On-Demand Webinar: “CY 2027 Proposed Rules: OPPS, Home Health, and ESRD Updates Providers Need to Know”

This transcript was generated with AI and may contain errors or omissions. Please refer to the webinar recording for the most accurate version.

PYA Moderator [00:03]: Good morning, everyone. Welcome today’s episode of PYA’s Healthcare Regulatory Roundup webinar series. Today’s topic is calendar year 2027 proposed rules, OPPS, home health, and ESRD updates providers need to know. PYA is happy to present today’s webinar on this important topic. You may submit questions during the webinar by typing a message into the Q and A pane. Also, immediately following the end of the webinar, you’ll be asked to complete a short survey and submit any additional comments. Any questions posed during the webinar will be responded to via email after the webinar, you can customize your viewing experience by resizing, moving, or minimizing all of the panes within the webinar.net platform. We’ve posted a PDF copy of the presentation slides for your reference in the resources pane. Also, you’ll receive an email later today with a link to a copy of the slides and a recording of the webinar. With that, I would like to introduce our presenters, Kathy Reep and Carine Leslie.

Carine Leslie [01:11]: Thanks, Jennifer. We’ll go ahead and get started. Just going over today’s agenda. So today we’re going to cover the calendar year proposed rule for the outpatient prospective payment system. We’re going to cover various different topics, talking about site-neutrality, 340B drug programming, the inpatient-only list, quality reporting. Also going to go ahead and cover the end-stage renal disease prospective payment system proposed rule, and also the home health prospective payment proposed rule. And our goal is to be able to cover as much as we can within the time that we have allotted. But there’s a lot to cover with the rule that was dropped right before the Fourth of July holiday.

Kathy Reep [01:53]: This Kathy Reep, and so let me go ahead and start with the money. And as I always do when we do these webinars, I guess I have to stress the importance of you as a provider, and or as a state hospital association or other interested parties commenting on the proposed rules, whether it be the outpatient rule, the home health rule, or ESRD. If this important to you, if you’re concerned about any of the impacts. If there’s something that impacts you positively, it is worthy of a comment because it could be a positive impact for you and a negative for others. Therefore, you need to make sure that you tell your story in terms of comments on these rules. So I have to start with that: the importance of commenting on these proposed rules, the outpatient rule. The comments are due August 31st. So something that you need to make sure you get on your to-do list for the month of August is to look at your impact of these rules and to begin responding. Essentially, what we are looking at as far as the dollars go on the outpatient rule, is they have proposed a 2.4 percent increase to the base rate or the conversion factor. This calculated using the inpatient market basket of 3.2 percent less a productivity adjustment of 0.8. However, as is so frequently the case, while the mediand the announcements say a 2.4% increase, you’re going to find that it will not be that by the time we’re through with the discussion on this rule. So, the if if went with the 2.4% increase, we would be looking at an increase in the base rate from the current $91.42 up to a little over $102. Those hospitals that do not meet the hospital outpatient quality reporting requirements see a two percentage point reduction in their base rate. Carine is going to talk in a little bit about the requirements for or the changes to the hospital outpatient quality reporting, but recognize that it is important to do that in order to get your full payment rate. We’re going to talk about a number of different policy changes as it relates to the outpatient program, whether it be changes in outliers, whether it be changes in 340B, other such issues, by the time we get through all of the proposed policy changes, that 2.4 percent increase actually turns into a 1.9 percent increase over the current year, so you can see that’s going to go down. The outlier threshold is being increased from the current 6225 to over $7,000. That means it will be more difficult for a case to qualify. As an outlier, because you’re going to have to meet your cost-based threshold plus the $7,100, and so recognize that does make it more difficult to have an outlier payment. As has historically been the case, the ambulatory surgical center conversion factor Is tied to the OPPS rate. It is essentially somewhere around 60% of OPPS. So currently, the payment rate for the ASC rates is about $56. It’s going up to almost $58 in the ASCs. Again, you’re going to have to be a meet the quality reporting requirements required for ambulatory surgical centers to get that full increase in the rate. Otherwise, you would be looking at a 2% reduction to your base rates. Major change this year. Carine is going to address the inpatient-only list, similar to what went through last year, but Carine,

