CMS Finalizes 2022 Inpatient Prospective Payment System Hospital Rule

August 4, 2021

August 2, the Centers for Medicare & Medicaid Services (CMS) finalized its FY 2022 Inpatient Prospective Payment System (IPPS) rule. The rule increases Medicare inpatient prospective payment system rates by an average of about 2.5 percent for hospitals that meet EHR meaningful use criteria and submit quality measure data. In the rule, CMS finalized several proposals that WSHA supported in its comment letter including:

  • Repeal of the requirement it had finalized last year that hospitals report negotiated rates with Medicare Advantage plans on their Medicare cost report for purposes of CMS rate-setting;
  • Use of FY 2019 data, rather than FY 2020 data, to approximate expected FY 2022 inpatient hospital utilization for weight-setting purposes, in recognition of the impact of the COVID-19 emergency on inpatient utilization;
  • Extension of “New COVID-19 Treatments Add-on Payments” through the end of the fiscal year in which the public health emergency ends;
  • Temporary suppression of certain measures to its hospital quality measurement and value programs to avoid undue penalties due to the public health emergency.

CMS indicated the proposal to implement several provisions of the Consolidated Appropriations Act, including distributing 1,000 additional physician residency slots phased in over 5 years, will be addressed in a separate document rather than this final rule. WSHA supports the addition of the residency slots and commented that CMS should ensure equitable geographic distribution of the slots among rural and underserved regions.

WSHA is preparing a detailed summary of the final rule and hospital-specific impact analyses, which will be sent within the next few weeks to hospital’s chief financial officers and finance staff. (Andrew Busz,


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