Medicare Program; FY 2024 Inpatient Psychiatric Facilities Prospective Payment System-Rate Update, 21238-21314 [2023-07122]

Agencies

• Centers for Medicare & Medicaid Services
• DEPARTMENT OF HEALTH AND HUMAN SERVICES

[Federal Register Volume 88, Number 68 (Monday, April 10, 2023)]
[Proposed Rules]
[Pages 21238-21314]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-07122]



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Vol. 88

Monday,

No. 68

April 10, 2023

Part II





Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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42 CFR Part 412





Medicare Program; FY 2024 Inpatient Psychiatric Facilities Prospective 
Payment System--Rate Update; Proposed Rule

Federal Register / Vol. 88 , No. 68 / Monday, April 10, 2023 / 
Proposed Rules

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 412

[CMS-1783-P]
RIN 0938-AV06


Medicare Program; FY 2024 Inpatient Psychiatric Facilities 
Prospective Payment System--Rate Update

AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of 
Health and Human Services (HHS).

ACTION: Proposed rule.

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SUMMARY: This proposed rule would update the prospective payment rates, 
the outlier threshold, and the wage index for Medicare inpatient 
hospital services provided by Inpatient Psychiatric Facilities (IPF), 
which include psychiatric hospitals and excluded psychiatric units of 
an acute care hospital or critical access hospital. These proposed 
changes would be effective for IPF discharges occurring during the 
Fiscal Year (FY) beginning October 1, 2023 through September 30, 2024 
(FY 2024). In addition, this proposed rule discusses proposals on 
quality measures and reporting requirements under the Inpatient 
Psychiatric Facilities Quality Reporting (IPFQR) Program with proposed 
changes beginning with the FY 2024 payment determination through 
changes beginning with the FY 2028 payment determination.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, by June 5, 2023.

ADDRESSES: In commenting, please refer to file code CMS-1783-P.
    Comments, including mass comment submissions, must be submitted in 
one of the following three ways (please choose only one of the ways 
listed):
    1. Electronically. You may submit electronic comments on this 
regulation to https://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-1783-P, P.O. Box 8010, 
Baltimore, MD 21244-8010.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-1783-P, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Mollie Knight (410) 786-7948 or 
Bridget Dickensheets (410) 786-8670, for information regarding the 
market basket update or the labor-related share.
    Nick Brock (410) 786-5148 or Theresa Bean (410) 786-2287, for 
information regarding the regulatory impact analysis.
    Lauren Lowenstein-Turner, (410) 786-4507, for information regarding 
the inpatient psychiatric facilities quality reporting program.

SUPPLEMENTARY INFORMATION: 
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. We post all comments 
received before the close of the comment period on the following 
website as soon as possible after they have been received: https://www.regulations.gov. Follow the search instructions on that website to 
view public comments. CMS will not post on Regulations.gov public 
comments that make threats to individuals or institutions or suggest 
that the individual will take actions to harm the individual. CMS 
continues to encourage individuals not to submit duplicative comments. 
We will post acceptable comments from multiple unique commenters even 
if the content is identical or nearly identical to other comments.

Availability of Certain Tables Exclusively Through the Internet on the 
CMS Website

    Addendum A to this proposed rule summarizes the FY 2024 IPF PPS 
payment rates, outlier threshold, cost of living adjustment factors 
(COLA) for Alaska and Hawaii, national and upper limit cost-to-charge 
ratios, and adjustment factors. In addition, the B Addenda to this 
proposed rule shows the complete listing of ICD-10 Clinical 
Modification (CM) and Procedure Coding System (PCS) codes, the FY 2024 
IPF PPS comorbidity adjustment, and electroconvulsive therapy (ECT) 
procedure codes. The A and B Addenda are available online at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientPsychFacilPPS/tools.html.
    Tables setting forth the FY 2024 Wage Index for Urban Areas Based 
on Core Based Statistical Area (CBSA) Labor Market Areas and the FY 
2024 Wage Index Based on CBSA Labor Market Areas for Rural Areas are 
available exclusively through the internet, on the CMS website at 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/IPFPPS/WageIndex.html.

I. Executive Summary

A. Purpose

    This proposed rule would rebase and revise the market basket for 
the Inpatient Psychiatric Facility Prospective Payment System (IPF PPS) 
to reflect a 2021 base year, and update the prospective payment rates, 
the outlier threshold, and the wage index for Medicare inpatient 
hospital services provided by Inpatient Psychiatric Facilities (IPFs) 
for discharges occurring during Fiscal Year (FY) 2024, (beginning 
October 1, 2023 through September 30, 2024). This rule also includes a 
proposal to modify our regulations to make it easier for hospitals to 
open new excluded psychiatric units paid under the IPF PPS. In 
addition, this proposed rule includes a request for information to 
inform revisions to the IPF PPS adjustments for FY 2025, as required by 
the Consolidated Appropriations Act, 2023 (hereafter referred to as 
CAA, 2023) (Pub. L. 116-260). Lastly, this proposed rule discusses 
proposals on quality measures and reporting requirements under the 
Inpatient Psychiatric Facilities Quality Reporting (IPFQR) Program.

B. Summary of the Major Provisions

1. Inpatient Psychiatric Facilities Prospective Payment System (IPF 
PPS)
    For the IPF PPS, we propose to:
     Modify the regulations to allow the status of a hospital 
psychiatric unit to be changed from not excluded to excluded, and 
therefore paid under the IPF PPS at any time during a cost reporting 
period if certain requirements are met.
     Solicit comments to inform revisions to IPF PPS payments 
for FY 2025, as required by the CAA, 2023.
     Revise and rebase the IPF market basket to reflect a 2021 
base year.
     Make technical rate setting updates: The IPF PPS payment 
rates would be adjusted annually for inflation, as well as statutory 
and other policy factors.
    This rule proposes to update:
    ++ The IPF PPS Federal per diem base rate from $865.63 to $892.58.

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    ++ The IPF PPS Federal per diem base rate for providers who failed 
to report quality data to $875.25.
    ++ The electroconvulsive therapy (ECT) payment per treatment from 
$372.67 to $384.27.
    ++ The ECT payment per treatment for providers who failed to report 
quality data to $376.81.
    ++ The labor-related share from 77.4 percent to 78.5 percent.
    ++ The wage index budget-neutrality factor to 1.0011.
    ++ The fixed dollar loss threshold amount from $24,630 to $34,750 
to maintain estimated outlier payments at 2 percent of total estimated 
aggregate IPF PPS payments.
2. Inpatient Psychiatric Facilities Quality Reporting (IPFQR) Program
    For the IPFQR Program, we propose to:
     Adopt the Facility Commitment to Health Equity measure 
beginning with the FY 2026 payment determination;
     Adopt the Screening for Social Drivers of Health measure 
beginning with voluntary reporting of CY 2024 data and beginning with 
required reporting of CY 2025 data for the FY 2027 payment 
determination;
     Adopt the Screen Positive Rate for Social Drivers of 
Health measure beginning with voluntary reporting of CY 2024 data and 
beginning with required reporting of CY 2025 data for the FY 2027 
payment determination;
     Adopt the Psychiatric Inpatient Experience (PIX) survey to 
measure patient experience of care in the IPF setting beginning with 
voluntary reporting of CY 2025 data and beginning with required 
reporting of CY 2026 data for the FY 2028 payment determination;
     Modify the Coronavirus disease 2019 (COVID-19) Vaccination 
Coverage Among Health Care Personnel (HCP) measure to apply the Centers 
for Disease Control and Prevention's (CDC's) definition of ``up-to-
date'' for COVID-19 vaccination, incorporating booster doses, beginning 
with fourth quarter CY 2023 data for FY 2025 payment determination and, 
following this first single-quarter reporting period, reporting for 
full calendar year beginning with CY 2024 data for FY 2026 payment 
determination;
     Remove the following two measures beginning with the FY 
2025 payment determination and subsequent years:
    ++ Patients Discharged on Multiple Antipsychotic Medications with 
Appropriate Justification (HBIPS-5); and
    ++ Tobacco Use Brief Intervention Provided or Offered and Tobacco 
Use Brief Intervention Provided (TOB-2/2a) measure;
     Adopt a data validation pilot program starting with data 
submitted in CY 2025 and continuing until a full data validation 
program is proposed and adopted in future rulemaking; and
     Codify the IPFQR Program's procedural requirements related 
to statutory authority, participation and withdrawal, data submission, 
quality measure retention and removal, extraordinary circumstances 
exceptions, and public reporting at 42 CFR 412.433 Procedural 
requirements under the IPFQR Program.

C. Summary of Impacts

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    Provision description          Total transfers & cost reductions
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FY 2024 IPF PPS payment        The overall economic impact of this
 update.                        proposed rule is an estimated $55
                                million in increased payments to IPFs
                                during FY 2024.
FY 2024 IPFQR Program update.  The overall economic impact of the IPFQR
                                Program proposals in this proposed rule
                                is an estimated decrease of 505,247
                                hours in information collection burden
                                resulting in a savings of $12,431,700.
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II. Background

A. Overview of the Legislative Requirements of the IPF PPS

    Section 124 of the Medicare, Medicaid, and State Children's Health 
Insurance Program Balanced Budget Refinement Act of 1999 (BBRA) (Pub. 
L. 106-113) required the establishment and implementation of an IPF 
PPS. Specifically, section 124 of the BBRA mandated that the Secretary 
of the Department of Health and Human Services (the Secretary) develop 
a per diem payment perspective system (PPS) for inpatient hospital 
services furnished in psychiatric hospitals and excluded psychiatric 
units including an adequate patient classification system that reflects 
the differences in patient resource use and costs among psychiatric 
hospitals and excluded psychiatric units. ``Excluded psychiatric unit'' 
means a psychiatric unit of an acute care hospital or of a Critical 
Access Hospital (CAH), which is excluded from payment under the 
Inpatient Prospective Payment System (IPPS) or CAH payment system, 
respectively. These excluded psychiatric units will be paid under the 
IPF PPS.
    Section 405(g)(2) of the Medicare Prescription Drug, Improvement, 
and Modernization Act of 2003 (MMA) (Pub. L. 108-173) extended the IPF 
PPS to psychiatric distinct part units of CAHs.
    Sections 3401(f) and 10322 of the Patient Protection and Affordable 
Care Act (Pub. L. 111-148) as amended by section 10319(e) of that Act 
and by section 1105(d) of the Health Care and Education Reconciliation 
Act of 2010 (Pub. L. 111-152) (hereafter referred to jointly as ``the 
Affordable Care Act'') added subsection (s) to section 1886 of the 
Social Security Act (the Act).
    Section 1886(s)(1) of the Act titled, ``Reference to Establishment 
and Implementation of System,'' refers to section 124 of the BBRA, 
which relates to the establishment of the IPF PPS.
    Section 1886(s)(2)(A)(i) of the Act requires the application of the 
productivity adjustment described in section 1886(b)(3)(B)(xi)(II) of 
the Act to the IPF PPS for the rate year (RY) beginning in 2012 (that 
is, a RY that coincides with a FY) and each subsequent RY.
    Section 1886(s)(2)(A)(ii) of the Act required the application of an 
``other adjustment'' that reduced any update to an IPF PPS base rate by 
a percentage point amount specified in section 1886(s)(3) of the Act 
for the RY beginning in 2010 through the RY beginning in 2019. As noted 
in the FY 2020 IPF PPS final rule, for the RY beginning in 2019, 
section 1886(s)(3)(E) of the Act required that the other adjustment 
reduction be equal to 0.75 percentage point; that was the final year 
the statute required the application of this adjustment. Because FY 
2021 was a RY beginning in 2020, FY 2021 was the first-year section 
1886(s)(2)(A)(ii) of the Act did not apply since its enactment.
    Sections 1886(s)(4)(A) through (D) of the Act require that for RY 
2014 and each subsequent RY, IPFs that fail to report required quality 
data with respect to such a RY will have their annual update to a 
standard Federal rate for discharges reduced by 2.0 percentage points. 
This may result in an annual update being less than 0.0 for a RY, and 
may result in payment rates for the upcoming RY being less than such 
payment rates for the preceding RY. Any reduction for failure to report 
required quality data will apply only to the RY involved, and the 
Secretary will not consider such reduction in

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computing the payment amount for a subsequent RY. In addition, section 
4125 of the CAA, 2023 requires that a patients' perspective of care 
quality measure be added to the IPFQR Program not later than for FY 
2031. Additional information about the specifics of the current IPFQR 
Program is available in the FY 2022 IPF PPS and Quality Reporting 
Updates for FY Beginning October 1, 2021 final rule (86 FR 42624 
through 42661).
    Section 4125 of the CAA, 2023 also requires revisions to the 
Medicare prospective payment system (PPS) for psychiatric hospitals and 
psychiatric units. Specifically, section 4125(a) of the CAA, 2023 
amends section 1886(s) of the Act by adding a new paragraph (5) that 
requires the Secretary to collect data and information beginning no 
later than October 1, 2023, as the Secretary determines appropriate, to 
inform revisions to IPF PPS payments. In addition, the Secretary is 
required to implement revisions to the methodology for determining the 
payment rates under the IPF PPS for FY 2025 as the Secretary determines 
appropriate.
    To implement and periodically update the IPF PPS, we have published 
various proposed and final rules and notices in the Federal Register. 
For more information regarding these documents, see the CMS website at 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientPsychFacilPPS/?redirect=/InpatientPsychFacilPPS/.