Carine Leslie [06:03]: thanks, Kathy. If you all recall, you know CMS is looking to phase out the inpatient-only list in three phases essentially. So, phase one occurred in calendar for this calendar year. We’re moving about 285 musculoskeletal services, so that left about 1,400 give or take services that are on the inpatient-only list. And so, what is being proposed in the calendar year for 2027 is to eliminate approximately 50% of those. Medicare is looking to essentially say we’re going to remove 50% this year, and then the remaining 50% for calendar year, or sorry, 50% for calendar year 2027, and the remaining services for calendar year 2028. So essentially, what is being proposed is there’s approximately 637 additional procedures that are being added to the OPPS list and removed from the IPO list. Those include services that are in maternity in the delivery section, respiratory, urinary, endocrine, digestive, auditory, multiple different types of services that are being performed currently that are on the inpatient-only list that they’re essentially indicating can be performed in the outpatient setting. To give you some sense and idea of what those services include, we’re talking things like radical mastectomies, open wedge biopsy of the lung, open partial nephrectomies that are currently being performed on the inpatient perspective in the inpatient setting, even partial distal gastrectomies. So, partial removal of a patient’s stomach is being considered to be removed from the inpatient-only list, as previously communicated in previous rules, those services and procedures that are being removed from the inpatient-only list, they will be considered exempt from the two midnight rules. So, meaning if that service is being performed in the outpatient setting, doesn’t necessarily mean that it can also be performed in the inpatient setting. They are still going to be allowed to be performed in the inpatient setting, as long as it’s medically necessary from a physician’s perspective. The goal, though, for CMS is to have the remaining six, 700 or so services that are remaining on the inpatient-only list to be removed calendar year 2028. Those include various types of services such as neurological, cardiovascular, and even some transplant services. And so, we’ll kind of see how that plays out as comments are being submitted and how the organizations and providers are deeming certain services to be able to be appropriately provided in the outpatient setting. As such, that happens as each of these services are moved from the inpatient-only list and removed off off of that. They are assigned to a specific APC, and so that they become payable under the OPPS reimbursement fee schedule. In addition to that, what is what is interesting to me that I saw is typically when services are moved from the IPO list and then put considered to be performed in the outpatient. There’s usually a lag between those services being performed in the hospital outpatient type of department to being performed within an ASC, what CMS has proposed this round is potentially adding 618 procedures of the 637 that are being removed to the ASC list. So they’re considering anything from repair of hernias to be included on the ASC list, as well as they are also removing them from the inpatient-only list.

Kathy Reep [09:45]: Thanks, Carine. One thing that I think is really important for you providers to do is to look at your volume on the inpatient side within those 637 procedures that are being removed. Look at. Any any the change in impact from the inpatient DRG to the outpatient APC reimbursement, and then work with your docs on really clearly identifying those patients going forward that need to be in the inpatient setting and getting the documentation accurate and thorough because recognize not only does this become an issue for fee-for-service Medicare, but it becomes an issue for Medicare Advantage as well. They are the Medicare Advantage plans are required to follow the inpatient-only list. However, as we see the services moving off of inpatient-only, we become concerned about where they might be directing patients to have care. Would they be directing them to an ASC? Would they be directing them and approving them in your outpatient setting? So something that you do need to address. For several years now, we’ve been talking about the 340B remedy. So let’s take a look at what they’re going to do this year or proposing to do this year. This where I urge you to comment because not sure about this remedy at all. This more of ripping the bandaid, I think. Last year, they said that in order to well, let’s do a little bit of history from a history perspective. When they modified the payment rate for 340B drugs to average sales price minus what they did at that point was they put those savings into the base rate. Therefore, providers, whether they qualified for 340B or not, received an increase in their base rate because of the litigation that caused the that the hospitals won and CMS had to make the providers whole, who had the reduction in their 340B payments, they also said the courts did not, but CMS said that they would also recoup those dollars that they had put into the base. They were going to do it over a period of years. They decided last year that they would do it at a half a percent a year, but they also said that would be for last year only, and that they would be considering to increase that beginning in 2027. And they said we are suggesting that perhaps 2% reduction would be an appropriate number. What they have come out with in terms of what is being proposed this year is to reduce the conversion factor not by a half a percent but by 3% for all non-drug items and services. This would take the quote-unquote payback period up to 2029 and would recoup the dollars that CMS feels it is owed in a much quicker manner. However, what does that mean to your payment rate? I said earlier that were looking at a base payment amount if we looked at that, the proposed increase of $102, a little over $102. Well, I just took it down to $99 based upon that payback reduction of that 3% So recognize that for certain services, you’re going to be looking at a different conversion rate. This would be on your non-drug items and services. Those hospitals who did not enroll in the Medicare program until after January one, 2018, when the reduction in the 340B payments began, they will receive the full payment amount of that $102, so they will not see a reduction in their base rate. Only those hospitals that found themselves receiving that bump up during the period of the reduction to the average sales price. Speaking of reductions to the average sales price, let’s talk about what they’re proposing to do from a 340B drug perspective, you know that we had a provision last year in the rule that the that CMS would conduct a 340B drug cost acquisition survey. They began that the beginning of this year. They had a range of a year’s worth of data that they collected from hospitals, or they tried to collect from hospitals. Essentially, only about 43, 44 percent of eligible hospitals responded to the survey. So, a large number of hospitals did not even respond, and out of those 44% of the hospitals who responded, only about 30% actually submitted usable acquisition cost information. Some of them just submitted a response, submitted the survey, but did not provide any. Information. So let us know. Let us recognize that we’re looking at.

