News Briefs: Federal vaccination requirements finalized for hospitals and most other healthcare settings

If a hospital’s staff aren’t fully vaccinated by Jan. 4, the organization will be deemed noncompliant with Medicare and Medicaid regulations, according to a new federal rule.

The Biden administration said the requirements apply to about 76,000 providers and cover more than 17 million healthcare workers. Many hospitals already have implemented their own set of vaccine requirements, but the new rule is designed to ensure those mandates apply nationwide.

The requirements apply not only to onsite clinicians but also to nonclinical staff and any offsite staff who interact in person with patients, other staff members, residents, clients and participants in Programs of All-Inclusive Care for the Elderly (PACE).

Covered facilities include most types of providers but not physician practices, which aren’t subject to CMS health and safety requirements. However, physicians with admitting privileges at a hospital must be vaccinated to ensure the facility is compliant.

Proof of prior COVID-19 infection is not grounds for an exemption, CMS stated. In addition, there is no option for staff to undergo regular testing as an alternative to getting vaccinated. Medical and religious exemptions for employees may be applicable under, respectively, the Americans with Disabilities Act and Title VII of the Civil Rights Act of 1964.

Just before hfm went to press, 10 states filed suit in federal district court in Missouri to stop the rule from being implemented.

New regulations negate recent changes to the inpatient-only list and ASC covered procedures

CMS finalized a prior proposal to overturn regulations that would have eliminated the inpatient-only (IPO) list over a three-year period, a process that started with the removal of 298 services in 2021.

Those services will be added back to the IPO list in 2022, except for three services and their corresponding anesthesia codes.

For any service removed from the IPO list in the future, the exemption from medical review activities related to the two-midnight policy will revert to a two-year time frame. The exemption had been extended indefinitely as an accommodation for the large number of procedures that were in line to be removed from the list.

New regulations also mostly nullify a 2021 provision that added 267 surgical procedures to the ambulatory surgical center covered procedures list in conjunction with a change to longstanding safety criteria.

CMS is restoring the criteria and removing 255 of those procedures for 2022.

Medicare issues its annual outpatient payment update, but the net change could be a reduction

CMS in November published its 2022 final rule for payments to hospital outpatient departments and ambulatory surgical centers (ASCs).

The outpatient payment increase for hospitals that meet quality-reporting requirements will be 2%, down from 2.3% in the proposed rule. The change stems from a larger-than-projected productivity adjustment, which is determined by a formula that reflects economywide productivity increases. The payment increase for ASCs likewise is 2%.

The net update for outpatient services and ASCs actually will be a 4% reduction unless Congress acts before the end of this year.

Across-the-board Medicare payment cuts totaling 6% are set to take effect in 2022, including reinstatement of the 2% Medicare sequester, which was suspended as an accommodation for providers near the start of the public health emergency. There’s also a 4% scheduled cut stemming from a statutory pay-for that was part of the 2021 COVID-19 relief legislation.

VBP models are projected to be almost universal for Medicare and Medicaid beneficiaries by 2030

Providers can expect more of a nudge into federal value-based payment (VBP) models but also more support in making the necessary adjustments to succeed in those models, according to a new blueprint published by CMS and the Center for Medicare & Medicaid Innovation (CMMI).

The agencies released a white paper detailing the changes to federal VBP programs that are in store during the Biden administration. One goal of the new approach is to ensure every Medicare fee-for-service beneficiary and most Medicaid beneficiaries are in an accountable care relationship by 2030.

That objective will require bolstering the VBP capabilities of providers across the continuum of care, and the effort can be expected to include critical access hospitals and disproportionate share hospitals.

“We understand that providers need more support,” Ellen Lukens, director of CMMI’s Policy and Programs Group, said during a stakeholder call. “Accepting downside risk and meeting model requirements is not easy.”

CMMI thus intends to offer “more actionable data, learning collaboratives and more regulatory and payment flexibility,” she said.

Medicare will cover an expanded set of telehealth services for 2 more years

A number of telehealth services will continue to be covered by Medicare through 2023 as CMS evaluates whether they should be covered permanently.

The services were scheduled to lose eligibility for coverage at the conclusion of the public health emergency. New telehealth codes for cardiac rehabilitation and intensive cardiac rehabilitation also are being made available.

For services that remain eligible for coverage, an in-person visit must take place at least once per year, with exceptions permissible based on a beneficiary’s circumstances. CMS had set a six-month interval for in-person visits but changed the timetable after further review and stakeholder feedback.

Audio-only visits can be covered for mental health services if a beneficiary cannot or prefers not to connect by video.

A new billing modifier will be used for such claims. Mental health services can include treatment of substance-use disorders.