B. Overview of the IPF PPS

    On November 15, 2004, we published the IPF PPS final rule in the 
Federal Register (69 FR 66922). The November 2004 IPF PPS final rule 
established the IPF PPS, as required by section 124 of the BBRA and 
codified at 42 CFR part 412, subpart N. The November 2004 IPF PPS final 
rule set forth the Federal per diem base rate for the implementation 
year (the 18-month period from January 1, 2005 through June 30, 2006), 
and provided payment for the inpatient operating and capital costs to 
IPFs for covered psychiatric services they furnish (that is, routine, 
ancillary, and capital costs, but not costs of approved educational 
activities, bad debts, and other services or items that are outside the 
scope of the IPF PPS). Covered psychiatric services include services 
for which benefits are provided under the fee-for-service Part A 
(Hospital Insurance Program) of the Medicare program.
    The IPF PPS established the Federal per diem base rate for each 
patient day in an IPF derived from the national average daily routine 
operating, ancillary, and capital costs in IPFs in FY 2002. The average 
per diem cost was updated to the midpoint of the first year under the 
IPF PPS, standardized to account for the overall positive effects of 
the IPF PPS payment adjustments, and adjusted for budget-neutrality.
    The Federal per diem payment under the IPF PPS is comprised of the 
Federal per diem base rate described previously and certain patient- 
and facility-level payment adjustments for characteristics that were 
found in the regression analysis to be associated with statistically 
significant per diem cost differences; with statistical significance 
defined as p less than 0.05. A complete discussion of the regression 
analysis that established the IPF PPS adjustment factors can be found 
in the November 2004 IPF PPS final rule (69 FR 66933 through 66936).
    The patient-level adjustments include age, Diagnosis-Related Group 
(DRG) assignment, and comorbidities, as well as adjustments to reflect 
higher per diem costs at the beginning of a patient's IPF stay and 
lower costs for later days of the stay. Facility-level adjustments 
include adjustments for the IPF's wage index, rural location, teaching 
status, a cost-of-living adjustment for IPFs located in Alaska and 
Hawaii, and an adjustment for the presence of a qualifying emergency 
department (ED).
    The IPF PPS has additional payment policies for outlier cases, 
interrupted stays, and a per treatment payment for patients who undergo 
ECT. During the IPF PPS mandatory 3-year transition period, stop-loss 
payments were also provided; however, since the transition ended as of 
January 1, 2008, these payments are no longer available.

C. Annual Requirements for Updating the IPF PPS

    Section 124 of the BBRA did not specify an annual rate update 
strategy for the IPF PPS and was broadly written to give the Secretary 
discretion in establishing an update methodology. In the November 2004 
IPF PPS final rule (69 FR 66922), we implemented the IPF PPS using the 
following update strategy:
     Calculate the final Federal per diem base rate to be 
budget-neutral for the 18-month period of January 1, 2005 through June 
30, 2006.
     Use a July 1 through June 30 annual update cycle.
     Allow the IPF PPS first update to be effective for 
discharges on or after July 1, 2006 through June 30, 2007.
    In developing the IPF PPS, and to ensure that the IPF PPS can 
account adequately for each IPF's case-mix, we performed an extensive 
regression analysis of the relationship between the per diem costs and 
certain patient and facility characteristics to determine those 
characteristics associated with statistically significant cost 
differences on a per diem basis. That regression analysis is described 
in detail in our November 28, 2003 IPF PPS proposed rule (68 FR 66923; 
66928 through 66933) and our November 15, 2004 IPF PPS final rule (69 
FR 66933 through 66960). For characteristics with statistically 
significant cost differences, we used the regression coefficients of 
those variables to determine the size of the corresponding payment 
adjustments.
    In the November 2004 IPF PPS final rule, we explained the reasons 
for delaying an update to the adjustment factors, derived from the 
regression analysis, including waiting until we have IPF PPS data that 
yields as much information as possible regarding the patient-level 
characteristics of the population that each IPF serves. We indicated 
that we did not intend to update the regression analysis and the 
patient-level and facility-level adjustments until we complete that 
analysis. Until that analysis is complete, we stated our intention to 
publish a notice in the Federal Register each spring to update the IPF 
PPS (69 FR 66966).
    On May 6, 2011, we published a final rule in the Federal Register 
titled, ``Inpatient Psychiatric Facilities Prospective Payment System--
Update for Rate Year Beginning July 1, 2011 (RY 2012)'' (76 FR 26432), 
which changed the payment rate update period to a RY that coincides 
with a FY update. Therefore, final rules are now published in the 
Federal Register in the summer to be effective on October 1st. When 
proposing changes in IPF payment policy, a proposed rule would be 
issued in the spring and the final rule in the summer to be effective 
on October 1st. For a detailed list of updates to the IPF PPS, we refer 
readers to our regulations at 42 CFR 412.428.
    The most recent IPF PPS annual update was published in a final rule 
on July 29, 2022 in the Federal Register titled, ``Medicare Program; FY 
2023 Inpatient Psychiatric Facilities Prospective Payment System--Rate 
Update and Quality Reporting--Request for Information'' (87 FR 46846), 
which updated the IPF PPS payment rates for FY 2023. That final rule 
updated the IPF PPS Federal per diem base rates that were published in 
the FY 2022 IPF PPS Rate Update final rule (86 FR 42608) in accordance 
with our established policies.

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III. Provisions of the FY 2024 IPF PPS Payment Update

A. Proposed Rebasing and Revising of the Market Basket for the IPF PPS

1. Background
    Originally, the input price index used to develop the IPF PPS was 
the Excluded Hospital with Capital market basket. This market basket 
was based on 1997 Medicare cost reports for Medicare-participating 
inpatient rehabilitation facilities (IRFs), IPFs, long-term care 
hospitals (LTCHs), cancer hospitals, and children's hospitals. Although 
``market basket'' technically describes the mix of goods and services 
used in providing health care at a given point in time, this term is 
also commonly used to denote the input price index (that is, cost 
category weights and price proxies) derived from that market basket. 
Accordingly, the term ``market basket,'' as used in this document, 
refers to an input price index.
    Since the IPF PPS inception, the market basket used to update IPF 
PPS payments has been rebased and revised to reflect more recent data 
on IPF cost structures. We last rebased and revised the market basket 
applicable to the IPF PPS in the FY 2020 IPF PPS final rule (84 FR 
38426 through 38447), where we adopted a 2016-based IPF market basket. 
The 2016-based IPF market basket used Medicare cost report data for 
both Medicare-participating freestanding psychiatric hospitals and 
hospital-based psychiatric units. References to the historical market 
baskets used to update IPF PPS payments are listed in the FY 2016 IPF 
PPS final rule (80 FR 46656). For the FY 2024 IPF PPS proposed rule, we 
propose to rebase and revise the IPF market basket to reflect a 2021 
base year.
2. Overview of the Proposed 2021-Based IPF Market Basket
    The proposed 2021-based IPF market basket is a fixed-weight, 
Laspeyres-type price index. A Laspeyres price index measures the change 
in price, over time, of the same mix of goods and services purchased in 
the base period. Any changes in the quantity or mix of goods and 
services (that is, intensity) purchased over time relative to a base 
period are not measured.
    The index itself is constructed in three steps. First, a base 
period is selected (in this proposed rule, we propose to use 2021 as 
the base period) and total base period costs are estimated for a set of 
mutually exclusive and exhaustive cost categories. Each category is 
calculated as a proportion of total costs. These proportions are called 
cost weights. Second, each cost category is matched to an appropriate 
price or wage variable, referred to as a price proxy. In nearly every 
instance, these price proxies are derived from publicly available 
statistical series that are published on a consistent schedule 
(preferably at least on a quarterly basis). Finally, the cost weight 
for each cost category is multiplied by the level of its respective 
price proxy. The sum of these products (that is, the cost weights 
multiplied by their price index levels) for all cost categories yields 
the composite index level of the market basket in a given period. 
Repeating this step for other periods produces a series of market 
basket levels over time. Dividing an index level for a given period by 
an index level for an earlier period produces a rate of growth in the 
input price index over that timeframe.
    As noted, the market basket is described as a fixed-weight index 
because it represents the change in price over time of a constant mix 
(quantity and intensity) of goods and services needed to provide IPF 
services. The effects on total costs resulting from changes in the mix 
of goods and services purchased subsequent to the base period are not 
measured. For example, an IPF hiring more nurses after the base period 
to accommodate the needs of patients would increase the volume of goods 
and services purchased by the IPF, but would not be factored into the 
price change measured by a fixed-weight IPF market basket. Only when 
the index is rebased would changes in the quantity and intensity be 
captured, with those changes being reflected in the cost weights. 
Therefore, we rebase the market basket periodically so that the cost 
weights reflect recent changes in the mix of goods and services that 
IPFs purchase to furnish inpatient care between base periods.
3. Proposed Rebasing and Revising of the IPF PPS Market Basket
    As discussed in the FY 2020 IPF PPS final rule (84 FR 38426 through 
38447), the 2016-based IPF market basket reflects the Medicare cost 
reports for both freestanding and hospital-based IPFs. Beginning with 
FY 2024, we propose to rebase and revise the IPF market basket to a 
2021 base year reflecting the 2021 Medicare cost report data submitted 
by both freestanding and hospital-based IPFs. We provide a detailed 
description of our proposed methodology used to develop the 2021-based 
IPF market basket below. This proposed methodology is generally similar 
to the methodology used to develop the 2016-based IPF market basket. We 
solicit public comment on our proposed methodology for developing the 
2021-based IPF market basket.
a. Development of Cost Categories and Weights for the Proposed 2021-
Based IPF Market Basket
(1) Use of Medicare Cost Report Data
    We propose a 2021-based IPF market basket that consists of seven 
major cost categories and a residual derived from the 2021 Medicare 
cost reports (CMS Form 2552-10, OMB No. 0938-0050) for freestanding and 
hospital-based IPFs. The seven major cost categories are Wages and 
Salaries, Employee Benefits, Contract Labor, Pharmaceuticals, 
Professional Liability Insurance (PLI), Home Office/Related 
Organization Contract Labor, and Capital. The cost reports include 
providers whose cost reporting period began on or after October 1, 2020 
and before October 1, 2021. As noted previously, the current IPF market 
basket is based on 2016 Medicare cost reports and therefore, reflects 
the 2016 cost structure for IPFs. As described in the FY 2023 IPF PPS 
final rule (87 FR 46849), we received comments on the FY 2023 IPF PPS 
proposed rule (87 FR 19418 through 19419) where stakeholders expressed 
concern that the proposed market basket update inadequately reflected 
the input price inflation experienced by IPFs, particularly as a result 
of the COVID-19 PHE. These commenters stated that the PHE, along with 
inflation, has significantly driven up operating costs. Specifically, 
some commenters noted changes to labor markets that led to the use of 
more contract labor, a trend that we verified in analyzing the Medicare 
cost reports through 2021. Therefore, we believe it is appropriate to 
incorporate more recent data to reflect updated cost structures for 
IPFs, and so we propose to use 2021 as the base year because we believe 
that the Medicare cost reports for this year represent the most recent 
complete set of Medicare cost report data available for developing the 
proposed IPF market basket at the time of this rulemaking. Given the 
potential impact of the PHE on the Medicare cost report data, we will 
continue to monitor these data going forward and any changes to the IPF 
market basket would be proposed in future rulemaking.
    Similar to the Medicare cost report data used to develop the 2016-
based IPF market basket, the Medicare cost report data for 2021 show 
large differences between some providers' Medicare length of stay (LOS) 
and total facility LOS. Our goal has always been to measure cost 
weights that are reflective