Kathy Reep [15:06]: I, from a survey perspective, I would probably say questionable data, and the volume of the data that the decision to make payment adjustments on, you begin to question: Is this valid? But the court said CMS needed to conduct a survey. CMS has conducted a survey. The survey results, first of all, all those hospitals who are acquiring non 340B drugs were acquiring them at about 2.7 to 2.8 percent of above average sales price. Recognize that those non-340B drugs are currently reimbursed at average sales price plus 6 percent. So they’re now saying they’re not taking action on this, but they did say, going to look closely at this, that the actual acquisition cost was significantly lower than what they have been basing payment on. So concern about where that might take us in a future rule. However, they then said that as a result of the survey, the hospitals who are acquiring 340B drugs? They were acquired at about 33.4 percent below average sales price. Below average sales price. So now they are proposing to pay 340B acquired drugs at average sales price minus 33.4. Remember, we’re at minus 22.5 when we began the litigation on thissue several years ago. Now we’re looking at minus 33.4, and non-340B drugs would continue to be paid at average sales price plus 6% for now. CMS did say, as as it relates to this survey that they do plan to repeat the survey every four years. The reductions in payments do not apply to rural sole community hospitals, children’s hospitals, and the PPS exempt cancer hospitals. Going to talk a little bit more about commenting on this in a minute, but I just want you to look at what we’re talking about in terms of the reimbursement amount for these drugs, minus 33.4% Very concerning when you start looking at that reimbursement for those drugs. They are also indicating that there will be a requirement beginning with 2027, and recognize that we don’t have a final rule. We won’t have a final rule until November, but need to look at the impact of making changes to our billing system because all drug claims would be required to have a modifier. The first of all, there would be three modifiers. They have we know what two of them are. We do not know the third one, but JG would be a 340B drug, a subject to the payment reduction. A TB would be a 340B drug that continues to be paid at average sales price plus 6% and XX is literally what they published. Although that is a placeholder, they will give us an actual non XX modifier shortly. Look for that in a transmittal, but that is a placeholder to identify all separately payable non-340B drugs. So all claims related to that are separately payable are going to need to have a modifier ultimately by January. Now as they did before, I mentioned that 340B remedy. That when they did average sales price minus 22.5, what they also did was take the savings and put it into the base rate. Well, this exactly what they are proposing to do now. Although providers who are receiving that minus 33.4 percent reduction in the average sales price for the drugs, all providers, whether you qualify for 340B or not, are going to see an out an increase in your outpatient payments for non-drug services by an about 8.4 8.44% so going to see a bump in the payment rates based upon redistributing the savings from the minus 33.4. So this becomes a big issue if you are a 340B provider to comment on. You need to look at the impact of the 33.4% reduction versus the 8.44% increase in your base rate, and recognize that those providers who are not 340B providers who are going to see this increase in their base rate, there might be some comments on that particular issue as well. So we’ve got providers seeing increases. We’ve got providers who are seeing decreases and an increase in their base rate. So if you are looking at commenting on this proposed rule, I just want to call your attention to, I guess I would say, the law.

Kathy Reep [20:39]: We know that there was litigation from on the 340B issue that when the when the court said CMS, you’ve got regulations that say or legislation that says you must conduct a survey, and therefore CMS has quote unquote conducted a survey, and not a lot of providers responded to the survey, but they did conduct a survey. But I want you to go back to the actual language in the Social Security Act as it relates to that survey. The Social Security Act says that the Secretary shall conduct periodic surveys to determine the hospital acquisition cost for each specified covered outpatient drug for use in setting the payment rates, in order to generate a statistically significant estimate of the average hospital acquisition cost for each specified covered outpatient drug, recognize that the law says each drug; it does not say to do an across-the-board adjustment. What CMS said in their proposed rule, and I’ve given you the page number, it says we seek comment on our proposal to apply a single discount factor to the to the ASP for 340B acquired drugs, in lieu of calculating individual acquisition cost amounts for 340B acquired drugs. This like saying, okay, we did the survey and now we’re going to use the information how we want to, although the actual legislation says you conduct the survey, and this how you use it. So I do think that is worthy of a comment. The other issue that is worthy of a comment is based upon the actual number of surveys submitted, and is that truly going to be valid survey results? Also, the question in terms of any weighting, which my understanding they did not do, based upon volume of drug, so that if you have a particular drug that has extremely high volume versus one that does not, how that might skew the actual survey results as well. So I urge you to take a look at that as you move forward with commenting on these rules, of course, CMS does not leave alone the issue of site-neutral payments. Last year, or for this current calendar year, we saw that they expanded the reductions in payments for off-campus drug administration, even to those grandfathered or or exempted off off-campus departments. Well, they are taking this a step further, and they are also going to expand or proposing to out expand the reduction in payment rate to imaging services without contrast. These would be those services that are provided in those exempted or grandfathered off-campus provider-based departments. Those that were in existence prior to November two, 2015. Payment rate will be equal to 40% of the OPPS rate because that is CMS’s calculation of the equivalent rate to the physician fee schedule, the APCs that this applies to are listed on your slide. It does not apply to rural sole community hospitals, but unlike that 340B adjustment, this adjustment to imaging services is not budget neutral, so the savings that they get get from this program will not be redistributed into the into the providers. We remember that the Consolidated Appropriations Act that was signed into law earlier this year, Section 25 662 25 had some requirements related to off-campus provider-based departments. Essentially, they said the first requirement was that hospitals submit a provider-based status application attestation for all. Off-campus outpatient department, CMS has now published a standardized attestation form for your review and comment. Currently, the MACs, the Medicare Administrative Contractors, create their own templates. This would be a single template that would be required across all MACs, and again, I’ve given you the link to that. Might be worth a look, and whether or not you feel that there are issues that should be addressed as you submit comments. All off-campus hospital outpatient departments that were providing services on or before January one of 28, because this requirement is, you are required to be compliant with this by January one of 28. All service, all providers providing services prior to that January 120, 28 date, would be required to submit an attestation between January of 2026 and December of 2027, so you’ve got that period of time to submit your attestation.

