CMS Issues CY 2022 Final Rule for Inpatient Prospective Payment System

On August 2, 2021, the Centers for Medicare & Medicaid Services (CMS) issued a final rule that updates Medicare payment policies for hospitals under the Inpatient Prospective Payment System (IPPS) for fiscal year (FY) 2022. These rules cover inpatient hospital discharges on or after October 1, 2021. Highlights are described below:

  • CMS is finalizing to use FY 2019 claims data to set the FY IPPS payment rates rather than the FY 2020 claims data due to the impact of the COVID-19 PHE.
  • There is an increase in payment rates for acute care hospitals under IPPS that successfully participate in the Hospital Inpatient Quality Reporting (IQR) and demonstrate meaningful use of Electronic Health Record (EHR) program by approximately 2.5 percent.
  • There are a total of 72,748 ICD-10-CM codes, including 159 additions, 20 revised titles and 32 deletions. There are a total of 78,220 ICD-10-PCS codes, including 191 new codes, 62 revised titles and 107 deleted codes. CMS has finalized both ICD-10-CM and ICD-CM-PCS proposed changes as reflected in table 6A.
  • After public comments, CMS is finalizing the policy to maintain the severity level designation of all “unspecified” diagnosis codes currently designated as a CC or MCC, where there are other codes available in that code subcategory that further specify the anatomic site.
  • Revisions to the surgical hierarchy for MDC 5 were finalized based on frequency methodology.
  • CMS is finalizing to rebase (move the base year cost structure for IPPS from 2014 to 2018) and revise (change data sources used in the price index) the IPPS market basket to reflect a 2018 base year using major cost categories.
  • Changes to the Hospital Readmissions Reduction Program have been finalized based on the COVID-19 PHE impact for hospitals and inpatient services, including the Extraordinary Circumstances Exceptions (ECE) policy.
  • Changes to the performance standards for the Hospital Value-Based Purchasing (VBP) program have been finalized based on the COVID-19 PHE impact for hospitals and inpatient services, including a measure suppression policy for the duration of the PHE; and revisions for scoring and payment methodology.
  • For hospitals excluded from IPPS payment, CMS has finalized the rate-of-percentage of 2.7, which will be applied to the FY 2021 target amounts to calculate the FY 2022 target amounts. 

The complete IPPS final rule summary can be found on the GORE Coding Resource Center website under “Education – CMS Rules Updates”: https://gore.rccsclients.com/education/rules-updates/.