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of case mix and practice patterns associated with providing services to 
Medicare beneficiaries. Therefore, we propose to limit our selection of 
Medicare cost reports used in the proposed 2021-based IPF market basket 
to those facilities that had a Medicare LOS within a comparable range 
of their total facility average LOS. The Medicare average LOS for 
freestanding IPFs is calculated from data reported on line 14 of 
Worksheet S-3, part I. The Medicare average LOS for hospital-based IPFs 
is calculated from data reported on line 16 of Worksheet S-3, part I. 
To derive the proposed 2021-based IPF market basket, for those IPFs 
with an average facility LOS of greater than or equal to 15 days, we 
propose to include IPFs where the Medicare LOS is within 50 percent 
(higher or lower) of the average facility LOS. For those IPFs whose 
average facility LOS is less than 15 days, we propose to include IPFs 
where the Medicare LOS is within 95 percent (higher or lower) of the 
facility LOS. We propose to apply this LOS edit to the data for IPFs to 
exclude providers that serve a population whose LOS would indicate that 
the patients served are not consistent with a LOS of a typical Medicare 
patient. This is the same LOS edit applied to the 2016-based IPF market 
basket.
    Applying these trims to the approximate 1,370 total cost reports 
(freestanding and hospital-based) resulted in roughly 1,250 IPF 
Medicare cost reports with an average Medicare LOS of 13 days, average 
facility LOS of 10 days, and Medicare utilization (as measured by 
Medicare inpatient IPF days as a percentage of total facility days) of 
16 percent. Providers excluded from the proposed 2021-based IPF market 
basket (about 120 Medicare cost reports) had an average Medicare LOS of 
21 days, average facility LOS of 41 days, and a Medicare utilization of 
3 percent. Of those excluded, about 62 percent of these were 
freestanding providers; on the other hand, freestanding providers 
represent about 38 percent of all IPFs. We note that 70 percent of 
those excluded from the 2016-based IPF market basket using this LOS 
edit were freestanding providers.
    We then propose to use the cost reports for IPFs that met this 
requirement to calculate the costs for the seven major cost categories 
(Wages and Salaries, Employee Benefits, Contract Labor, Professional 
Liability Insurance, Pharmaceuticals, Home Office/Related Organization 
Contract Labor, and Capital) for the market basket. These are the same 
categories used for the 2016-based IPF market basket. Also, as 
described in section III.A.3.a.(4) of this proposed rule, and as done 
for the 2016-based IPF market basket, we propose to use the Medicare 
cost report data to calculate the detailed capital cost weights for the 
Depreciation, Interest, Lease, and Other Capital-related cost 
categories. We also propose to rename the Home Office Contract Labor 
cost category to the Home Office/Related Organization Contract Labor 
cost category to be more consistent with the Medicare cost report 
instructions.
    Similar to the 2016-based IPF market basket major cost weights, for 
the majority of the proposed 2021-based IPF market basket cost weights, 
we propose to divide the costs for each cost category by total Medicare 
allowable costs (routine, ancillary and capital)--costs that are 
eligible for payment through the IPF PPS (we note that we use total 
facility medical care costs as the denominator to derive both the PLI 
and Home Office/Related Organization Contract Labor cost weights). We 
next describe our proposed methodology for deriving the cost levels 
used to derive the proposed 2021-based IPF market basket.
(a) Total Medicare Allowable Costs
    For freestanding IPFs, we propose that total Medicare allowable 
costs would be equal to the sum of total costs for the Medicare 
allowable cost centers as reported on Worksheet B, part I, column 26, 
lines 30 through 35, 50 through 76 (excluding 52 and 75), 90 through 
91, and 93.
    For hospital-based IPFs, we propose that total Medicare allowable 
costs would be equal to the total costs for the IPF inpatient unit 
after the allocation of overhead costs (Worksheet B, part I, column 26, 
line 40) and a proportion of total ancillary costs reported on 
Worksheet B, part I, column 26, lines 50 through 76 (excluding 52 and 
75), 90 through 91, and 93.
    We propose to calculate total ancillary costs attributable to the 
hospital-based IPF by first deriving an ``IPF ancillary ratio'' for 
each ancillary cost center. The IPF ancillary ratio is defined as the 
ratio of IPF Medicare ancillary costs for the cost center (as reported 
on Worksheet D-3, column 3 for hospital-based IPFs) to total Medicare 
ancillary costs for the cost center (equal to the sum of Worksheet D-3, 
column 3 for all relevant PPSs [that is, IPPS, IRF, IPF and skilled 
nursing facility (SNF)]). For example, if hospital-based IPF Medicare 
laboratory costs represent about 2 percent of the total Medicare 
laboratory costs for the entire facility, then the IPF ancillary ratio 
for laboratory costs would be 2 percent. We believe it is appropriate 
to use only a portion of the ancillary costs in the market basket cost 
weight calculations since the hospital-based IPF only utilizes a 
portion of the facility's ancillary services. We believe the ratio of 
reported IPF Medicare costs to reported total Medicare costs provides a 
reasonable estimate of the ancillary services utilized, and costs 
incurred, by the hospital-based IPF. We propose that this IPF ancillary 
ratio for each cost center is also used to calculate Wages and 
Salaries, and Capital costs as described below.
    Then, for each ancillary cost center, we propose to multiply the 
IPF ancillary ratio for the given cost center by the total facility 
ancillary costs for that specific cost center (as reported on Worksheet 
B, part I, column 26) to derive IPF ancillary costs. For example, the 2 
percent IPF ancillary ratio for laboratory cost center would be 
multiplied by the total ancillary costs for laboratory (Worksheet B, 
part I, column 26, line 60). The IPF ancillary costs for each cost 
center are then added to total costs for the IPF inpatient unit after 
the allocation of overhead costs (Worksheet B, part I, column 26, line 
40) to derive total Medicare allowable costs.
    We propose to use these methods to derive levels of total Medicare 
allowable costs for IPF providers. This is the same methodology used 
for the 2016-based IPF market basket. We propose that these total 
Medicare allowable costs for the IPF will be the denominator for the 
cost weight calculations for the Wages and Salaries, Employee Benefits, 
Contract Labor, Pharmaceuticals, and Capital cost weights. With this 
work complete, we then set about deriving cost levels for the seven 
major cost categories and then derive a residual cost weight reflecting 
all other costs not classified.
(b) Wages and Salaries Costs
    For freestanding IPFs, we propose to derive Wages and Salaries 
costs as the sum of routine inpatient salaries (Worksheet A, column 1, 
lines 30 through 35), ancillary salaries (Worksheet A, column 1, lines 
50 through 76 (excluding 52 and 75), 90 through 91, and 93), and a 
proportion of overhead (or general service cost centers in the Medicare 
cost reports) salaries. Since overhead salary costs are attributable to 
the entire IPF, we only include the proportion attributable to the 
Medicare allowable cost centers. We propose to estimate the proportion 
of overhead salaries that are attributed to Medicare allowable costs 
centers by multiplying the ratio of Medicare allowable area salaries 
(Worksheet A, column 1, lines 30 through 35, 50

[[Page 21243]]

through 76 (excluding 52 and 75), 90 through 91, and 93) to total non-
overhead salaries (Worksheet A, column 1, line 200 less Worksheet A, 
column 1, lines 4 through 18) times total overhead salaries (Worksheet 
A, column 1, lines 4 through 18). This is a similar methodology as used 
in the 2016-based IPF market basket.
    For hospital-based IPFs, we propose to derive Wages and Salaries 
costs as the sum of the following salaries attributable to the 
hospital-based IPF: Inpatient routine salary costs (Worksheet A, column 
1, line 40); overhead salary costs; ancillary salary costs; and a 
portion of overhead salary costs attributable to the ancillary 
departments.
(i) Overhead Salary Costs
    We propose to calculate the portion of overhead salary cost 
attributable to hospital-based IPFs by first calculating an IPF 
overhead salary ratio, which is equal to the ratio of total facility 
overhead salaries (as reported on Worksheet A, column 1, lines 4-18) to 
total facility noncapital overhead costs (as reported on Worksheet A, 
column 1 and 2, lines 4-18). We then propose to multiply this IPF 
overhead salary ratio by total noncapital overhead costs (sum of 
Worksheet B, part I, columns 4 through 18, line 40, less Worksheet B, 
part II, columns 4 through 18, line 40). This methodology assumes the 
proportion of total costs related to salaries for the overhead cost 
center is similar for all inpatient units (that is, acute inpatient or 
inpatient psychiatric).
(ii) Ancillary Salary Costs
    We propose to calculate hospital-based IPF ancillary salary costs 
for a specific cost center (Worksheet A, column 1, lines 50 through 76 
(excluding 52 and 75), 90 through 91, and 93) as salary costs from 
Worksheet A, column 1, multiplied by the IPF ancillary ratio for each 
cost center as described in section III.A.3.a.(1)(a) of this proposed 
rule. The sum of these costs represents hospital-based IPF ancillary 
salary costs.
(iii) Overhead Salary Costs for Ancillary Cost Centers
    We propose to calculate the portion of overhead salaries 
attributable to each ancillary department (lines 50 through 76 
(excluding 52 and 75), 90 through 91, and 93) by first calculating 
total noncapital overhead cost attributable to each specific ancillary 
department (sum of Worksheet B, part I, columns 4-18, less Worksheet B, 
part II, column 26). We then identify the portion of these total 
noncapital overhead cost for each ancillary department that is 
attributable to the hospital-based IPF by multiplying these costs by 
the IPF ancillary ratio as described in section III.A.3.a.(1)(a) of 
this proposed rule. We then sum these estimated IPF Medicare allowable 
noncapital overhead costs for all ancillary departments (cost centers 
50 through 76, 90 through 91, and 93). Finally, we then identify the 
portion of these IPF Medicare allowable noncapital overhead cost that 
are attributable to Wages and Salaries by multiplying these costs by 
the IPF overhead salary ratio as described in section 
III.A.3.a.(1)(b)(i) of this proposed rule. This is the same methodology 
used to derive the 2016-based IPF market basket.
(c) Employee Benefits Costs
    Effective with the implementation of CMS Form 2552-10, we began 
collecting Employee Benefits and Contract Labor data on Worksheet S-3, 
part V.
    For the 2021 Medicare cost report data, the majority of IPF 
providers did not report data on Worksheet S-3, part V. Two percent of 
freestanding IPFs and roughly 48 percent of hospital-based IPFs 
reported Employee Benefits data on Worksheet S-3, part V. Two percent 
of freestanding IPFs and roughly 13 percent of hospital-based IPFs 
reported Contract Labor data on Worksheet S-3, part V. We continue to 
encourage all providers to report these data on the Medicare cost 
report.
    For freestanding IPFs, we propose that Employee Benefits cost would 
be equal to the data reported on Worksheet S-3, part V, column 2, line 
2. We note that while not required to do so, freestanding IPFs also may 
report Employee Benefits data on Worksheet S-3, part II, which is 
applicable to only IPPS providers. Similar to the method for the 2016-
based IPF market basket, for those freestanding IPFs that report 
Worksheet S-3, part II, data, but not Worksheet S-3, part V, we propose 
to use the sum of Worksheet S-3, part II, lines 17, 18, 20, and 22, to 
derive Employee Benefits costs.
    For hospital-based IPFs, we propose to calculate total benefit cost 
as the sum of inpatient unit benefit cost, a portion of ancillary 
departments benefit costs, and a portion of overhead benefits 
attributable to both the routine inpatient unit and the ancillary 
departments. For those hospital-based IPFs that report Worksheet S-3, 
part V data, we propose inpatient unit benefit costs be equal to 
Worksheet S-3, part V, column 2, line 3. Given the limited reporting on 
Worksheet S-3, part V, we propose that for those hospital-based IPFs 
that do not report these data, we calculate inpatient unit benefits 
cost using a portion of benefits cost reported for Excluded areas on 
Worksheet S-3, part II. We propose to calculate the ratio of inpatient 
unit salaries (Worksheet A, column 1, line 40) to total excluded area 
salaries (sum of Worksheet A, column 1, lines 20, 23, 40 through 42, 
44, 45, 46, 94, 95, 98 through 101, 105 through 112, 114, 115 through 
117, 190 through 194). We then propose to apply this ratio to Excluded 
area benefits (Worksheet S-3, part II, column 4, line 19) to derive 
inpatient unit benefits cost for those providers that do not report 
benefit costs on Worksheet S-3, part V.
    We propose the ancillary departments benefits and overhead benefits 
(attributable to both the inpatient unit and ancillary departments) 
costs are derived by first calculating the sum of hospital-based IPF 
overhead salaries as described in section III.A.3.a.(1)(b)(i) of this 
proposed rule, hospital-based IPF ancillary salaries as described in 
section III.A.3.a.(1)(b)(ii) of this proposed rule and hospital-based 
IPF overhead salaries for ancillary cost centers as described in 
section III.A.3.a.(1)(b)(iii) of this proposed rule. This sum is then 
multiplied by the ratio of total facility benefits to total facility 
salaries, where total facility benefits is equal to the sum of 
Worksheet S-3, part II, column 4, lines 17-25, and total facility 
salaries is equal to Worksheet S-3, part II, column 4, line 1.
(d) Contract Labor Costs
    Contract Labor costs are primarily associated with direct patient 
care services. Contract labor costs for other services such as 
accounting, billing, and legal are calculated separately using other 
government data sources as described in section III.A.3.a.(3) of this 
proposed rule. To derive contract labor costs using Worksheet S-3, part 
V, data for freestanding IPFs, we propose Contract Labor costs be equal 
to Worksheet S-3, part V, column 1, line 2. As we noted for Employee 
Benefits, freestanding IPFs also may report Contract Labor data on 
Worksheet S-3, part II, which is applicable to only IPPS providers. For 
those freestanding IPFs that report Worksheet S-3, part II data, but 
not Worksheet S-3, part V, we propose to use the sum of Worksheet S-3, 
part II, column 4, lines 11 and 13, to derive Contract Labor costs.
    For hospital-based IPFs, we propose that Contract Labor costs be 
equal to Worksheet S-3, part V, column 1, line 3. Reporting of this 
data continues to be somewhat limited; therefore, we continue to 
encourage all providers to report these data on the Medicare cost 
report. Given the limited reporting on

[[Page 21244]]

