News: AHA comments on the FY 2023 IRF PPS proposed rule

Following the fiscal year (FY) Inpatient Rehabilitation Facility (IRF) Prospective Payment System (PPS) proposed rule that CMS issued in late March, the American Hospital Association (AHA) has responded with comments on its proposed changes. The AHA letter provides many suggestions, including:

• That the permanent cap on wage index decreases should be implemented “in a non-budget-neutral manner";
• That temporary changes should be made to mitigate substantial increases in the high-cost outlier threshold; and
• That the data being used to identify cases for a transfer policy payment reduction should be checked for reliability.

Two topics the AHA commented on extensively include the proposed payment update and quality summary score.

First, the AHA suggested that the payment update warrants closer examination. The proposed change would only shift the labor-related share from 72.9% in FY 2022 to 73.2% in FY 2023, the letter stated, poorly aligning with AHA-commissioned research showing significant cost growth in labor, drugs, and supplies for hospitals, as well as the impact of rising inflation. Labor expenses have increased in part because of an increased reliance on contract staff. “January 2022 labor expenses per adjusted discharge are 52% higher than the pre-pandemic levels of January 2020,” the letter said. The AHA asked CMS to account for such increased costs in the 2023 final rule.

Also noteworthy is the letter’s critique on the implementation of a quality summary score. As is, the AHA asserted that a single score trying to capture performance on multiple quality measures for patients of various subgroups would be difficult to do accurately, and so would hinder more than help improve quality of care. Social risk factors in particular are hard to capture, the letter pointed out.

At best, the AHA predicted the score would be ineffective and conflate performance; at worst, it could average poor performance for certain subgroups of patients with high performance of others and let at-risk patient groups fall through the cracks. “We urge CMS to focus on strategies to improve the consistency of collected data and capabilities to analyze that data,” the AHA letter stated, “rather than blurring important details with a summary score.”

Editor’s Note: To read the AHA’s full letter to CMS, click here. To read all of the IRF updates proposed by CMS, click here.