In a win for hospitals, CMS removes a rate-reporting requirement from the Medicare FY22 IPPS

The pending requirement for hospitals to disclose privately negotiated Medicare Advantage (MA) payment rates on their Medicare cost reports was withdrawn in the recently issued FY22 proposed rule for the Inpatient Prospective Payment System (IPPS) and long-term care hospitals.

The requirement was established by the Trump administration in the FY21 final rule. Hospitals would have had to report the median MA payer-specific negotiated charge for each MS-DRG.

The idea was to use the data in setting Medicare payment rates, but the requirement would have added an estimated 64,000 hours to hospital administrative workloads.

CMS likewise is proposing to repeal the market-based MS-DRG relative-weight methodology that was supposed to take effect in FY24. Instead, the existing cost-based methodology will remain.

HFMA expressed support for those decisions. "This proposal will avoid imposing additional burden on hospitals," said Rick Gundling, senior vice president of healthcare financial practices.

In written comments on the FY21 final rule, HFMA said its members "fail to see how transitioning to a system that uses median MA 'payer-specific negotiated charges' achieves the stated policy goals or improves the accuracy of the Medicare IPPS."

HFMA also stated, "[W]e do not see the utility of requiring hospitals to report their 'payer-specific negotiated charges' as part of the Medicare cost report and strongly encourage CMS not to finalize a proposal that increases provider administrative burden - contrary to the administration's 'Patients Over Paperwork Initiative' - and collects information that CMS is already requiring hospitals to publicly post."