Worksheet S-3, part V, we propose that for those hospital-based IPFs 
that do not report these data, we calculate Contract Labor costs using 
a portion of contract labor costs reported on Worksheet S-3, part II. 
We propose to calculate the ratio of contract labor costs (Worksheet S-
3, part II, column 4, lines 11 and 13) to PPS salaries (Worksheet S-3, 
part II, column 4, line 1 less the sum of Worksheet S-3, part II, 
column 4, lines 3, 401, 5, 6, 7, 701, 8, 9, 10 less Worksheet A, column 
1, line 20 and 23). We then propose to apply this ratio to total 
inpatient routine salary costs (Worksheet A, column 1, line 40) to 
derive contract labor costs for those providers that do not report 
contract labor costs on Worksheet S-3, part V.
(e) Pharmaceuticals Costs
    For freestanding IPFs, we propose to calculate pharmaceuticals 
costs using non-salary costs reported on Worksheet A, column 7, less 
Worksheet A, column 1, for the pharmacy cost center (line 15) and drugs 
charged to patients cost center (line 73).
    For hospital-based IPFs, we propose to calculate pharmaceuticals 
costs as the sum of a portion of the non-salary pharmacy costs and a 
portion of the non-salary drugs charged to patient costs reported for 
the total facility. We propose that non-salary pharmacy costs 
attributable to the hospital-based IPF would be calculated by 
multiplying total pharmacy costs attributable to the hospital-based IPF 
(as reported on Worksheet B, part I, column 15, line 40) by the ratio 
of total non-salary pharmacy costs (Worksheet A, column 2, line 15) to 
total pharmacy costs (sum of Worksheet A, columns 1 and 2 for line 15) 
for the total facility. We propose that non-salary drugs charged to 
patient costs attributable to the hospital-based IPF would be 
calculated by multiplying total non-salary drugs charged to patient 
costs (Worksheet B, part I, column 0, line 73 plus Worksheet B, part I, 
column 15, line 73 less Worksheet A, column 1, line 73) for the total 
facility by the ratio of Medicare drugs charged to patient ancillary 
costs for the IPF unit (as reported on Worksheet D-3 for hospital-based 
IPFs, column 3, line 73) to total Medicare drugs charged to patient 
ancillary costs for the total facility (equal to the sum of Worksheet 
D-3, column 3, line 73 for all relevant PPS [that is, IPPS, IRF, IPF 
and SNF]).
(f) Professional Liability Insurance Costs
    For freestanding and hospital-based IPFs, we propose that 
Professional Liability Insurance (PLI) costs (often referred to as 
malpractice costs) would be equal to premiums, paid losses and self-
insurance costs reported on Worksheet S-2, columns 1 through 3, line 
118--the same data used for the 2016-based IPF market basket. For 
hospital-based IPFs, we propose to assume that the PLI weight for the 
total facility is similar to the hospital-based IPF unit since the only 
data reported on this worksheet is for the entire facility, as we 
currently have no means to identify the proportion of total PLI costs 
that are only attributable to the hospital-based IPF. However, when we 
derive the cost weight for PLI for both hospital-based and freestanding 
IPFs, we use the total facility medical care costs as the denominator 
as opposed to total Medicare allowable costs. For freestanding IPFs and 
hospital-based IPFs, we propose to derive total facility medical care 
costs as the sum of total costs (Worksheet B, part I, column 26, line 
202) less non-reimbursable costs (Worksheet B, part I, column 26, lines 
190 through 201). Our assumption is that the same proportion of 
expenses are used among each unit of the hospital.
(g) Home Office/Related Organization Contract Labor Costs
    For hospital-based IPFs, we propose to calculate the Home Office/
Related Organization Contract Labor costs using data reported on 
Worksheet S-3, part II, column 4, lines 1401, 1402, 2550, and 2551. 
Similar to the PLI costs, these costs are for the entire facility. 
Therefore, when we derive the cost weight for home office/related 
organization contract labor costs, we use the total facility medical 
care costs as the denominator (reflecting the total facility costs 
(Worksheet B, part I, column 26, line 202) less the nonreimbursable 
costs reported on lines 190 through 201).
(h) Capital Costs
    For freestanding IPFs, we propose that capital costs would be equal 
to Medicare allowable capital costs as reported on Worksheet B, part 
II, column 26, lines 30 through 35, 50 through 76 (excluding 52 and 
75), 90 through 91, and 93.
    For hospital-based IPFs, we propose that capital costs would be 
equal to IPF inpatient capital costs (as reported on Worksheet B, part 
II, column 26, line 40) and a portion of IPF ancillary capital costs. 
We calculate the portion of ancillary capital costs attributable to the 
hospital-based IPF for a given cost center by multiplying total 
facility ancillary capital costs for the specific ancillary cost center 
(as reported on Worksheet B, part II, column 26) by the IPF ancillary 
ratio as described in section III.A.3.a.(1)(a) of this proposed rule.
(2) Final Major Cost Category Computation
    After we derive costs for each of the major cost categories and 
total Medicare allowable costs for each provider using the Medicare 
cost report data as previously described, we propose to address data 
outliers using the following steps. First, for the Wages and Salaries, 
Employee Benefits, Contract Labor, Pharmaceuticals, and Capital cost 
weights, we first divide the costs for each of these five categories by 
total Medicare allowable costs calculated for the provider to obtain 
cost weights for the universe of IPF providers. We then propose to trim 
the data to remove outliers (a standard statistical process) by: (1) 
requiring that major expenses (such as Wages and Salaries costs) and 
total Medicare allowable operating costs be greater than zero; and (2) 
excluding the top and bottom 5 percent of the major cost weight (for 
example, Wages and Salaries costs as a percent of total Medicare 
allowable operating costs). We note that missing values are assumed to 
be zero consistent with the methodology for how missing values were 
treated in the 2016-based IPF market basket. After these outliers have 
been excluded, we sum the costs for each category across all remaining 
providers. We then divide this by the sum of total Medicare allowable 
costs across all remaining providers to obtain a cost weight for the 
proposed 2021-based IPF market basket for the given category.
    The proposed trimming methodology for the Home Office/Related 
Organization Contract Labor and PLI cost weights are slightly different 
than the proposed trimming methodology for the other five cost 
categories as described above. For these cost weights, since we are 
using total facility medical care costs rather than Medicare allowable 
costs associated with IPF services, we propose to trim the freestanding 
and hospital-based IPF cost weights separately.
    For the PLI cost weight, for each of the providers, we first divide 
the PLI costs by total facility medical care costs to obtain a PLI cost 
weight for the universe of IPF providers. We then propose to trim the 
data to remove outliers by: (1) requiring that PLI costs are greater 
than zero and are less than total facility medical care costs; and (2) 
excluding the top and bottom 5 percent of the major cost weight 
trimming freestanding and hospital-based providers separately. After 
removing these outliers, we are left with a trimmed data set for both 
freestanding

[[Page 21245]]

and hospital-based providers. We propose to separately sum the costs 
for each category (freestanding and hospital-based) across all 
remaining providers. We next divide this by the sum of total facility 
medical care costs across all remaining providers to obtain both a 
freestanding cost weight and hospital-based cost weight. Lastly, we 
propose to weight these two cost weights together using the Medicare 
allowable costs from the sample of freestanding and hospital-based IPFs 
that passed the PLI trim (63 percent for hospital-based and 37 percent 
for freestanding IPFs) to derive a PLI cost weight for the proposed 
2021-based IPF market basket.
    For the Home Office/Related Organization Contract Labor cost 
weight, for each of the providers, we first divide the home office/
related organization contract labor costs by total facility medical 
care costs to obtain a Home Office/Related Organization Contract Labor 
cost weight for the universe of IPF providers. Similar to the other 
market basket costs weights, we propose to trim the Home Office/Related 
Organization Contract Labor cost weight to remove outliers. Since not 
all hospital-based IPFs will have home office/related organization 
contract labor costs (approximately 80 percent of hospital-based IPFs 
report having a home office), we propose to trim the top one percent of 
the Home Office/Related Organization Contract Labor cost weight. Using 
this proposed methodology, we calculate a Home Office/Related 
Organization Contract Labor cost weight for hospital-based IPFs of 5.1 
percent.
    Freestanding IPFs are not required to complete Worksheet S-3, part 
II. Therefore, to estimate the Home Office/Related Organization 
Contract Labor cost weight for freestanding IPFs, we propose the 
following methodology:
    Step 1: Using hospital-based IPFs with a home office and also 
passing the 1 percent trim as described, we calculate the ratio of the 
Home Office/Related Organization Contract Labor cost weight to the 
Medicare allowable non-salary, non-capital cost weight (Medicare 
allowable non-salary, non-capital costs as a percent of total Medicare 
allowable costs).
    Step 2: We identify freestanding IPFs that report a home office on 
Worksheet S-2, line 140--roughly 87 percent of freestanding IPFs. We 
propose to calculate a Home Office/Related Organization Contract Labor 
cost weight for these freestanding IPFs by multiplying the ratio 
calculated in Step 1 by the Medicare allowable non-salary, noncapital 
cost weight for those freestanding IPFs with a home office.
    Step 3: We then calculate the freestanding IPF cost weight by 
multiplying the Home Office/Related Organization Contract Labor cost 
weight in Step 2 by the total Medicare allowable costs for freestanding 
IPFs with a home office as a percent of total Medicare allowable costs 
for all freestanding IPFs (87 percent), which derives a freestanding 
Home Office/Related Organization Contract Labor cost weight of 4.2 
percent.
    To calculate the overall Home Office/Related Organization Contract 
Labor cost weight for the proposed 2021-based IPF market basket, we 
propose to weight together the freestanding Home Office/Related 
Organization Contract Labor cost weight (4.2 percent) and the hospital-
based Home Office Contract Labor/Related Organization cost weight (5.1 
percent) using total Medicare allowable costs from the sample of 
hospital-based IPFs that passed the one percent trim and the universe 
of freestanding IPFs. The resulting overall cost weight for Home 
Office/Related Organization Contract Labor is 4.7 percent (4.2 percent 
x 44 percent + 5.1 percent x 56 percent). This is the same methodology 
used to calculate the Home Office/Related Organization Contract Labor 
cost weight in the 2016-based IPF market basket.
    Finally, we propose to calculate the residual ``All Other'' cost 
weight that reflects all remaining costs that are not captured in the 
seven cost categories listed. See Table 1 for the resulting cost 
weights for these major cost categories that we obtain from the 
Medicare cost reports.

  Table 1--Major Cost Categories as Derived From Medicare Cost Reports
------------------------------------------------------------------------
                                          Proposed 2021-
                                             Based IPF    2016-Based IPF
          Major cost categories            market basket   market basket
                                             (percent)       (percent)
------------------------------------------------------------------------
Wages and Salaries......................            50.4            51.2
Employee Benefits.......................            13.7            13.5
Contract Labor..........................             2.8             1.3
Professional Liability Insurance                     1.0             0.9
 (Malpractice)..........................
Pharmaceuticals.........................             3.6             4.7
Home Office/Related Organization                     4.7             3.5
 Contract Labor.........................
Capital.................................             7.2             7.1
All Other...............................            16.7            17.9
------------------------------------------------------------------------

    As we did for the 2016-based IPF market basket, we propose to 
allocate the Contract Labor cost weight to the Wages and Salaries and 
Employee Benefits cost weights based on their relative proportions 
under the assumption that contract labor costs are comprised of both 
wages and salaries, and employee benefits. The Contract Labor 
allocation proportion for Wages and Salaries is equal to the Wages and 
Salaries cost weight as a percent of the sum of the Wages and Salaries 
cost weight and the Employee Benefits cost weight. For this proposed 
rule, this rounded percentage is 79 percent; therefore, we propose to 
allocate 79 percent of the Contract Labor cost weight to the Wages and 
Salaries cost weight and 21 percent to the Employee Benefits cost 
weight. This allocation was 81/19 in the 2016-based IPF market basket 
(84 FR 38430). Table 2 shows the Wages and Salaries and Employee 
Benefit cost weights after Contract Labor cost weight allocation for 
both the proposed 2021-based IPF market basket and 2016-based IPF 
market basket.

[[Page 21246]]



  Table 2--Wages and Salaries and Employee Benefits Cost Weights After
                        Contract Labor Allocation
------------------------------------------------------------------------
                                          Proposed 2021-
          Major cost categories              Based IPF    2016-Based IPF
                                           market basket   market basket
------------------------------------------------------------------------
Wages and Salaries......................            52.6            52.2
Employee Benefits.......................            14.3            13.8
------------------------------------------------------------------------

(3) Derivation of the Detailed Operating Cost Weights
    To further divide the ``All Other'' residual cost weight estimated 
from the 2021 Medicare cost report data into more detailed cost 
categories, we propose to use the 2012 Benchmark Input-Output (I-O) 
``Use Tables/Before Redefinitions/Purchaser Value'' for North American 
Industry Classification System (NAICS) 622000, Hospitals, published by 
the Bureau of Economic Analysis (BEA). This data is publicly available 
at https://www.bea.gov/industry/io_annual.htmhttps://www.bea.gov/industry/io_annual.htm. For the 2016-based IPF market basket, we also 
used the 2012 Benchmark I-O data, the most recent data available at the 
time (84 FR 38431).
    The BEA Benchmark I-O data are scheduled for publication every 5 
years with the most recent data available for 2012. The 2012 Benchmark 
I-O data are derived from the 2012 Economic Census and are the building 
blocks for BEA's economic accounts. Thus, they represent the most 
comprehensive and complete set of data on the economic processes or 
mechanisms by which output is produced and distributed.\1\ BEA also 
produces Annual I-O estimates; however, while based on a similar 
methodology, these estimates reflect less comprehensive and less 
detailed data sources and are subject to revision when benchmark data 
becomes available. Instead of using the less detailed Annual I-O data, 
we propose to inflate the 2012 Benchmark I-O data forward to 2021 by 
applying the annual price changes from the respective price proxies to 
the appropriate market basket cost categories that are obtained from 
the 2012 Benchmark I-O data. We repeat this practice for each year. We 
then propose to calculate the cost shares that each cost category 
represents of the inflated 2012 data. These resulting 2021 cost shares 
are applied to the All Other residual cost weight to obtain the 
detailed cost weights for the proposed 2021-based IPF market basket. 
For example, the cost for Food: Direct Purchases represents 5.0 percent 
of the sum of the ``All Other'' 2012 Benchmark I-O Hospital 
Expenditures inflated to 2021; therefore, the Food: Direct Purchases 
cost weight represents 5.0 percent of the proposed 2021-based IPF 
market basket's ``All Other'' cost category (16.7 percent), yielding a 
``final'' Food: Direct Purchases cost weight of 0.8 percent in the 
proposed 2021-based IPF market basket (0.05 * 16.7 percent = 0.8 
percent).
---------------------------------------------------------------------------

    \1\ https://www.bea.gov/papers/pdf/IOmanual_092906.pdf.
---------------------------------------------------------------------------

