Becker's Hospital Review

7 CFO / FINANCE CMS penalizes 2,273 hospitals for high readmissions: 6 things to know By Nathan Tucker C MS evaluated two and a half years of readmission cases for Medicare patients through the Hospital Readmissions Reduction Program and penalized 2,273 hospitals that had a greater-than-expected rate of return, according to a Nov. 1 report from Kaiser Health News. The average payment reduction was 0.43 percent, the lowest rate reduction since 2014. Reductions will be applied to each Medicare payment to the affected hospitals from Oct. 1, 2022, through September 2023. It is expected to cost the hospitals $320 million over the 12-month period. The report notes that the COVID-19 pandemic caused turmoil in hospitals and that CMS decided to exclude the first half of 2020 from the report due to the chaos. CMS also excluded Medicare patients who were readmitted with pneumonia across all three years because of the difficulty distinguishing them from COVID patients. Some hospitals will see their penalties greatly reduced from 2021. The penalty on Athens, Ga.-based St. Mary's Hospital is dropping from 2.54 percent to 0.06 percent. Lexington, Ky.-based Saint Joseph East received a maximum penalty of 3 percent in 2021, which was reduced to 0.78 percent from the current analysis. Flemington, N.J.-based Hunterdon Medical Center's rate went from 2.29 percent to 0.12 percent, according to the report. • Forty-three percent of the nation's 5,236 hospitals were penalized. • All but 770 penalized hospitals were automatically exempted. • The 2,193 exempted hospitals specialize in pediatrics, psychiatry, or veterans care. • Rehabilitation, long-term, and critical access hospitals were also excluded from the program. • Maryland hospitals were exempted due to a special payment arrangement with Medicare. • Seventy-five percent of Medicare-assessed hospitals were penalized. "Covid has been a tremendously disruptive force for all aspects of health care, most certainly CMS' quality measurement programs. It's probably going to be a couple of volatile years for readmission penalties," Akin Demehin, senior director of quality and patient safety policy at the American Hospital Association, told Kaiser Health News. n CMS releases final payment rules for 2023: 15 takeaways By Alan Condon C MS has published its annual payment updates for physicians, the Medicare shared savings program and outpatient and home health services for 2023. Here are 15 takeaways from the final rules, published Oct. 31 and Nov. 1: Physician Fee Schedule rule 1. e conversion factor used to calculate physician reimbursement will decline by $1.55 to $33.06 in 2023, representing a 4.48 percent decrease. CMS said the conversion factor accounts for the expiration of the 3 percent increase in physician fee schedule payments for 2022 — as required by the Protecting Medicare and American Farmers From Sequester Cuts Act — and the budget neutrality adjustment for changes in relative value units. 2. e agency finalized several policies related to telehealth, including extending numerous temporarily available telehealth services during the public health emergency through at least 2023. CMS said this will provide more time to collect data that could support their inclusion as permanent additions to its telehealth services list. 3. In response to the increasing demand for behavioral health services, CMS said it will allow these services to be provided under the supervision of a physician or nonphysician practitioner — rather than under direct supervision — when such services are provided by "auxiliary personnel," such as licensed professional counselors or family and marriage therapists. 4. In an update to the Medicare Shared Savings Program, providers new to the initiative that are not renewing or reentering as an ACO and qualify as low revenue can receive a one-time payment of $250,000 and quarterly payments for the first two years of a five- year period. e advance payments would be recouped once an ACO begins generating shared savings in their current and next agreement periods. CMS said it will not move to recoup money from ACOs that do not generate savings, but those ACOs must remain in the program for the full five years. Outpatient Prospective Payment System rule 5. CMS is increasing outpatient payment rates for hospitals that meet applicable quality reporting requirements by 3.8 percent. 6. In line with the 2019 OPPS final rule — which finalized a proposal to apply the productivity-adjusted hospital market basket update to ASC payment rates through 2023 — CMS is also increasing pay

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