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AzHHA Submits Comments on FY 2021 IPPS/LTCH Proposed Rule

AzHHA submitted a comment letter last week to the Centers for Medicare and Medicaid Services regarding its FY 2021 Proposed Rule on Hospital Inpatient Prospective Payment Systems (IPPS) and the Long-Term Care Hospital Prospective Payment System (LTCH).

In addition to payment updates and other policy changes, CMS proposed to require hospitals to include market-based payment rate information on the annual Medicare cost report and to incorporate this information into the IPPS Medicare Severity-Diagnosis Related Group (MS-DRG) relative weights beginning in FY 2024. In its comment letter, AzHHA echoed the American Hospital Association's position that, should the court system find the hospital price transparency rule to be unlawful, CMS would have no legal basis for requiring hospitals to disclose their median payer-specific negotiated charges by MS-DRG. Should the court system uphold the price transparency rule, AzHHA requested that CMS allow stakeholders another opportunity to comment on what was proposed in this rule.

AzHHA also commented on CMS's proposed changes to Medicare Disproportionate Share Hospital (DSH) payments. AzHHA asserted the proposed DSH payments for FY 2021 are artificially low because the empirically justified DSH payment formula utilizes historical data on the number of Medicaid enrollees, which does not take into account the significant economic changes and increases in Medicaid enrollment resulting from the COVID-19 pandemic. AzHHA urged CMS to adjust the Medicare DSH amount for FY 2021 to more accurately reflect the increased Medicaid enrollment for 2020 and 2021. Similarly, the distribution of the 75% pool reflects changes in the percentage of uninsured through 2018, which does not reflect the reality of today's extensive unemployment and economic hardship. AzHHA advocated for using a more accurate percentage of the uninsured, which would lead to more than $1 billion in additional funds in the 75% pool for uncompensated care payments.

AzHHA has commented on a number of bad debt policy changes proposed by CMS and urged CMS to withdraw a proposal to apply some of the proposed policy changes retroactively.