    Using this methodology, we propose to derive seventeen detailed IPF 
market basket cost category weights from the proposed 2021-based IPF 
market basket residual cost weight (16.7 percent). These categories 
are: (1) Electricity and Other Non-Fuel Utilities; (2) Fuel: Oil and 
Gas; (3) Food: Direct Purchases; (4) Food: Contract Services; (5) 
Chemicals; (6) Medical Instruments; (7) Rubber and Plastics; (8) Paper 
and Printing Products; (9) Miscellaneous Products; (10) Professional 
Fees: Labor-related; (11) Administrative and Facilities Support 
Services; (12) Installation, Maintenance, and Repair Services; (13) All 
Other Labor-related Services; (14) Professional Fees: Nonlabor-related; 
(15) Financial Services; (16) Telephone Services; and (17) All Other 
Nonlabor-related Services.
(4) Derivation of the Detailed Capital Cost Weights
    As described in section III.A.3.a.(2) of this proposed rule, we 
propose a Capital-Related cost weight of 7.2 percent as obtained from 
the 2021 Medicare cost reports for freestanding and hospital-based IPF 
providers. We propose to then separate this total Capital-Related cost 
weight into more detailed cost categories.
    Using 2021 Medicare cost reports, we are able to group Capital-
Related costs into the following categories: Depreciation, Interest, 
Lease, and Other Capital-Related costs. For each of these categories, 
we propose to determine separately for hospital-based IPFs and 
freestanding IPFs what proportion of total capital-related costs the 
category represents.
    For freestanding IPFs, using Medicare Cost Report data on Worksheet 
A-7 part III, we propose to derive the proportions for Depreciation 
(column 9), Interest (column 11), Lease (column 10), and Other Capital-
related costs (column 12 through 14), which is similar to the 
methodology used for the 2016-based IPF market basket.
    For hospital-based IPFs, data for these four categories are not 
reported separately for the hospital-based IPF; therefore, we propose 
to derive these proportions using data reported on Worksheet A-7 for 
the total facility. We are assuming the cost shares for the overall 
hospital are representative for the hospital-based IPF unit. For 
example, if depreciation costs make up 60 percent of total capital 
costs for the entire facility, we believe it is reasonable to assume 
that the hospital-based IPF would also have a 60 percent proportion 
because it is a unit contained within the total facility. This is the 
same methodology used for the 2016-based IPF market basket (84 FR 
38431).
    To combine each detailed capital cost weight for freestanding and 
hospital-based IPFs into a single capital cost weight for the proposed 
2021-based IPF market basket, we propose to weight together the shares 
for each of the categories (Depreciation, Interest, Lease, and Other 
Capital-related costs) based on the share of total capital costs each 
provider type represents of the total capital costs for all IPFs for 
2021. Applying this methodology results in proportions of total 
capital-related costs for Depreciation, Interest, Lease and Other 
Capital-related costs that are representative of the universe of IPF 
providers. This is the same methodology used for the 2016-based IPF 
market basket (84 FR 38432).
    Lease costs are unique in that they are not broken out as a 
separate cost category in the proposed 2021-based IPF market basket. 
Rather, we propose to proportionally distribute these costs among the 
cost categories of Depreciation, Interest, and Other Capital-Related 
costs, reflecting the assumption that the underlying cost structure of 
leases is similar to that of capital-related costs in general. As was 
done under the 2016-based IPF market basket, we propose to assume that 
10 percent of the lease costs as a proportion of total capital-related 
costs represents overhead and assign those costs to the

[[Page 21247]]

Other Capital-Related cost category accordingly. We propose to 
distribute the remaining lease costs proportionally across the three 
cost categories (Depreciation, Interest, and Other Capital-Related) 
based on the proportion that these categories comprise of the sum of 
the Depreciation, Interest, and Other Capital-related cost categories 
(excluding lease expenses). This would result in three primary capital-
related cost categories in the proposed 2021-based IPF market basket: 
Depreciation, Interest, and Other Capital-Related costs. This is the 
same methodology used for the 2016-based IPF market basket (84 FR 
38432). The allocation of these lease expenses is shown in Table 3.
    Finally, we propose to further divide the Depreciation and Interest 
cost categories. We propose to separate Depreciation into the following 
two categories: (1) Building and Fixed Equipment; and (2) Movable 
Equipment. We propose to separate Interest into the following two 
categories: (1) Government/Nonprofit; and (2) For-profit.
    To disaggregate the Depreciation cost weight, we need to determine 
the percent of total Depreciation costs for IPFs that is attributable 
to Building and Fixed Equipment, which we hereafter refer to as the 
``fixed percentage.'' For the proposed 2021-based IPF market basket, we 
propose to use slightly different methods to obtain the fixed 
percentages for hospital-based IPFs compared to freestanding IPFs.
    For freestanding IPFs, we propose to use depreciation data from 
Worksheet A-7 of the 2021 Medicare cost reports. However, for hospital-
based IPFs, we determined that the fixed percentage for the entire 
facility may not be representative of the hospital-based IPF unit due 
to the entire facility likely employing more sophisticated movable 
assets that are not utilized by the hospital-based IPF. Therefore, for 
hospital-based IPFs, we propose to calculate a fixed percentage using: 
(1) building and fixture capital costs allocated to the hospital-based 
IPF unit as reported on Worksheet B, part I, column 1, line 40; and (2) 
building and fixture capital costs for the top five ancillary cost 
centers utilized by hospital-based IPFs accounting for 82 percent of 
hospital-based IPF ancillary total costs: Clinic (Worksheet B, part I, 
column 1, line 90), Drugs Charged to Patients (Worksheet B, part I, 
column 1, line 73), Emergency (Worksheet B, part I, column 1, line 91), 
Laboratory (Worksheet B, part I, column 1, line 60) and Radiology--
Diagnostic (Worksheet B, part I, column 1, line 54). We propose to 
weight these two fixed percentages (inpatient and ancillary) using the 
proportion that each capital cost type represents of total capital 
costs in the proposed 2021-based IPF market basket. We propose to then 
weight the fixed percentages for hospital-based and freestanding IPFs 
together using the proportion of total capital costs each provider type 
represents. For both freestanding and hospital-based IPFs, this is the 
same methodology used for the 2016-based IPF market basket (84 FR 
38432).
    To disaggregate the Interest cost weight, we determined the percent 
of total interest costs for IPFs that are attributable to government 
and nonprofit facilities, which is hereafter referred to as the 
``nonprofit percentage,'' as price pressures associated with these 
types of interest costs tend to differ from those for for-profit 
facilities. For the 2021-based IPF market basket, we propose to use 
interest costs data from Worksheet A-7 of the 2021 Medicare cost 
reports for both freestanding and hospital-based IPFs. We propose to 
determine the percent of total interest costs that are attributed to 
government and nonprofit IPFs separately for hospital-based and 
freestanding IPFs. We then propose to weight the nonprofit percentages 
for hospital-based and freestanding IPFs together using the proportion 
of total capital costs that each provider type represents.
    Table 3 provides the proposed detailed capital cost share 
composition estimated from the 2021 IPF Medicare cost reports. These 
detailed capital cost share composition percentages are applied to the 
total Capital-Related cost weight of 7.2 percent explained in detail in 
sections III.A.3.a.(1)(h) and III.A.3.a.(2) of this proposed rule.

 Table 3--Capital Cost Share Composition for the Proposed 2021-Based IPF
                              Market Basket
------------------------------------------------------------------------
                                           Capital cost    Capital cost
                                               share           share
                                            composition     composition
                                           before lease     after lease
                                              expense         expense
                                            allocation      allocation
                                             (percent)       (percent)
------------------------------------------------------------------------
Depreciation............................              55              68
    Building and Fixed Equipment........              40              48
    Movable Equipment...................              16              19
Interest................................              17              21
    Government/Nonprofit................              11              13
    For Profit..........................               6               7
Lease...................................              20  ..............
Other Capital-related costs.............               8              12
------------------------------------------------------------------------
* Detail may not add to total due to rounding.

(5) Proposed 2021-Based IPF Market Basket Cost Categories and Weights
    Table 4 compares the cost categories and weights for the proposed 
2021-based IPF market basket compared to the 2016-based IPF market 
basket.

[[Page 21248]]



 Table 4--Proposed 2021-Based IPF Market Basket Cost Weights Compared to
                2016-Based IPF Market Basket Cost Weights
------------------------------------------------------------------------
                                          Proposed 2021-
                                             based IPF    2016-based IPF
              Cost category                market basket   market basket
                                            cost weight     cost weight
------------------------------------------------------------------------
Total...................................           100.0           100.0
  Compensation..........................            66.9            66.0
        Wages and Salaries..............            52.6            52.2
        Employee Benefits...............            14.3            13.8
  Utilities.............................             1.2             1.1
        Electricity and Other Non-Fuel               0.7             0.8
         Utilities......................
        Fuel: Oil and Gas...............             0.4             0.3
  Professional Liability Insurance......             1.0             0.9
  All Other Products and Services.......            23.8            24.9
    All Other Products..................             9.1            10.7
        Pharmaceuticals.................             3.6             4.7
        Food: Direct Purchases..........             0.8             0.9
        Food: Contract Services.........             1.0             1.0
        Chemicals.......................             0.3             0.3
        Medical Instruments.............             2.0             2.3
        Rubber and Plastics.............             0.3             0.3
        Paper and Printing Products.....             0.5             0.5
        Miscellaneous Products..........             0.6             0.7
    All Other Services..................            14.7            14.2
      Labor-Related Services............             7.9             7.7
        Professional Fees: Labor-related             4.7             4.4
        Administrative and Facilities                0.6             0.6
         Support Services...............
        Installation, Maintenance, and               1.2             1.3
         Repair Services................
        All Other: Labor-related                     1.4             1.4
         Services.......................
      Nonlabor-Related Services.........             6.8             6.5
        Professional Fees: Nonlabor-                 4.9             4.5
         related........................
        Financial Services..............             0.7             0.8
        Telephone Services..............             0.2             0.3
        All Other: Nonlabor-related                  0.9             1.0
         Services.......................
  Capital-Related Costs.................             7.2             7.1
    Depreciation........................             4.9             5.3
        Building and Fixed Equipment....             3.5             3.7
        Movable Equipment...............             1.4             1.5
    Interest Costs......................             1.5             1.2
        Government/Nonprofit............             1.0             0.9
        For Profit......................             0.5             0.3
    Other Capital-Related Costs.........             0.8             0.7
------------------------------------------------------------------------
* Detail may not add to total due to rounding.

b. Selection of Price Proxies
    After developing the cost weights for the proposed 2021-based IPF 
market basket, we select the most appropriate wage and price proxies 
currently available to represent the rate of price change for each 
expenditure category. For the majority of the cost weights, we base the 
price proxies on Bureau of Labor Statistics (BLS) data and grouped them 
into one of the following BLS categories:
     Employment Cost Indexes (ECIs): measure the rate of change 
in employment wage rates and employer costs for employee benefits per 
hour worked. These indexes are fixed-weight indexes and strictly 
measure the change in wage rates and employee benefits per hour. ECIs 
are superior to Average Hourly Earnings (AHE) as price proxies for 
input price indexes because they are not affected by shifts in 
occupation or industry mix, and because they measure pure price change 
and are available by both occupational group and by industry. The 
industry ECIs are based on the NAICS and the occupational ECIs are 
based on the Standard Occupational Classification System (SOC).
     Producer Price Indexes (PPI): measure the average change 
over time in the selling prices received by domestic producers for 
their output. The prices included in the PPI are from the first 
commercial transaction for many products and some services (https://www.bls.gov/ppi/).
     Consumer Price Indexes (CPIs): measure the average change 
over time in the prices paid by urban consumers for a market basket of 
consumer goods and services (https://www.bls.gov/cpi/). CPIs are only 
used when the purchases are similar to those of retail consumers rather 
than purchases at the wholesale level, or if no appropriate PPIs are 
available.
    We evaluated the price proxies using the criteria of reliability, 
timeliness, availability, and relevance:
     Reliability: indicates that the index is based on valid 
statistical methods and has low sampling variability. Widely accepted 
statistical methods ensure that the data were collected and aggregated 
in a way that can be replicated. Low sampling variability is desirable 
because it indicates that the sample reflects the typical members of 
the population. (Sampling variability is variation that occurs by 
chance because only a sample was surveyed rather than the entire 
population.)
     Timeliness: implies that the proxy is published regularly, 
preferably at least once a quarter. The market baskets are updated 
quarterly and, therefore, it is important for the underlying price 
proxies to be up-to-date, reflecting the

[[Page 21249]]

most recent data available. We believe that using proxies that are 
published regularly (at least quarterly, whenever possible) helps to 
ensure that we are using the most recent data available to update the 
market basket. We strive to use publications that are disseminated 
frequently, because we believe that this is an optimal way to stay 
abreast of the most current data available.
     Availability: means that the proxy is publicly available. 
We prefer that our proxies are publicly available because this will 
help ensure that our market basket updates are as transparent to the 
public as possible. In addition, this enables the public to be able to 
obtain the price proxy data on a regular basis.
     Relevance: means that the proxy is applicable and 
representative of the cost category weight to which it is applied. The 
CPIs, PPIs, and ECIs that we selected to propose in this regulation 
meet these criteria. Therefore, we believe that they continue to be the 
best measure of price changes for the cost categories to which they 
would be applied.
    Table 13 lists all price proxies that we propose to use for the 
2021-based IPF market basket. A detailed explanation of the price 
proxies we propose for each cost category weight is provided below.
(1) Price Proxies for the Operating Portion of the Proposed 2021-Based 
IPF Market Basket
(a) Wages and Salaries
    There is not a published wage proxy that we believe represents the 
occupational distribution of workers in IPFs. To measure wage price 
growth in the proposed 2021-based IPF market basket, we propose to 
apply a proxy blend based on six occupational subcategories within the 
Wages and Salaries category, which would reflect the IPF occupational 
mix, as was done for the 2016-based IPF market basket.
    We propose to use the National Industry-Specific Occupational 
Employment and Wage estimates for NAICS 622200, Psychiatric & Substance 
Abuse Hospitals, published by the BLS Occupational Employment and Wage 
Statistics (OEWS) program, as the data source for the wage cost shares 
in the wage proxy blend. We note that in the spring of 2021, the 
Occupational Employment Statistics (OES) program began using the name 
Occupational Employment and Wage Statistics (OEWS) to better reflect 
the range of data available from the program. Data released on or after 
March 31, 2021 reflect the new program name. We propose to use May 2021 
OEWS data. Detailed information on the methodology for the national 
industry-specific occupational employment and wage estimates survey can 
be found at https://www.bls.gov/oes/current/oes_tec.htm. For the 2016-
based IPF market basket, we used May 2016 OES data.
    Based on the OEWS data, there are six wage subcategories: 
Management; NonHealth Professional and Technical; Health Professional 
and Technical; Health Service; NonHealth Service; and Clerical. Table 5 
lists the 2021 occupational assignments for the six wage subcategories; 
these are the same occupational groups used in the 2016-based IPF 
market basket.