Hospitals propose improvements to prior authorization processes in Medicare Advantage

The American Hospital Association (AHA) wrote a letter to CMS in which it said Medicare Advantage (MA) health plans should be included in pending regulations to streamline prior authorization in public healthcare programs.

CMS in December 2020 issued a proposed rule that would place new requirements on Medicaid fee-for-service (FFS) and managed care programs, along with commercial health plans in the Affordable Care Act’s federally facilitated marketplaces, to improve the electronic exchange of data and processes related to prior authorization starting in 2023.

Among other obligations, payers would have to issue decisions within 72 hours for urgent requests or a week for standard requests.

While CMS has indicated that the Medicare FFS program will adhere to the new requirements, the AHA says the exclusion of MA plans “is extremely troubling and significantly reduces the potential impact of the regulation.”

Large hospitals that don’t comply with price transparency regs face bigger annual penalties

CMS finalized its proposal to change the penalty for noncompliance with price transparency regulations from $300 per day for all hospitals to a sliding scale based on bed count.

Specifically, the penalty will increase by $10 per day for each additional bed beyond 30, up to a maximum of $5,500 per day for hospitals with at least 550 beds.

The penalty for being noncompliant every day for a year would range from $109,500 to more than $2 million.

The approach “affirms the administration’s commitment to enforcement and public access to pricing information,” CMS wrote in the regulations.

Updated requirements specify that machine-readable files with price information must be accessible to automated searches and direct downloads.

Annual savings from healthcare administrative simplification could exceed $250 billion

The healthcare industry can save $265 billion annually without compromising quality or access or incorporating structural changes such as single-payer, a new analysis suggests.

As published in JAMA, researchers with McKinsey & Company, Harvard University and the National Bureau of Economic Research recommend prioritizing five areas that account for 94% of administrative spending:

• Industry-agnostic corporate functions such as general administration, HR and nonclinical IT
• Financial transactions such as claims processing and prior authorization
• Insurance underwriting
• Administrative clinical support operations
• Customer and patient services

For individual organizations, the authors’ proposed interventions are designed to address issues such as inefficient workflows, lack of standardization and disconnected tools and systems.

CMS announces 2 new items will be included in outpatient pay-for-reporting in 2022

The Hospital Outpatient Quality Reporting Program obligates hospitals to report on certain clinical process measures or face a 2% reduction in their annual Medicare payment update.

Changes to reporting requirements that will take effect over the next calendar year include the addition of two mandatory measures:

• COVID-19 Vaccination Coverage of Healthcare Personnel
• Breast Screening Recall Rates

In addition, validation processes are being updated, including by implementing electronic-only submission of medical records to the CMS Data Abstraction Center and reducing the turnaround time after a validation request from 45 to 30 days.

Medicare drug payments continue to be a sore point for hospitals

Payment for separately payable drugs acquired through the 340B Drug Pricing Program will remain average sales price (ASP) minus 22.5% in 2022, CMS announced.

“We remain disappointed that CMS will continue deep payment cuts to 340B hospitals, which threatens their ability to care for their patients and communities and goes against Congress’s intent in establishing the 340B program nearly 30 years ago,” Stacey Hughes, executive vice president for government relations and public policy with the American Hospital Association, said in a news release.

In November, the Supreme Court was scheduled to review the legality of CMS’s decision to take the payment rate down from ASP plus 6% in 2018.

Acquisition by PE firms affects hospitals’ service-line portfolios

Researchers with Duke University and University of Texas MD Anderson Cancer Center reported on changes in service lines following hospital acquisition by private equity (PE) firms between 2004 and 2018.

Relative to other hospitals, “Private equity acquisition was associated with a higher probability of adding specific profitable hospital-based services, profitable technologies and freestanding or satellite emergency departments,” the authors wrote in Health Affairs.

Examples of such services include interventional cardiac catheterization, hemodialysis and labor and delivery, the authors noted, while relevant examples of technologies are robotic surgery and digital mammography.

New clinical labor rates to be phased in more slowly than first planned

A scheduled update to Medicare’s clinical labor rates will be implemented over a four-year period, culminating with the new rates taking full effect in 2025, according to a new rule for the Medicare Physician Fee Schedule. That’s a change from an earlier proposal to implement the entire update in 2022.

The transition window is meant to serve as an adjustment period for specialties that will be adverselwy affected by the change. While many specialties will see an increase in payment based on the higher rates for labor, others are in for a reduction.

Services in areas such as radiation oncology (-3% change), vascular surgery (-5%) and interventional radiology (-6%) are projected to generate lower payment when the update is complete because of their high equipment and supply costs. Due to budget neutrality provisions, an increase in labor rates must be offset by decreases in payment for supplies and equipment.