Kathy Reep [26:07]: If you are a new department after January of 2028, you’re going to have to submit your attestation, and this I’m trying to figure out how you do during the two years prior to when bill services are delivered, so prior to actually providing services, you’re going to have to submit the attestation that you meet the requirements for provider-based. Okay, not sure how you do that within two years prior to when services are actually delivered. The second requirement that was included in the Consolidated Appropriations Act, is that all off-campus outpatient departments obtain a National Provider Identifier that is separate from the hospital’s main National Provider Identifier, and that they are also proposing that you not only get the NPI, but that you provide an update in PECOS as well as to this facility. I believe we’ve mentioned this in the past on webinars, but I’m going to stress it again. Recognize that this particular legislation in the Consolidated Appropriations Act calls for an attestation and an NPI for all off-campus outpatient departments. Recognize that the current regulations, current legislation-I’m sorry-calls or I’m sorry, regulations are written at the location level. So we get into this concern about that building, which is a location that has three departments in it. And does that mean three attestations and three National Provider Identifiers, or does that mean one for the building itself? So I think that too is worthy of a comment and clarification as a part of this rule, price transparency. I don’t think we could see an outpatient rule without some mention of price transparency. So let me touch on this. They are not actually proposing changes. They’re asking for your opinion about should we have changes. So there is a request for information regarding what they are calling strengthening the standardization and comparability of hospital price transparency data. Not a good acronym out of that one, but this what they are asking. They want some feedback from providers and perhaps those vendors who work with providers on their transparency files related to the free text fields that you have on your machine-readable file, things such as contract terms, outlier payments, the way you discuss those, what are your stop-loss provisions, rate tiers and carve-outs, how those are done in a free text form, and is that really consumer friendly? They are also looking for some feedback on how to enhance the comparability and usefulness of your shoppable services and that consumer friendly display. And then they are also, I think, this a very important issue, requesting feedback regarding the use of internet-based price estimator tools, where you are using a product, particularly through a vendor or a payer, where that an individual can look at rate information there, and currently you can use those internet-based price estimator tools in lieu of posting the 300 shoppable services. They’re asking for feedback about continuing that alternative as opposed to requiring. The actual posting of shoppable services. Carine?

