of Public Law 116
260, which requires the Secretary to conduct a demonstration that would modify payments for inpatient services for up to 30 rural hospitals.
Section 128 of Public Law 116255
requires the Secretary to conduct the Rural Community Hospital Demonstration for a 15-year extension period that is, for an additional 5 years beyond the current extension period. In addition, the statute provides for continued participation for all hospitals participating in the demonstration program as of December 30, 2019. We, therefore, interpret the statute as providing for an additional 5-year period under the reasonable cost-based reimbursement methodology for the demonstration for the hospitals that were participating as of this date.
Section 410Ac2 of Public Law 108173
requires that in conducting the demonstration program under this section, the Secretary shall ensure that the aggregate payments made by the Secretary do not exceed the amount which the Secretary would have paid if the demonstration program under this section was not implemented budget neutrality. We are adopting the general methodology used in previous years, whereby we estimate the additional payments made by the program for each of the participating hospitals as a result of the demonstration, and then adjust the national IPPS rates by an amount sufficient to account for the added costs of this demonstration. In other words, we apply budget neutrality across the payment system as a whole rather than across the participants
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of this demonstration. The language of the statutory budget neutrality requirement permits the agency to implement the budget neutrality provision in this manner. The statutory language requires that aggregate payments made by the Secretary do not exceed the amount which the Secretary would have paid if the demonstration was not implemented, but does not identify the range across which aggregate payments must be held equal.
For this final rule, the resulting amount applicable to FY 2022 is $65,779,803, which we are proposing to include in the budget neutrality offset adjustment for FY 2022. This estimated amount is based on the specific assumptions regarding the data sources used, that is, recently available as submitted cost reports and historical and currently finalized update factors for cost and payment.
In previous years, we have incorporated a second component into the budget neutrality offset amounts identified in the final IPPS
rules. As finalized cost reports became available, we determined the amount by which the actual costs of the demonstration for an earlier, given year differed from the estimated costs for the demonstration set forth in the final IPPS rule for the corresponding fiscal year, and we incorporated that amount into the budget neutrality offset amount for the upcoming fiscal year. We have calculated this difference for FYs 2005 through 2015
between the actual costs of the demonstration as determined from finalized cost reports once available, and estimated costs of the demonstration as identified in the applicable IPPS final rules for these years.
With the extension of the demonstration for another 5-year period, as authorized by section 128 of Public Law 116260, we will continue this general procedure. All finalized cost reports are now available for the 18
hospitals that completed a cost reporting period beginning in FY 2016 according to the demonstration cost-based payment methodology. For this fiscal year, the actual costs of the demonstration as indicated by the finalized cost reports exceeded the estimated amount identified in the final rule for that year by $3,797,994. Keeping with
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previous practice, we are adding this difference to the estimated about for the upcoming year in arriving at the total budget neutrality offset amount for FY 2022. This amount is $69,577,797, which we will subtract from the national IPPS payment rates.
7. Effects of the Repeal of the Market-Based MSDRG Policy In section V.L. of the preamble of this final rule, we discuss the final policy to repeal the requirement that a hospital report on the Medicare cost report the median payerspecific negotiated charge that the hospital has negotiated with all of its MA organization payers, by MSDRG, for cost reporting periods ending on or after January 1, 2021, as finalized in the FY 2021 IPPS/LTCH PPS
final rule. In the FY 2021 IPPS/LTCH PPS
final rule, we estimated the total annual burden hours for this data collection requirement as follows: 20 hours per hospital times 3,189 total hospitals equals 63,780
annual burden hours and $4,315,993
annually for all hospitals nationally. We refer readers to 85 FR 59015 for further analysis of this assessment.
The market-based MSDRG relative weight methodology, as finalized in the FY 2021
IPPS/LTCH PPS final rule, was adopted effective beginning with the relative weights calculated for FY 2024. As discussed in section V.L of the preamble of this final rule, we are finalizing our proposal to repeal the market-based MSDRG relative weight methodology effective in FY 2024. As such, we will continue calculating the MSDRG
relative weights using the current cost-based MSDRG relative weight methodology for FY
2024 and subsequent fiscal years.
Repealing the market-based data collection requirement and market-based MSDRG
relative weight methodology does not result in a payment impact to hospitals or increase hospital burden.
8. Effects of Continued Implementation of the Frontier Community Health Integration Project FCHIP Demonstration In section VII.B.2. of the preamble of this final rule, we discuss the implementation of the FCHIP demonstration, which allows
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Source: FY 2022 HAC Reduction Program final rule results are based on CMS PSI 90 data from July I, 2018 through December 31, 2019 and CDC NHSN HAI results from January 1, 2019 through December 31, 2019. Hospital Characteristics are based on the FY 2022 Proposed Rule Impact File "This column is the number of non-Maryland hospitals with a Total HAC Score within the corresponding characteristic that are estimated to be in the worst-performing quartile.
h This column is the percent of non-Maryland hospitals within each characteristic that are estimated to be in the worst-performing quartile. The percentages are calculated by dividing the number of non-Maryland hospitals with a Total HAC Score in the worst-performing quartile by the total number of non-Maryland hospitals with a Total HAC Score within that characteristic.
0 The number ofnon-Maryland hospitals with a FY 2022 Total HAC Score N = 3,067. Note that not all hospitals have data for all hospital characteristics.
a The number of hospitals that had information for geographic location with bed size, Safety-net status, DSH percent, teaching status, and Ownership n = 3,061.
0 A hospital is considered a Safety-net hospital if it is in the top quintile for DSH percent.
r The DSH patient percentage is equal to the sum of: 1 the percentage of Medicare inpatient days attributable to patients eligible for both Medicare Part A and Supplemental Security Income; and 2 the percentage of total inpatient days attributable to patients eligible for Medicaid but not Medicare Part A.
g A hospital is considered a teaching hospital if it has an IME adjustment factor for Operation PPS TCHOP greater than zero.
hNot all hospitals had data for MCR percent n = 3,054.
; All hospitals had data for Region n = 3,067. For the 6 hospitals that were not in the FY 2022 Proposed Rule Impact File region data were identified using the hospital CCN.