CMS Releases FY23 Final Rules for Hospice Providers, IPFs, IRFs

Hospice Payment Rate Update Final Rule

The finalized FY 2023 hospice payment rate update includes a 3.8 percent, or $825 million, increase in hospice payments. This reflects a 4.1 percent market basket update and a 0.3 percentage point decrease for productivity adjustment.

Hospices that do not meet quality reporting requirements will receive a 2.0 percentage point reduction to the annual payment update increase for 2023.

The rule also finalized an annual payment cap per patient of $32,486.92.

CMS provided an update on the Hospice Outcomes and Patient Evaluation (HOPE) assessment tool in the final rule. The agency included information on beta testing, derivatives, and additional outreach efforts planned for after beta testing during the adoption process.

The rule also included potential future quality measures for the Hospice Quality Reporting Program (HQRP) based on HOPE data.

In addition, CMS shared an update on the Consumer Assessment of Healthcare Providers and Systems (CAHPS) Hospice Survey and the experiment that tested the impact of adding a web-based model to the survey.

IPF Prospective Payment System Final Rule

The FY 2023 IPF PPS final rule solidified a 2.5 percent increase in IPF payments, equaling $90 million. The payment update reflects a 4.1 percent market basket update, a 0.3 percent reduction for productivity, and a 1.2 percentage point decrease in outlier payments.

After requesting comments on the IPF PPS refinement analysis results, CMS stated that it received feedback from MedPAC, individual IPF hospitals and health systems, and provider and patient advocacy organizations. The agency plans to use these comments to inform future rulemaking.

CMS also received comments on addressing healthcare disparities and advancing health equity through quality reporting, which it plans to consider when developing future policies. The agency did not make any changes to the IPF Quality Reporting Program in the final rule.

IRF Prospective Payment System Final Rule

The FY 2023 IRF PPS final rule included a 3.2 percent, or $275 million, increase in IRF payments. The increase reflects a 4.2 percent market basket update, a 0.3 percent decrease for productivity, and a 0.6 percentage point reduction in outlier payments.

The IRF PPS proposed rule included a 3.2 percent market basket update, a productivity cut of 0.4 percentage points, and a 0.8 percent decrease in outlier payments. These updates received pushback from the American Hospital Association (AHA).

In a June 2022 letter to CMS, AHA stated that the proposed 2.0 percent payment increase did not accurately reflect the financial challenges hospitals were facing, such as substantial labor expenses.

In the final rule, CMS codified the IRF teaching status adjustment policy, which adjusts payments to reflect the higher costs of teaching IRFs.

The rule also finalized changes to the IRF Quality Reporting Program.

IRFs that do not meet reporting requirements will receive a 2.0 percentage point reduction in their annual increase factors.

CMS finalized its proposal to require IRFs to collect quality data on all patients, regardless of payer. According to the agency, collecting data on all IRF patients will offer a complete view of the quality of care provided by IRFs and ensure all patients are receiving the same quality of care.

Providers must start collecting quality data on all patients beginning October 1, 2024.