Carine Leslie [30:07]: Alrighty. Outpatient quality reporting programs. What we’re seeing in some of the proposed rules for this year is that CMS is looking to push more towards, you know, patient outcomes that are more focused on the patient outcomes and away from those documentation outcomes and check boxes. So what they’re proposing for 2027 is one to remove the appropriate follow-up interval for normal colonoscopy. If you recall that, excuse me, that quality metric was implemented to be able to make sure that there wasn’t an increased frequency of colonoscopies being performed for patients and potentially creating harm for those patients, and so essentially that measure is confirming that one the colonoscopies were occurring at 10 year intervals and the follow ups were occurring at that at that interval as well for patients that were considered you know essentially average risk patients, and so CMS is considering right now in the proposed rule to remove that quality reporting requirement. But even though they are removing that quality reporting element or component, there is still other quality measures that are being tracked that are more patient outcome focused, and so they are proposing to continue to retain the seven-day risk standardized hospital visit rate for outpatient colonoscopy measure. Essentially, that quality measure is measuring, you know, within seven days if a patient is returning to the hospital after colonoscopy, whether that’s within the ED department or observation or being readmitted to the hospital, and so that measure is a more patient outcome focus as opposed to essentially checking the box to say I have documented you know the last time the patient had a colonoscopy within the last 10 years to be able to support that. There are also other areas within quality reporting where colonoscopy measures are being essentially tracked, so there’s the colorectal cancer screening for GI MIPS. That’s also capturing kind of the frequency and when colonoscopies are being performed, and also the Medicare Shared Savings Program. One component of the quality reporting program that I think is going to be a huge help to organizations is in regards to validation and revalidation consideration procedures in the OPPS component and piece. What Medicare is proposing is typically when you are, you know, submitting medical records for reconsideration, Medicare requests that you resubmit the full medical record in each instance of reconsideration. So, what they’re proposing for 2027 is not is for organizations to not have to resubmit those medical records. So that will reduce the administrative burden to organizations and essentially help them as they are, you know, providing reasoning behind the reconsiderations for specific procedures. However, if you do have, you know, revisions or edits to a medical record that would help support that reconsideration. It is important that you to submit that, or if Medicare specifically requests it, but it will no longer be a requirement to resubmit the medical record. And then we actually saw this in the some of the previous proposed rules, specifically the inpatient and skilled nursing, so Medicare is trying, as what I see, trying to make sure that patients are having the appropriate conversations with their providers regarding advance care planning. What you know, what that looks like, and so what they’re proposing is the adoption of you know the discussion and determination determination of advance care planning quality metric within the OPPS quality reporting as well. So it was proposed for IPPS. It was proposed for SNF. It was also proposed for inpatient rehab. We’re now seeing it being proposed for outpatient quality reporting, and I think that’s a way for Medicare to make sure that patients are having that conversation. They are making their decisions and those determinations, and it’s not being held up in one, you know, component or piece of their care plan. A few other items to note: most of this going to be really around the increase in technology and how that’s being utilized within healthcare. So previously, Medicare was utilizing SaaS, which is you know if you’re in other industries, SaaS means completely something else. But within healthcare, SaaS meant Software as a Service. What Medicare is proposing for 2027 is to change the term that’s being used for new technologies that are utilizing different types of methodologies. So they’re proposing to change it from SaaS to, I guess, SaMS. Essentially, so Software as a Medical Device.

Carine Leslie [34:47]: We’ve all seen the increase of software, AI, artificial intelligence, you know, clinical decision-making tools for physicians as they are treating patients, caring for patients, and all those components. And so they’re using utilizing a term that is more consistent with the care and consistent with the services that are being provided. With that, Medicare is also pulling in approximately 36 CPT HCPCS codes that were previously assigned to the new technology APCs. They’re pulling them into what? Excuse me, a different the SaMS grouping essentially, and they’re also implementing a status indicator, and so those 36 HCPCS codes will essentially be reassigned and paid separately. So potential increased reimbursement if those are the services that are being provided in away from the clinical APCs that were typical and what we’re used to this new technology APC grouping. The status indicator of zero or oh one will essentially help you know the system identify that these are new technologies that are utilizing that AI technology for the determination of care and services to the patient. Some of those, an example of one that they had included of the 36 was basically an AI-generated EKG. Typically, an EKG uses 12 leads. This one that would use less than that because it’s using technology to be able to provide the same information and assist the physician in making decisions, and so the reimbursement would be different than what the reimbursement is for a typical clinical EKG in that manner. With that, just to noteate that those status indicator those CPT codes and HCPCS codes that have that status indicator of O1, they will be considered for separate payment. But also, Medicare is looking to see: is there a potential opportunity that we need that there needs to be some consideration for those services to potentially be bundled if there’s multiple that are occurring at the same time? So, as an organization, if you see the increase of that use of that technology in your cardiovascular departments, in your radiology departments, understanding one, you’re using the appropriate code so that they are mapped to the appropriate APC and the status indicators there. But if you’re increasing that technology within your organization, paying attention to how those providers are using it and making sure that billing is being done appropriately as well. And then the other component or item within the OPPS is Medicare is adding about seven procedure codes or seven CPT codes for prior authorization as part of the botulinum toxin injection prior authorization program, those will be effective July one of 2027. Of those, there’s about approximately eight CPT codes. Seven of them are for chemo denervation procedures, plus an additional drug code that’s being added to that list. And so, those specific services will require prior authorization when they’re utilizing the Botox injection.