        Table 5--2021 Occupational Assignments for IPF Wage Blend
                      [2021 Occupational Groupings]
------------------------------------------------------------------------
         Group 1                             Management
------------------------------------------------------------------------
11-0000..................  Management Occupations.
------------------------------------------------------------------------
         Group 2                 NonHealth Professional & Technical
------------------------------------------------------------------------
13-0000..................  Business and Financial Operations
                            Occupations.
15-0000..................  Computer and Mathematical Occupations.
19-0000..................  Life, Physical, and Social Science
                            Occupations.
23-0000..................  Legal Occupations.
25-0000..................  Educational Instruction and Library
                            Occupations.
27-0000..................  Arts, Design, Entertainment, Sports, and
                            Media Occupations.
------------------------------------------------------------------------
         Group 3                  Health Professional & Technical
------------------------------------------------------------------------
29-1021..................  Dentists, General.
29-1031..................  Dietitians and Nutritionists.
29-1051..................  Pharmacists.
29-1071..................  Physician Assistants.
29-1122..................  Occupational Therapists.
29-1123..................  Physical Therapists.
29-1125..................  Recreational Therapists.
29-1126..................  Respiratory Therapists.
29-1127..................  Speech-Language Pathologists.
29-1129..................  Therapists, All Other.
29-1141..................  Registered Nurses.
29-1171..................  Nurse Practitioners.
29-1215..................  Family Medicine Physicians.
29-1216..................  General Internal Medicine Physicians.
29-1223..................  Psychiatrists.
29-1229..................  Physicians, All Other.
29-1292..................  Dental Hygienists.
29-1299..................  Healthcare Diagnosing or Treating
                            Practitioners, All Other.
------------------------------------------------------------------------
         Group 4                           Health Service
------------------------------------------------------------------------
21-0000..................  Community and Social Service Occupations.
29-2010..................  Clinical Laboratory Technologists and
                            Technicians.
29-2034..................  Radiologic Technologists and Technicians.
29-2042..................  Emergency Medical Technicians.
29-2051..................  Dietetic Technicians.

[[Page 21250]]

 
29-2052..................  Pharmacy Technicians.
29-2053..................  Psychiatric Technicians.
29-2061..................  Licensed Practical and Licensed Vocational
                            Nurses.
29-2072..................  Medical Records Specialists.
29-2099..................  Health Technologists and Technicians, All
                            Other.
29-9021..................  Health Information Technologists and Medical
                            Registrars.
29-9099..................  Healthcare Practitioners and Technical
                            Workers, All Other.
31-0000..................  Healthcare Support Occupations.
------------------------------------------------------------------------
         Group 5                         NonHealth Service
------------------------------------------------------------------------
33-0000..................  Protective Service Occupations.
35-0000..................  Food Preparation and Serving Related
                            Occupations.
37-0000..................  Building and Grounds Cleaning and Maintenance
                            Occupations.
39-0000..................  Personal Care and Service Occupations.
41-0000..................  Sales and Related Occupations.
47-0000..................  Construction and Extraction Occupations.
49-0000..................  Installation, Maintenance, and Repair
                            Occupations.
51-0000..................  Production Occupations.
53-0000..................  Transportation and Material Moving
                            Occupations.
------------------------------------------------------------------------
         Group 6                              Clerical
------------------------------------------------------------------------
43-0000..................  Office and Administrative Support
                            Occupations.
------------------------------------------------------------------------

    Total expenditures by occupation (that is, occupational assignment) 
were calculated by taking the OEWS number of employees multiplied by 
the OEWS annual average salary. These expenditures were aggregated 
based on the six groups in Table 5. We next calculated the proportion 
of each group's expenditures relative to the total expenditures of all 
six groups. These proportions, listed in Table 6, represent the weights 
used in the wage proxy blend. We then propose to use the published wage 
proxies in Table 6 for each of the six groups (that is, wage 
subcategories) as we believe these six price proxies are the most 
technically appropriate indices available to measure the price growth 
of the Wages and Salaries cost category. These are the same price 
proxies used in the 2016-based IPF market basket (84 FR 38437).

                                             Table 6--Proposed 2021-Based IPF Market Basket Wage Proxy Blend
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                           Proposed 2021-    2016-based
                                             based wage      wage blend
             Wage subcategory               blend weights      weights                Price proxy                            BLS Series ID
                                              (percent)       (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Healthcare Professional and Technical....            36.9            34.9  ECI for Wages and Salaries for     CIU1026220000000I.
                                                                            All Civilian workers in
                                                                            Hospitals.
Healthcare Service.......................            34.4            36.3  ECI for Wages and Salaries for     CIU1026200000000I.
                                                                            All Civilian workers in
                                                                            Healthcare and Social Assistance.
NonHealthcare Service....................             7.5             8.9  ECI for Wages and Salaries for     CIU2020000300000I.
                                                                            Private Industry workers in
                                                                            Service Occupations.
NonHealthcare Professional and Technical.             7.3             7.0  ECI for Wages and Salaries for     CIU2025400000000I.
                                                                            Private Industry workers in
                                                                            Professional, Scientific, and
                                                                            Technical Services.
Management...............................             7.8             6.8  ECI for Wages and Salaries for     CIU2020000110000I.
                                                                            Private industry workers in
                                                                            Management, Business, and
                                                                            Financial.
Administrative Support and Clerical......             6.1             6.1  ECI for Wages and Salaries for     CIU2020000220000I.
                                                                            Private Industry workers in
                                                                            Office and Administrative
                                                                            Support.
                                          --------------------------------
    Total................................           100.0           100.0
--------------------------------------------------------------------------------------------------------------------------------------------------------

    A comparison of the yearly changes from FY 2021 to FY 2024 for the 
proposed 2021-based IPF wage blend and the 2016-based IPF wage blend is 
shown in Table 7. The average annual growth rate is the same for both 
price proxies over 2021-2024.

[[Page 21251]]



 Table 7--Fiscal Year Growth in the Proposed 2021-Based IPF Wage Proxy Blend and 2016-Based IPF Wage Proxy Blend
----------------------------------------------------------------------------------------------------------------
                                                                                                        Average
                                                              2021       2022       2023       2024    2021-2024
----------------------------------------------------------------------------------------------------------------
Proposed 2021-based IPF Wage Proxy Blend.................        3.0        5.6        5.1        3.7        4.4
2016-based IPF Wage Proxy Blend..........................        3.1        5.6        5.2        3.7        4.4
----------------------------------------------------------------------------------------------------------------
** Source: IHS Global Inc., 4th Quarter 2022 forecast with historical data through 3rd Quarter 2022.

(b) Employee Benefits
    To measure benefits price growth in the proposed 2021-based IPF 
market basket, we propose to apply a benefits proxy blend based on the 
same six subcategories and the same six blend weights for the wage 
proxy blend. These subcategories and blend weights are listed in Table 
8.
    The benefit ECIs, listed in Table 8, are not publicly available. 
Therefore, an ``ECIs for Total Benefits'' is calculated using publicly 
available ``ECIs for Total Compensation'' for each subcategory and the 
relative importance of wages within that subcategory's total 
compensation. This is the same benefits ECI methodology that we 
implemented in our 2016-based IPF market basket as well as used in the 
IPPS, SNF, Home Health Agency (HHA), IRF, LTCH, and End-Stage Renal 
Disease (ESRD) market baskets. We believe that the six price proxies 
listed in Table 8 are the most technically appropriate indices to 
measure the price growth of the Employee Benefits cost category in the 
proposed 2021-based HHA IPF market basket.

   Table 8--Proposed 2021-Based IPF Market Basket Benefits Proxy Blend and 2016-Based IPF Benefit Proxy Blend
----------------------------------------------------------------------------------------------------------------
                                             Proposed 2021-    2016-based
                                              based benefit   benefit blend
              Wage subcategory                blend weight       weight                  Price proxy
                                                (percent)       (percent)
----------------------------------------------------------------------------------------------------------------
Healthcare Professional and Technical......            36.9            34.9  ECI for Total Benefits for All
                                                                              Civilian workers in Hospitals.
Healthcare Service.........................            34.4            36.3  ECI for Total Benefits for All
                                                                              Civilian workers in Healthcare and
                                                                              Social Assistance.
NonHealthcare Service......................             7.5             8.9  ECI for Total Benefits for Private
                                                                              Industry workers in Service
                                                                              Occupations.
NonHealthcare Professional and Technical...             7.3             7.0  ECI for Total Benefits for Private
                                                                              Industry workers in Professional,
                                                                              Scientific, and Technical
                                                                              Services.
Management.................................             7.8             6.8  ECI for Total Benefits for Private
                                                                              industry workers in Management,
                                                                              Business, and Financial.
Administrative Support and Clerical........             6.1             6.1  ECI for Total Benefits for Private
                                                                              Industry workers in Office and
                                                                              Administrative Support.
                                            --------------------------------
    Total..................................           100.0           100.0  ...................................
----------------------------------------------------------------------------------------------------------------

    A comparison of the yearly changes from FY 2021 to FY 2024 for the 
proposed 2021-based IPF benefit proxy blend and the 2016-based IPF 
benefit proxy is shown in Table 9. The average annual growth rate is 
the same for both price proxies over 2021 through 2024.

 Table 9--Fiscal Year Growth in the Proposed 2021-Based IPF Benefit Proxy Blend and 2016-Based IPF Benefit Proxy
                                                      Blend
----------------------------------------------------------------------------------------------------------------
                                                                                                        Average
                                                              2021       2022       2023       2024    2021-2024
----------------------------------------------------------------------------------------------------------------
Proposed 2021-based IPF Benefit Proxy Blend..............        2.4        4.4        4.4        3.6        3.7
2016-based IPF Benefit Proxy Blend.......................        2.4        4.4        4.4        3.6        3.7
----------------------------------------------------------------------------------------------------------------
Source: IHS Global Inc., 4th Quarter 2022 forecast with historical data through 3rd Quarter 2022.

(c) Electricity and Other Non-Fuel Utilities
    We propose to use the PPI Commodity Index for Commercial Electric 
Power (BLS series code WPU0542) to measure the price growth of this 
cost category (which we propose to rename from Electricity to 
Electricity and Other Non-Fuel Utilities). This is the same price proxy 
used in the 2016-based IPF market basket (84 FR 38438).
(d) Fuel: Oil and Gas
    Similar to the 2016-based IPF market basket, for the 2021-based IPF 
market basket, we propose to use a blend of the PPI for Petroleum 
Refineries and the PPI Commodity for Natural Gas. Our analysis of the 
Bureau of Economic Analysis' 2012 Benchmark Input-Output data (use 
table before redefinitions, purchaser's value for NAICS 622000

[[Page 21252]]

[Hospitals]), shows that Petroleum Refineries expenses account for 
approximately 90 percent and Natural Gas expenses account for 
approximately 10 percent of Hospitals' (NAICS 622000) total Fuel: Oil 
and Gas expenses. Therefore, we propose to use a blend of 90 percent of 
the PPI for Petroleum Refineries (BLS series code PCU324110324110) and 
10 percent of the PPI Commodity Index for Natural Gas (BLS series code 
WPU0531) as the price proxy for this cost category. This is the same 
blend that was used for the 2016-based IPF market basket (84 FR 38438).
(e) Professional Liability Insurance
    We propose to use the CMS Hospital Professional Liability Index to 
measure changes in PLI premiums. To generate this index, we collect 
commercial insurance premiums for a fixed level of coverage while 
holding non-price factors constant (such as a change in the level of 
coverage). This is the same proxy used in the 2016-based IPF market 
basket (84 FR 38438).
(f) Pharmaceuticals
    We propose to use the PPI for Pharmaceuticals for Human Use, 
Prescription (BLS series code WPUSI07003) to measure the price growth 
of this cost category. This is the same proxy used in the 2016-based 
IPF market basket (84 FR 38438).
(g) Food: Direct Purchases
    We propose to use the PPI for Processed Foods and Feeds (BLS series 
code WPU02) to measure the price growth of this cost category. This is 
the same proxy used in the 2016-based IPF market basket (84 FR 38438).
(h) Food: Contract Purchases
    We propose to use the CPI for Food Away From Home (BLS series code 
CUUR0000SEFV) to measure the price growth of this cost category. This 
is the same proxy used in the 2016-based IPF market basket (84 FR 
38438).
(i) Chemicals
    Similar to the 2016-based IPF market basket, we propose to use a 
four-part blended PPI as the proxy for the chemical cost category in 
the proposed 2021-based IPF market basket. The proposed blend is 
composed of the PPI for Industrial Gas Manufacturing, Primary Products 
(BLS series code PCU325120325120P), the PPI for Other Basic Inorganic 
Chemical Manufacturing (BLS series code PCU32518-32518-), the PPI for 
Other Basic Organic Chemical Manufacturing (BLS series code PCU32519-
32519-), and the PPI for Other Miscellaneous Chemical Product 
Manufacturing (BLS series code PCU325998325998). For the proposed 2021-
based IPF market basket, we propose to derive the weights for the PPIs 
using the 2012 Benchmark I-O data.
    Table 10 shows the weights for each of the four PPIs used to create 
the proposed blended Chemical proxy for the proposed 2021-based IPF 
market basket. This is the same blend that was used for the 2016-based 
IPF market basket (84 FR 38439).

                 Table 10--Blended Chemical PPI Weights
------------------------------------------------------------------------
                                          Proposed 2021-
                                             based IPF
                  Name                        weights          NAICS
                                             (percent)
------------------------------------------------------------------------
PPI for Industrial Gas Manufacturing....              19          325120
PPI for Other Basic Inorganic Chemical                13          325180
 Manufacturing..........................
PPI for Other Basic Organic Chemical                  60          325190
 Manufacturing..........................
PPI for Other Miscellaneous Chemical                   8          325998
 Product Manufacturing..................
------------------------------------------------------------------------

(j) Medical Instruments
    We propose to use a blended price proxy for the Medical Instruments 
category, as shown in Table 11. The 2012 Benchmark I-O data shows the 
majority of medical instruments and supply costs are for NAICS 339112--
Surgical and medical instrument manufacturing costs (approximately 56 
percent) and NAICS 339113--Surgical appliance and supplies 
manufacturing costs (approximately 43 percent). Therefore, we propose 
to use a blend of these two price proxies. To proxy the price changes 
associated with NAICS 339112, we propose to use the PPI for Surgical 
and medical instruments (BLS series code WPU1562). This is the same 
price proxy we used in the 2016-based IPF market basket. To proxy the 
price changes associated with NAICS 339113, we propose to use a 50/50 
blend of the PPI for Medical and surgical appliances and supplies (BLS 
series code WPU1563) and the PPI for Miscellaneous products, Personal 
safety equipment and clothing (BLS series code WPU1571). We propose to 
include the latter price proxy as it would reflect personal protective 
equipment including but not limited to face shields and protective 
clothing. The 2012 Benchmark I-O data does not provide specific 
expenses for these products; however, we recognize that this category 
reflects costs faced by IPFs.

