Skip to main content

2022 Enacted Medicare Cuts Analysis

DataGen’s 2022 Enacted Medicare Cuts Analysis shows how hospitals have been impacted by existing Medicare fee-for-service provider payment cuts enacted by Congress to achieve Medicare payment policy and/or long-term deficit reduction goals. This analysis is provided to DataGen clients for advocacy purposes only.

The impacts shown in this analysis include the major legislative, regulatory and quality cuts enacted since 2010 and are described below. 

Enacted legislative cuts analyzed:

  • Medicare marketbasket, Medicare Disproportionate Share Hospital and quality adjustments authorized by the Affordable Care Act of 2010; note that for this analysis, quality adjustments are broken out into their own category; 
  • the effect of the 2.0% across-the-board sequestration reduction to payments authorized by the Budget Control Act of 2011, and the 4.0% sequestration reduction resulting from the calendar year 2021 triggering of the Statutory Pay-As-You-Go Act of 2010 (PAYGO); 
  • inpatient coding adjustment reductions authorized by the American Taxpayer Relief Act  of 2012; 
  • the reduction in bad debt payments authorized by the Middle Class Tax Relief and Job Creation Act of 2012;
  • payment adjustments for services paid for under the clinical laboratory fee schedule authorized by the Protecting Access to Medicare Act of 2014;
  • reduction of Outpatient Prospective Payment System payments to non-excepted, off-campus sites to a level equivalent to that paid under the Medicare Physician Fee Schedule, required by the Bipartisan Budget Act of 2015;
  • marketbasket adjustments authorized by the Medicare Access and CHIP Reauthorization Act of 2015;
  • change in Home Health PPS payments resulting from the implementation of the Patient-Driven Grouping Model; and
  • payment reductions authorized by the Bipartisan Budget Act of 2018, including adding hospice to the Inpatient PPS short-stay, post-acute care transfer policy.

Enacted regulatory cuts analyzed:

  • regulatory coding adjustments implemented by CMS;
  • 2.0% reduction to the CY 2016 outpatient marketbasket update for rate inflation due to packaging of laboratory payments;
  • long-term care hospital site-neutral payment adjustment implemented in the federal fiscal year 2016 final rule;
  • payment impacts resulting from CMS’ reduction in OPPS payments for 340B Program-purchased drugs;
  • reduction in payments for Wholesale Acquisition Cost-based drugs from WAC+6% to WAC+3%;
  • change in SNF PPS payment methodology from the RUG-IV system to the Patient-Driven Payment Model; and
  • reduction of OPPS payments for clinic services provided at excepted off-campus sites to a level equivalent to that paid under the Medicare Physician Fee Schedule.

The quality-based payment reform impacts analyzed reflect the IPPS payment adjustments related to three mandatory quality-based payment reform initiatives: the Value-Based Purchasing, Readmissions Reduction and Hospital-Acquired Conditions Reduction programs.

These cuts could have a major impact on hospital finances and operations in the coming years. To learn more about this impact and about how to thrive in alternative payment models, contact us today.

Comments

Popular posts from this blog

Alternative payment models: Strategies for success

In this edition of DataGen Insights, we look at how alternative payment model participants can ensure their processes and workflows are optimally set up for success. To help, DataGen listed the top three strategies all providers participating in APMs can employ and created a handy checklist to enable maximum returns and reduce financial risk. Please explore our website to learn more about our  products and services .  Download DataGen Insights today .  We hope you enjoy!

Why it's critical for Primary Care First participants to control and understand leakage

Patients' primary care visits outside of their attributed primary care office, also called “leaked” patient visits, can have unintended consequences for Primary Care First participants. Beginning July 2022, PCF Cohort 1 will face a reduction in population-based payments based on their leakage rate. The payment adjustment will be based on their 2021 claims data and will roll forward quarterly. To calculate your leakage rate, divide the number of qualifying visits and services your attributed beneficiaries have made to care centers outside of your practice (for example, visits to urgent care centers) by the total number of qualifying visits and services your attributed beneficiaries have made. Calculating primary care leakage with claims data alone comes with some unintended challenges. Unfortunately, some circumstances can unfairly and negatively impact a practice’s leakage rate: Nuances classifying care delivered by provider team members: It’s difficult to distinguish

Start the year off right: DataGen answers your Primary Care First questions

The Primary Care First Model , an alternative payment model offering an innovative payment structure for the delivery of advanced primary care, welcomed the involvement of Cohort 2 participants on Jan. 1 . This cohort, which was open to all primary care practices that met the eligibility criteria, will participate from 2022 to 2026. Participants in PCF Cohorts 1 and 2 can expect the following benefits: an opportunity to increase revenue with performance-based payments that reward participants for reducing acute hospital utilization; the ability to assess and improve performance through actionable, timely data; less administrative burden so providers can spend more time focusing on patient needs; and potential to become a Qualifying APM Participant , which includes eligibility for a 5% incentive payment and eliminates Merit-based Incentive Payment System reporting requirements. To ensure that new and prior participants succeed in this model, DataGen has compiled and answered some of t