Kathy Reep [38:09]: Thanks, Carine. That kind of wraps up the discussion on the outpatient rule. If you have questions, don’t forget to put them in the questions pane, and we will get back to you and respond to your questions. But at the same time that we got the outpatient proposed rule, we also got the a couple of more proposed rules that are worthy of review and discussion. So the first one that I’m going to move with is the end-stage renal disease PPS proposed rule. Comments on this rule are due a little bit earlier than the outpatient rule. These comments are due on August 23rd. So let’s look. I again will cover the money, and Carine will cover quality. So some of the proposed payment changes. First of all, they are proposing an increase to the base rate of about 17, 18 dollars over the current rate. They are making a permanent adjustment or addition to the base rate of about $16 to account for inclusion of phosphate binders. So this something that they will be doing. It will be in the rate moving forward. I think my question there is whether or not that amount will change. When they say we are making a permanent addition to the base rate of, then I they didn’t seem to give room for that being adjusted based upon changes in cost moving forward. Overall, we are expecting about a 1.1 percent increase in the payment rate to ESRD facilities for hospital-based facilities. It will be about 2% and about 1.1 for the freestanding facilities. They are proposing to increase the labor-related share. In the ESRD PPS calculation, a significant increase in the base rate. So that becomes of something that you should do an analysis of. If you are in an area with a high wage index, you can see that this will have a significant increase, positive increase on your base rate moving forward. If you are in a low wage index area, it could have a negative impact on your payment rate moving forward. So I do urge you to take a look at that and the impact on your facility. They are looking to adjust the fixed outlier, the fixed dollar loss for outliers and the Medicare allowable payment amounts using more current data on the slide I have given you the breakdown based upon both pediatric beneficiaries and adult beneficiaries and the change in the fixed dollar loss and the Medicare allowable amount. You can see that the fixed dollar loss for pediatric beneficiaries increases significantly from $160, $162 to $206, and even more significantly, the fixed dollar loss for adult beneficiaries goes from about $15 to $115. They are saying that these adjustments are due to the utilization of drugs that are currently paid as traditional drug add-ons, and they are not no longer will be paid that way, they will actually be an outlier service moving forward. So this why we see that significant increase in the fixed dollar loss thresholds for both adults and pediatric beneficiaries. Carine?

Carine Leslie [41:57]: Thanks, Kathy. So quality reporting program in the in ESRD. So there’s a couple changes or several changes that are occurring. Most of them are to remove some of the quality measures or change some of the quality measures. So one of the first things that they’re considering is removing the hypercalcemia measure and replacing it with a hype with a chronic hyperphosphatemia measure. Say that 10 times fast. Again, as we as we’ve talked about earlier in this presentation and in other presentations, they’re looking to transition from okay, I’ve checked the box and I’ve calculated or or confirmed a particular number or documentation, but looking at overall patient outcomes and clinical care that’s being provided. So what is being proposed is essentially tracking the patient’s lab lab levels over a six month period, and so the goal is that patients are you know below a particular threshold for their phosphatemia if there are end stage renal patients, and so the goal is to track it over six months and come up with an average to make sure that there’s quality care that’s being provided to a patient. They’re also proposing to remove the medication reconciliation reporting measure. Again, they’ve seen such great, consistent, high performance from ESRD organizations that they don’t feel like it is a measure that needs to continue to be tracked and quantified. Which essentially, at the end of the day, will help an ESRD organization. It will remove the burden of collecting the information, documenting the information, and reporting that information for that particular measure. So you can get you can essentially count that one as a win if it’s approved in the final rule. Again, as you know, the CDC has made changes. CMS is also proposing to remove the COVID vaccination coverage amongst healthcare personnel, and so they’re because CDC has kind of changed their clinical recommendations for the COVID vaccine. And excuse me, they’re finding that this measure no longer is aligning with what’s currently happening within clinical care, and so they’re recommending or proposing to remove that. In regards to the bloodstream infection measure, CMS is looking to more to be more in line with what’s happening nationally and within the industry in regards to the national baseline for bloodstream infections, and so what they’re proposing is that they’re tracking what the healthcare practices are occurring within the industry, such as surveillance protocols, infection prevention efforts, and tracking that measure more again towards leaning towards patient outcomes and quality of care, in that in that particular sense, and then CMS is also proposing to make updates to the measure to make sure that the measure is you know confirming. Information that’s being excuse me confirming information that’s being provided to the industry. They’re also asking for comments of looking at dialysis facilities and conversations that they are having as far as patients’ life goals, whether that’s you know during their dialysis treatment or or end of life measures that are occurring in that well, in that sense as well, and so there’s the request to provide comments for a survey. So CMS has considered, has proposed a particular survey that’s asking specific questions that a patient is being provided, and so the survey includes eight components or eight elements. They’re looking at whether there’s an individual within the dialysis care team that has talked to the patient about their you know patient life goals in regards to ESRD care. Whether that patient believes that it’s important that a member of the care team has discussed their life goals, and so these are questions within the survey, looking at whether that member has met with the patient to talk about their life goals, making sure that they have felt comfortable in that conversation, in making those decisions with the care team, and whether that team member is consistent in make having those discussions with the patient. So we talk about the Dialysis Facility Discussion of Patient Life Goals and Patient-Reported Outcome Performance Measure, or what they have called the D-PaLS PRO-PM in the proposed rule. Is making sure that those conversations are happening again.