            Table 11--Blended Medical Instruments PPI Weights
------------------------------------------------------------------------
                                          Proposed 2021-
                                             based IPF
                  Name                        weights          NAICS
                                             (percent)
------------------------------------------------------------------------
PPI--Commodity--Surgical and medical                  56          339112
 instruments............................
PPI--Commodity--Medical and surgical                  22  ..............
 appliances and supplies................
PPI--Commodity--Miscellaneous products-               22          339113
 Personal safety equipment and clothing.
------------------------------------------------------------------------

(k) Rubber and Plastics
    We propose to use the PPI for Rubber and Plastic Products (BLS 
series code WPU07) to measure price growth of this cost category. This 
is the same proxy used in the 2016-based IPF market basket (84 FR 
38439).

[[Page 21253]]

(l) Paper and Printing Products
    We propose to use the PPI for Converted Paper and Paperboard 
Products (BLS series code WPU0915) to measure the price growth of this 
cost category. This is the same proxy used in the 2016-based IPF market 
basket (84 FR 38439).
(m) Miscellaneous Products
    We propose to use the PPI for Finished Goods Less Food and Energy 
(BLS series code WPUFD4131) to measure the price growth of this cost 
category. This is the same proxy used in the 2016-based IPF market 
basket (84 FR 38439).
(n) Professional Fees: Labor-Related
    We propose to use the ECI for Total Compensation for Private 
Industry workers in Professional and Related (BLS series code 
CIU2010000120000I) to measure the price growth of this category. This 
is the same proxy used in the 2016-based IPF market basket (84 FR 
38439).
(o) Administrative and Facilities Support Services
    We propose to use the ECI for Total Compensation for Private 
Industry workers in Office and Administrative Support (BLS series code 
CIU2010000220000I) to measure the price growth of this category. This 
is the same proxy used in the 2016-based IPF market basket (84 FR 
38439).
(p) Installation, Maintenance, and Repair Services
    We propose to use the ECI for Total Compensation for Civilian 
workers in Installation, Maintenance, and Repair (BLS series code 
CIU1010000430000I) to measure the price growth of this cost category. 
This is the same proxy used in the 2016-based IPF market basket (84 FR 
38439).
(q) All Other: Labor-Related Services
    We propose to use the ECI for Total Compensation for Private 
Industry workers in Service Occupations (BLS series code 
CIU2010000300000I) to measure the price growth of this cost category. 
This is the same proxy used in the 2016-based IPF market basket (84 FR 
38439).
(r) Professional Fees: Nonlabor-Related
    We propose to use the ECI for Total Compensation for Private 
Industry workers in Professional and Related (BLS series code 
CIU2010000120000I) to measure the price growth of this category. This 
is the same proxy used in the 2016-based IPF market basket (84 FR 
38439).
(s) Financial Services
    We propose to use the ECI for Total Compensation for Private 
Industry workers in Financial Activities (BLS series code 
CIU201520A000000I) to measure the price growth of this cost category. 
This is the same proxy used in the 2016-based IPF market basket (84 FR 
38439).
(t) Telephone Services
    We propose to use the CPI for Telephone Services (BLS series code 
CUUR0000SEED) to measure the price growth of this cost category. This 
is the same proxy used in the 2016-based IPF market basket (84 FR 
38439).
(u) All Other: Nonlabor-Related Services
    We propose to use the CPI for All Items Less Food and Energy (BLS 
series code CUUR0000SA0L1E) to measure the price growth of this cost 
category. This is the same proxy used in the 2016-based IPF market 
basket (84 FR 38439).
(2) Price Proxies for the Capital Portion of the Proposed 2021-Based 
IPF Market Basket
(a) Capital Price Proxies Prior to Vintage Weighting
    We propose to use the same price proxies for the capital-related 
cost categories in the proposed 2021-based IPF market basket as were 
used in the 2016-based IPF market basket, which are provided in Table 
13 and described below. Specifically, we propose to proxy:
     Depreciation: Building and Fixed Equipment cost category 
by BEA's Chained Price Index for Nonresidential Construction for 
Hospitals and Special Care Facilities (BEA Table 5.4.4. Price Indexes 
for Private Fixed Investment in Structures by Type).
     Depreciation: Movable Equipment cost category by the PPI 
for Machinery and Equipment (BLS series code WPU11).
     Nonprofit Interest cost category by the average yield on 
domestic municipal bonds (Bond Buyer 20-bond index).
     For-profit Interest cost category by the iBoxx AAA 
Corporate Bond Yield index
     Other Capital-Related cost category by the CPI-U for Rent 
of Primary Residence (BLS series code CUUS0000SEHA).
    We believe these are the most appropriate proxies for IPF capital-
related costs that meet our selection criteria of relevance, 
timeliness, availability, and reliability. We also propose to vintage 
weight the capital price proxies for Depreciation and Interest to 
capture the long-term consumption of capital. This vintage weighting 
method is similar to the method used for the 2016-based IPF market 
basket (84 FR 38440) and is described below.
(b) Vintage Weights for Price Proxies
    Because capital is acquired and paid for over time, capital-related 
expenses in any given year are determined by both past and present 
purchases of physical and financial capital. The vintage-weighted 
capital-related portion of the proposed 2021-based IPF market basket is 
intended to capture the long-term consumption of capital, using vintage 
weights for depreciation (physical capital) and interest (financial 
capital). These vintage weights reflect the proportion of capital-
related purchases attributable to each year of the expected life of 
building and fixed equipment, movable equipment, and interest. We 
propose to use vintage weights to compute vintage-weighted price 
changes associated with depreciation and interest expenses.
    Capital-related costs are inherently complicated and are determined 
by complex capital-related purchasing decisions, over time, based on 
such factors as interest rates and debt financing. In addition, capital 
is depreciated over time instead of being consumed in the same period 
it is purchased. By accounting for the vintage nature of capital, we 
are able to provide an accurate and stable annual measure of price 
changes. Annual non-vintage price changes for capital are unstable due 
to the volatility of interest rate changes, and therefore, do not 
reflect the actual annual price changes for IPF capital-related costs. 
The capital-related component of the proposed 2021-based IPF market 
basket reflects the underlying stability of the capital-related 
acquisition process.
    The methodology used to calculate the vintage weights for the 
proposed 2021-based IPF market basket is the same as that used for the 
2016-based IPF market basket (84 FR 38439 through 38441) with the only 
difference being the inclusion of more recent data. To calculate the 
vintage weights for depreciation and interest expenses, we first need a 
time series of capital-related purchases for building and fixed 
equipment and movable equipment. We found no single source that 
provides an appropriate time series of capital-related purchases by 
hospitals for all of the above components of capital purchases. The 
early Medicare cost reports did not have sufficient capital-related 
data to meet this need. Data we obtained from the American Hospital 
Association (AHA) do not include annual capital-

[[Page 21254]]

related purchases. However, we are able to obtain data on total 
expenses back to 1963 from the AHA. Consequently, we propose to use 
data from the AHA Panel Survey and the AHA Annual Survey to obtain a 
time series of total expenses for hospitals. We then propose to use 
data from the AHA Panel Survey supplemented with the ratio of 
depreciation to total hospital expenses obtained from the Medicare cost 
reports to derive a trend of annual depreciation expenses for 1963 
through 2020, which is the latest year of AHA data available. We 
propose to separate these depreciation expenses into annual amounts of 
building and fixed equipment depreciation and movable equipment 
depreciation as determined earlier. From these annual depreciation 
amounts, we derive annual end-of-year book values for building and 
fixed equipment and movable equipment using the expected life for each 
type of asset category. While data is not available that is specific to 
IPFs, we believe this information for all hospitals serves as a 
reasonable alternative for the pattern of depreciation for IPFs.
    To continue to calculate the vintage weights for depreciation and 
interest expenses, we also need to account for the expected lives for 
Building and Fixed Equipment, Movable Equipment, and Interest for the 
proposed 2021-based IPF market basket. We propose to calculate the 
expected lives using Medicare cost report data from freestanding and 
hospital-based IPFs. The expected life of any asset can be determined 
by dividing the value of the asset (excluding fully depreciated assets) 
by its current year depreciation amount. This calculation yields the 
estimated expected life of an asset if the rates of depreciation were 
to continue at current year levels, assuming straight-line 
depreciation. We propose to determine the expected life of building and 
fixed equipment separately for hospital-based IPFs and freestanding 
IPFs, and then weight these expected lives using the percent of total 
capital costs each provider type represents. We propose to apply a 
similar method for movable equipment. Using these proposed methods, we 
determined the average expected life of building and fixed equipment to 
be equal to 25 years, and the average expected life of movable 
equipment to be equal to 12 years. For the expected life of interest, 
we believe vintage weights for interest should represent the average 
expected life of building and fixed equipment because, based on 
previous research described in the FY 1997 IPPS final rule (61 FR 
46198), the expected life of hospital debt instruments and the expected 
life of buildings and fixed equipment are similar. We note that for the 
2016-based IPF market basket, the expected life of building and fixed 
equipment is 22 years, and the expected life of movable equipment is 11 
years (84 FR 38441).
    Multiplying these expected lives by the annual depreciation amounts 
results in annual year-end asset costs for building and fixed equipment 
and movable equipment. We then calculate a time series, beginning in 
1964, of annual capital purchases by subtracting the previous year's 
asset costs from the current year's asset costs.
    For the building and fixed equipment and movable equipment vintage 
weights, we propose to use the real annual capital-related purchase 
amounts for each asset type to capture the actual amount of the 
physical acquisition, net of the effect of price inflation. These real 
annual capital-related purchase amounts are produced by deflating the 
nominal annual purchase amount by the associated price proxy as 
provided earlier in this proposed rule. For the interest vintage 
weights, we propose to use the total nominal annual capital-related 
purchase amounts to capture the value of the debt instrument 
(including, but not limited to, mortgages and bonds). Using these 
capital-related purchase time series specific to each asset type, we 
propose to calculate the vintage weights for building and fixed 
equipment, for movable equipment, and for interest.
    The vintage weights for each asset type are deemed to represent the 
average purchase pattern of the asset over its expected life (in the 
case of building and fixed equipment and interest, 25 years, and in the 
case of movable equipment, 12 years). For each asset type, we used the 
time series of annual capital-related purchase amounts available from 
2020 back to 1964. These data allow us to derive thirty-three 25-year 
periods of capital-related purchases for building and fixed equipment 
and interest, and forty-six 12-year periods of capital-related 
purchases for movable equipment. For each 25-year period for building 
and fixed equipment and interest, or 12-year period for movable 
equipment, we calculate annual vintage weights by dividing the capital-
related purchase amount in any given year by the total amount of 
purchases over the entire 25-year or 12-year period. This calculation 
is done for each year in the 25-year or 12-year period and for each of 
the periods for which we have data. We then calculate the average 
vintage weight for a given year of the expected life by taking the 
average of these vintage weights across the multiple periods of data. 
The vintage weights for the capital-related portion of the proposed 
2021-based IPF market basket and the 2016-based IPF market basket are 
presented in Table 12.

           Table 12--Proposed 2021-Based IPF Market Basket and 2016-Based IPF Market Basket Vintage Weights for Capital-Related Price Proxies
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Building and fixed equipment          Movable equipment                   Interest
                                                         -----------------------------------------------------------------------------------------------
                         Year *                            2021-based 25   2016-based 22   2021-based 12   2016-based 11   2021-based 25   2016-based 22
                                                               years           years           years           years           years           years
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.......................................................           0.031           0.035           0.066           0.071           0.018           0.021
2.......................................................           0.032           0.036           0.068           0.075           0.019           0.023
3.......................................................           0.033           0.038           0.071           0.080           0.021           0.025
4.......................................................           0.034           0.038           0.076           0.085           0.023           0.026
5.......................................................           0.035           0.040           0.080           0.087           0.024           0.029
6.......................................................           0.036           0.042           0.082           0.091           0.026           0.031
7.......................................................           0.035           0.042           0.084           0.095           0.026           0.033
8.......................................................           0.036           0.041           0.088           0.099           0.028           0.033
9.......................................................           0.036           0.042           0.091           0.102           0.029           0.036
10......................................................           0.039           0.043           0.094           0.105           0.033           0.038
11......................................................           0.040           0.046           0.098           0.110           0.035           0.042
12......................................................           0.040           0.047           0.101  ..............           0.037           0.045
13......................................................           0.042           0.048  ..............  ..............           0.040           0.048
14......................................................           0.042           0.049  ..............  ..............           0.042           0.052

[[Page 21255]]

 
15......................................................           0.042           0.050  ..............  ..............           0.044           0.055
16......................................................           0.043           0.050  ..............  ..............           0.046           0.057
17......................................................           0.044           0.051  ..............  ..............           0.049           0.060
18......................................................           0.045           0.053  ..............  ..............           0.052           0.065
19......................................................           0.045           0.053  ..............  ..............           0.054           0.068
20......................................................           0.045           0.053  ..............  ..............           0.055           0.069
21......................................................           0.045           0.052  ..............  ..............           0.057           0.070
22......................................................           0.045           0.052  ..............  ..............           0.058           0.072
23......................................................           0.045  ..............  ..............  ..............           0.060  ..............
24......................................................           0.045  ..............  ..............  ..............           0.061  ..............
25......................................................           0.044  ..............  ..............  ..............           0.062  ..............
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................           1.000           1.000           1.000           1.000           1.000           1.000
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Numbers may not add to total due to rounding.
* Year 25 is applied to the most recent data point when creating the vintage-weighted price proxies.