Carine Leslie [46:36]: I think it’s it’s a way to make sure that at every point that a patient is being discussed, whether that’s in the inpatient or the outpatient, or if they’re an ESRD patient, that they are receiving those conversations and they’re talking about their either their life goals, their their healthcare outcomes, and and things of that sort. So that covers it for ESRD PPS and want to as we get closer to the end of our presentation, we do have some information to talk about home health PPS, the proposed rule, the comments for that for for this particular rule is due august 31. So I want to just do a brief kind of overview of the PDGM and how it how it is documented and what the expectations are and how all of that is calculated and some of the proposed rules that are being that are included in the information today. So there are several components when you’re trying to determine the patient’s overall home health resource groups. So, the third components are the clinical groups, which are basically put into 12 different categories, and those are based on the principal diagnosis that’s submitted on the claim. Then you have the comorbidity adjustment, which again is based on diagnoses that are listed on a claim, but those are secondary diagnoses and issues and concerns that the patient is having. Then you have the admission source. So where is the patient coming from? Are they coming from the community? Are they coming from an institution where they recently admitted, and then they’re being requested to receive home healthcare services? And then we have the functional impairment, which is based on the OASIS items. And so there’s there’s a various there’s various components to that is being considered. Part of the information that’s within the proposed rule is that CMS is looking to make some changes to two components within you know these four different categories. The very first one being the functional impairment. They’re looking to revise how the points are calculated and how you determine the level of the clinical grouping from whether that’s low, medium, or high. The other is making updates to the comorbidity adjustment. CMS is proposing to include 21 subgroups to the low comorbidity adjustment grouping, and then 100 to the high comorbidity adjustment interaction sub grouping. So they’re looking to make some adjustments there and increase what’s considered and counted in that perspective. With that, and in addition to that, so and Kathy, correct me if I’m wrong, but I believe a few years ago Medicare made adjustments to the payment period from the 60-day period to the to 30 days. With those adjustments, they’re having to kind of rethink and recalculate the case mix index and the wage index that’s that’s being determined for these home health grouping categories. And so, what they’re proposing and what they’re taking is based on when those were, based on when that shift went from the 60-day payment period to the 30-day payment period. That is impacting everything from the wage index, the determination of outliers, the determination of the add-on payment. What is. Counted as part of the partial period because those thresholds have changed, and so they’re basing some of that information on 2025 data. They’re making some adjustments as far as what is going to be considered add-on services or add-on factors for such as skilled nursing care, speech therapy, OT therapy services, and then they’re also making adjustments to the fixed dollar loss ratio. And I don’t know if Kathy are going to cover that on your next slide, but they’re making a potential change to a 0.29 adjustment based on 2025 claims. They’re going to finalize what that percentage will be come the time that the final rule comes out in November. Once they have all of the 2025 claims datanalyzed and reviewed.

Kathy Reep [50:53]: Speaking of money, let’s see. And yes, we do have the fixed dollar loss ratio on the next slide, going down from 0.37 to 0.29, so that becomes an issue as you try to determine whether a case is an outlier. They are publishing an increase into the base rate of 2.4% I said they are publishing; it’s not what you’re getting, but they are publishing in the media 2.4 percent increase in the base rate, which is about 240 million dollars over the current year. Again, calculated as a 3.1 percent increase in the market basket, less 1 percent productivity and a 0.3 percent increase related to outlier payments, that change in the fixed dollar loss threshold for outliers would increase payments by about $50 million. However, however, there is a budget neutrality adjustment that is being proposed related to the bringing things back to the basically, if prior to the conversion to PDGM, where were we, and therefore making sure that we are in a we haven’t increased the spend based upon the change to the new 30 day system. So any behavioral adjustments, behavioral offsets, etc. have to be adjusted by budget neutrality. So they are now proposing a 3% reduction to the base rate to address the behavioral changes that occurred when went from a 30-day from a 60-day methodology to a 30-day methodology, so that I’ll show you the dollars momentarily. But that does have an increase. Although what we see is published a 2.4% increase to for the home health agencies, you’re not going to get that. They are also raising the issue, and I think it’s very interesting that they are doing this from a home health perspective, home health agency perspective, of moving away from using the hospital wage index to using a home health specific wage index, and perhaps rather than having home health agencies submit wage information similar to what hospitals have to do, perhaps they should use Bureau of Labor Statistics to actually calculate a wage index by geographic area. This something that I think is worthy of a comment. Not only the rate issue that you might want to look at, but you perhaps need to take a look at what would BLS data do to adjust payment rates for your home health agency compared to other using the hospital wage index. I have a feeling, and I think this something that we found when we looked at BLS data for hospitals, that it does have a detrimental impact on the actual wage adjusters. Here is what they are proposing. Remember, right? We’ve got to go back. Okay, 2.4% increase. What they’re publishing, however, our current rate; those are for the hospitals that are meaning who submit your quality data. The current payment rate is 2101 26. That 2.4% increase actually takes you down to $2,092.27. So it is actually a slight decrease in your payment rate because that 2.4% increase less 3% budget neutrality adjustment actually makes this a negative increase for home health agencies. So again, something that we need to take a look at because of the way they’re making this change, and then let’s talk about quality. Carine?

Carine Leslie [55:20]: I was muted. Apologies for that. While there are not any changes to the actual measures for any of the quality measures for home health, there are being changes to how things are being reported as far as timing and what the period of time that will be utilized, how they’re trying to align specific programs. So we’re going to talk about kind of each of the pieces and components. So let’s first talk about quality reporting program. What I’m what I’m seeing is that, and this was identified. I think it was maybe the inpatient rehab or the inpatient psych quality reporting system is they’re trying to reduce the time frame to provide information out there and into the public public in regards to, you know, how an organization is doing from a quality perspective, so they are shifting the four and a half month time frame that most organizations typically typically had, which would essentially by the time you close that quality reporting period and you have four and a half months, you’re looking at eight to nine months before quality information is reported out to the public, what they’re proposing is to change that to for the information to be reported by the organization, the quality reporting information to be reported by the 15th day of the of the end of the quarter, so of the month, so there would be basically you would reduce the lag information by three months. So if you think about it, q1 January January one to march 31, typically you would have four months, four and a half months to be able to report that information. Medicare is proposing that all of the quality reporting would be submitted by by basically may 15, there are adjustments if you know the 15th falls on a Friday, Saturday, or Sunday. There’s going to be adjustments to when that information needs to be reported within the proposed rule. There’s actually a table of timing so organizations can go look and start planning. But that’s going to create an administrative burden to be able to go from I have four and a half months to provide quality reporting information to now I basically have 45 days from the end of that period of time. In regards to value-based purchasing, while there’s no proposed changes, they are looking to more align the quality reporting and the expanded value-based purchasing model, and so a couple of the things that were notated were lining up the time frame for appeals and suppression of the review process between the two different quality reporting programs, making sure that the The measure reporting periods are consistent, and so aligning them so that they are consistent. And so the hope and the goal is that if they can align some of these reporting programs, organizations won’t have to one keep track of okay, I need to report this information at this point and this information at that point. But they are happening at the same time, so as an organization, if you’re as you’re submitting the information, if that becomes more in line with timing and things of those in that perspective, want to make sure that you are aware that those are those are coming up. One of the other components is expand is the value-based purchasing and the quality reporting of patient care star rating measures to more align the information that’s being provided and reported there as well. It should be noted that CMS is not necessarily looking for comments on the list of opportunities for you know potentially potential potentially. aligning between the two programs, they’re basically providing awareness that is their goal. And then, in regards to the home health caps in OASIS, they’re changing the calendar year that the information will be based on. Currently, we’re on a July one to june 30 time frame. They’re looking to change that to a calendar year, so basically january 1 to december 31. The hope is that will provide payment updates and facilitate more alignment within the quality reporting program for organizations, and so it will hopefully decrease or not increase the burden on organizations with that change in the quality reporting piece.

Kathy Reep [59:48]: We just have one more quick item. This was included in the home health rule, but I want to call your attention to the fact that home health rule, but is very clear that this applies to. All provider types. So this not something that you need to just say, “Oh, that doesn’t apply to us. It does. So the changes that they are proposing are would be applicable to all Medicare providers and suppliers, and this addresses such issues such as Medicare enrollment and revocation of your enrollment, so all revocations of Medicare enrollment would be retroactive to the date of noncompliance. Currently, it is 30 days after the notification that you’re being removed. Well, no, this going to be retroactive and therefore retroactive to the date of the activity that caused you to be disenrolled or your enrollment revoked. They are adding new grounds for revocation or denial of enrollment. The grounds include you’ve been suspended or had a license revoked in another state, you are suspended from Medicaid or another federal health program. You’re deemed to present, and I think that deeming to present is a question in terms of who’s defining that. Deemed to present a high risk of fraud, waste, or abuse, and they are tying that to an area with a geographic concentration at high risk. So, if you are in an area that is deemed to have a lot of fraudulent providers, this could be an issue that winds up impacting your actual enrollment or revocation of enrollment. They have also said that there would revocation grounds would include being convicted of a federal or state misdemeanor related to a sexual assault or financial misconduct within the last 10 years. So very concerning in terms of what they’re doing here, what they’re proposing, and what they might be investigating. Virtually, as it says that they are going, they have the ability to go back 10 years. The expanded policy will not just apply to an the individual who did this inappropriate action, but it would also apply to entity owners, managing employers, and organizations. So it could be much broader, something that I urge you to take a look on, look at, no matter what type of provider you are, because this could have serious implications, particularly when they start talking about high-risk geographic concentrations and how that could impact existing providers. So, with that, I appreciate y’all taking an extra couple of minutes, and I turn it over to Jennifer.

PYA Moderator [1:02:45]: Thanks to our presenters, Kathy and Carine. Please remember to stay on the line once the webinar disconnects to complete a short survey. Later today, you’ll receive an email with a link to their contact information and a recording of the webinar. Also, the slides and recordings for every episode of PYA’s Healthcare Regulatory Roundup series are available in the Thought Leadership section of PYA’s website, pyapc.com. While at our website, you may register for other PYA webinars and learn more about the full range of services offered by PYA. Please remember to stay on the line once the webinar disconnects to complete the short survey and post any additional questions you may have. On behalf of PYA, thank you for joining us. Have a great rest of your day.