    The process of creating vintage-weighted price proxies requires 
applying the vintage weights to the price proxy index where the last 
applied vintage weight in Table 12 is applied to the most recent data 
point. We have provided on the CMS website an example of how the 
vintage weighting price proxies are calculated, using example vintage 
weights and example price indices. The example can be found at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MedicareProgramRatesStats/MarketBasketResearch.html in the zip 
file titled ``Weight Calculations as described in the IPPS FY 2010 
Proposed Rule.''
(3) Summary of Price Proxies of the Proposed 2021-Based IPF Market 
Basket
    Table 13 shows both the operating and capital price proxies for the 
proposed 2021-based IPF market basket.

                      Table 13--Price Proxies for the Proposed 2021-based IPF Market Basket
----------------------------------------------------------------------------------------------------------------
             Cost description                                  Price proxies                          Weight
----------------------------------------------------------------------------------------------------------------
Total....................................  .....................................................           100.0
Compensation.............................  .....................................................            66.9
    Wages and Salaries...................  Blended Wages and Salaries Price Proxy...............            52.6
    Employee Benefits....................  Blended Employee Benefits Price Proxy................            14.3
Utilities................................  .....................................................             1.2
    Electricity and Other Non-Fuel         PPI for Commercial Electric Power....................             0.7
     Utilities.
    Fuel: Oil and Gas....................  Blend of PPIs *......................................             0.4
Professional Liability Insurance.........  .....................................................             1.0
    Malpractice..........................  CMS Hospital Professional Liability Insurance Premium             1.0
                                            Index.
All Other Products and Services..........  .....................................................            23.8
All Other Products.......................  .....................................................             9.1
    Pharmaceuticals......................  PPI for Pharmaceuticals for Human Use, Prescription..             3.6
    Food: Direct Purchases...............  PPI for Processed Foods and Feeds....................             0.8
    Food: Contract Services..............  CPI-U for Food Away From Home........................             1.0
    Chemicals............................  Blend of PPIs*.......................................             0.3
    Medical Instruments..................  Blend of PPIs*.......................................             2.0
    Rubber and Plastics..................  PPI for Rubber and Plastic Products..................             0.3
    Paper and Printing Products..........  PPI for Converted Paper and Paperboard Products......             0.5
    Miscellaneous Products...............  PPI for Finished Goods Less Food and Energy..........             0.6
All Other Services.......................  .....................................................            14.7
Labor-Related Services...................  .....................................................             7.9
    Professional Fees: Labor-related.....  ECI for Total compensation for Private industry                   4.7
                                            workers in Professional and related.
    Administrative and Facilities Support  ECI for Total compensation for Private industry                   0.6
     Services.                              workers in Office and administrative support.
    Installation, Maintenance & Repair     ECI for Total compensation for Civilian workers in                1.2
     Services.                              Installation, maintenance, and repair.
    All Other: Labor-related Services....  ECI for Total compensation for Private industry                   1.4
                                            workers in Service occupations.
Nonlabor-Related Services................  .....................................................             6.8
    Professional Fees: Nonlabor-related..  ECI for Total compensation for Private industry                   4.9
                                            workers in Professional and related.
    Financial Services...................  ECI for Total compensation for Private industry                   0.7
                                            workers in Financial activities.
    Telephone Services...................  CPI-U for Telephone Services.........................             0.2
    All Other: Nonlabor-related Services.  CPI-U for All Items Less Food and Energy.............             0.9
Capital-Related Costs....................  .....................................................             7.2
Depreciation.............................  .....................................................             4.9

[[Page 21256]]

 
    Building and Fixed Equipment.........  BEA chained price index for nonresidential                        3.5
                                            construction for hospitals and special care
                                            facilities--vintage weighted (25 years).
    Movable Equipment....................  PPI for machinery and equipment--vintage weighted (12             1.4
                                            years).
Interest Costs...........................  .....................................................             1.5
    Government/Nonprofit.................  Average yield on domestic municipal bonds (Bond Buyer             1.0
                                            20 bonds)--vintage weighted (25 years).
    For Profit...........................  Average Yield on iBoxx AAA Corporate Bonds--vintage               0.5
                                            weighted (25 years).
Other Capital-Related Costs..............  CPI-U for Rent of primary residence..................             0.8
----------------------------------------------------------------------------------------------------------------
Note: Totals may not sum to 100.0 percent due to rounding.
* Details on the series and weight for each price proxy used in the PPI blends is provided in section III.A.3.b.

    We invite public comment on our proposal to rebase and revise the 
IPF market basket to reflect a 2021 base year.
4. Proposed FY 2024 Market Basket Update and Productivity Adjustment
a. Proposed FY 2024 Market Basket Update
    For FY 2024 (that is, beginning October 1, 2023 and ending 
September 30, 2024), we propose to use an estimate of the proposed 
2021-based IPF market basket increase factor to update the IPF PPS base 
payment rate. Consistent with historical practice, we estimate the 
market basket update for the IPF PPS based on IHS Global Inc.'s (IGI) 
forecast. IGI is a nationally recognized economic and financial 
forecasting firm with which CMS contracts to forecast the components of 
the market baskets.
    Using IGI's fourth quarter 2022 forecast with historical data 
through the third quarter of 2022, the projected proposed 2021-based 
IPF market basket increase factor for FY 2024 is 3.2 percent. We 
propose that if more recent data are subsequently available (for 
example, a more recent estimate of the market basket increase factor) 
we would use such data, to determine the FY 2024 update in the final 
rule. For comparison, the current 2016-based IPF market basket is also 
projected to increase by 3.2 percent in FY 2024 based on IGI's fourth 
quarter 2022 forecast. Table 14 compares the proposed 2021-based IPF 
market basket and the 2016-based IPF market basket percent changes.

    Table 14--Proposed 2021-Based IPF Market Basket and 2016-Based IPF Market Basket Percent Changes, FY 2019
                                                 Through FY 2026
----------------------------------------------------------------------------------------------------------------
                                                                Proposed 2021-based IPF   2016-based IPF market
                       Fiscal year (FY)                           market basket index      basket index percent
                                                                     percent change               change
----------------------------------------------------------------------------------------------------------------
Historical data:
    FY 2019...................................................                      2.4                      2.5
    FY 2020...................................................                      2.1                      2.2
    FY 2021...................................................                      2.8                      2.9
    FY 2022...................................................                      5.3                      5.3
                                                               -------------------------------------------------
          Average 2019-2022...................................                      3.2                      3.2
                                                               -------------------------------------------------
Forecast:
----------------------------------------------------------------------------------------------------------------
    FY 2023...................................................                      4.6                      4.6
    FY 2024...................................................                      3.2                      3.2
    FY 2025...................................................                      2.8                      2.8
    FY 2026...................................................                      2.7                      2.8
                                                               -------------------------------------------------
          Average 2023-2026...................................                      3.3                      3.4
----------------------------------------------------------------------------------------------------------------
Note: These market basket percent changes do not include any further adjustments as may be statutorily required.
  Source: IHS Global Inc. 4th quarter 2022 forecast.

b. Proposed Productivity Adjustment
    Section 1886(s)(2)(A)(i) of the Act requires the application of the 
productivity adjustment described in section 1886(b)(3)(B)(xi)(II) of 
the Act to the IPF PPS for the RY beginning in 2012 (that is, a RY that 
coincides with a FY) and each subsequent RY. The statute defines the 
productivity adjustment to be equal to the 10-year moving average of 
changes in annual economy-wide, private nonfarm business multifactor 
productivity (as projected by the Secretary for the 10-year period 
ending with the applicable FY, year, cost reporting period, or other 
annual period) (the ``productivity adjustment''). The United States 
Department of Labor's Bureau of Labor Statistics (BLS) publishes the 
official measures of productivity for the United States economy. We 
note that previously the productivity measure referenced in section 
1886(b)(3)(B)(xi)(II) of the Act, was published by BLS as private 
nonfarm business multifactor productivity. Beginning with the November 
18, 2021 release of productivity data, BLS replaced the term 
multifactor productivity (MFP) with total factor productivity (TFP). 
BLS noted that this is a change in terminology only and will not affect 
the data or methodology. As a result of the BLS name change, the 
productivity measure referenced in section 1886(b)(3)(B)(xi)(II) of the 
Act is now published by BLS as private nonfarm business total factor 
productivity. However, as mentioned above, the data and methods are

[[Page 21257]]

unchanged. We refer readers to www.bls.gov for the BLS historical 
published TFP data. A complete description of IGI's TFP projection 
methodology is available on the CMS website at https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/medicareprogramratesstats/marketbasketresearch. In addition, in the FY 
2022 IPF final rule (86 FR 42611), we noted that effective with FY 2022 
and forward, CMS changed the name of this adjustment to refer to it as 
the productivity adjustment rather than the MFP adjustment.
    Using IGI's fourth quarter 2022 forecast, the 10-year moving 
average growth of TFP for FY 2024 is projected to be 0.2 percent. Thus, 
in accordance with section 1886(s)(2)(A)(i) of the Act, we propose to 
calculate the FY 2024 market basket update, which is used to determine 
the applicable percentage increase for the IPF payments, using IGI's 
fourth quarter 2022 forecast of the proposed 2021-based IPF market 
basket. We proposed to then reduce this percentage increase by the 
estimated productivity adjustment for FY 2024 of 0.2 percentage point 
(the 10-year moving average growth of TFP for the period ending FY 2024 
based on IGI's fourth quarter 2022 forecast). Therefore, the proposed 
FY 2024 IPF update is equal to 3.0 percent (3.2 percent market basket 
update reduced by the 0.2 percentage point productivity adjustment). 
Furthermore, we propose that if more recent data become available after 
the publication of the proposed rule and before the publication of the 
final rule (for example, a more recent estimate of the market basket 
increase factor and/or productivity adjustment), we would use such 
data, if appropriate, to determine the FY 2024 market basket update and 
productivity adjustment in the final rule.
    We invite public comment on our proposals for the FY 2024 market 
basket update and productivity adjustment.
5. Proposed Labor-Related Share for FY 2024
    Due to variations in geographic wage levels and other labor-related 
costs, we believe that payment rates under the IPF PPS should continue 
to be adjusted by a geographic wage index, which would apply to the 
labor-related portion of the Federal per diem base rate (hereafter 
referred to as the labor-related share). The labor-related share is 
determined by identifying the national average proportion of total 
costs that are related to, influenced by, or vary with the local labor 
market. We propose to continue to classify a cost category as labor-
related if the costs are labor intensive and vary with the local labor 
market.
    We propose to include in the labor-related share the sum of the 
relative importance of the following cost categories: Wages and 
Salaries, Employee Benefits, Professional Fees: Labor-related, 
Administrative and Facilities Support Services, Installation, 
Maintenance, and Repair Services, All Other: Labor-related Services, 
and a portion of the Capital-Related cost weight from the proposed 
2021-based IPF market basket. These are the same categories as the 
2016-based IPF market basket.
    Similar to the 2016-based IPF market basket, the proposed 2021-
based IPF market basket includes two cost categories for nonmedical 
Professional fees (including but not limited to, expenses for legal, 
accounting, and engineering services). These are Professional Fees: 
Labor-related and Professional Fees: Nonlabor-related. For the proposed 
2021-based IPF market basket, we propose to estimate the labor-related 
percentage of non-medical professional fees (and assign these expenses 
to the Professional Fees: Labor-related services cost category) based 
on the same method that was used to determine the labor-related 
percentage of professional fees in the 2016-based IPF market basket.
    As was done in the 2016-based IPF market basket, we propose to 
determine the proportion of legal, accounting and auditing, 
engineering, and management consulting services that meet our 
definition of labor-related services based on a survey of hospitals 
conducted by CMS in 2008. We notified the public of our intent to 
conduct this survey on December 9, 2005 (70 FR 73250) and did not 
receive any public comments in response to the notice (71 FR 8588). A 
discussion of the composition of the survey and post-stratification can 
be found in the FY 2010 IPPS/LTCH PPS final rule (74 FR 43850 through 
43856). Based on the weighted results of the survey, we determined that 
hospitals purchase, on average, the following portions of contracted 
professional services outside of their local labor market:
     34 percent of accounting and auditing services.
     30 percent of engineering services.
     33 percent of legal services.
     42 percent of management consulting services.
    We propose to apply each of these percentages to the respective 
2012 Benchmark I-O cost category underlying the professional fees cost 
category to determine the Professional Fees: Nonlabor-related costs. 
The Professional Fees: Labor-related costs were determined to be the 
difference between the total costs for each Benchmark I-O category and 
the Professional Fees: Nonlabor-related costs. This is the same 
methodology that we used to separate the 2016-based IPF market basket 
professional fees category into Professional Fees: Labor-related and 
Professional Fees: Nonlabor-related cost categories (84 FR 38445).
    Effective for transmittal 18, (https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Transmittals/r18p240i) the hospital 
Medicare cost report (CMS Form 2552-10, OMB No. 0938-0050) is 
collecting information on whether a hospital purchased professional 
services (for example, legal, accounting, tax preparation, bookkeeping, 
payroll, advertising, and/or management/consulting services) from an 
unrelated organization and if the majority of these expenses were 
purchased from unrelated organizations located outside of the main 
hospital's local area labor market. We encourage all providers to 
provide this information so we can potentially use these data in future 
rulemaking to determine the labor-related share.
    In the proposed 2021-based IPF market basket, nonmedical 
professional fees that were subject to allocation based on these survey 
results represent 3.3 percent of total costs (and are limited to those 
fees related to Accounting & Auditing, Legal, Engineering, and 
Management Consulting services). Based on our survey results, we 
proposed to apportion 2.1 percentage points of the 3.3 percentage point 
figure into the Professional Fees: Labor-related share cost category 
and designate the remaining 1.2 percentage point into the Professional 
Fees: Nonlabor-related cost category.
    In addition to the professional services listed, for the proposed 
2021-based IPF market basket, we propose to allocate a proportion of 
the Home Office/Related Organization Contract Labor cost weight, 
calculated using the Medicare cost reports, into the Professional Fees: 
Labor-related and Professional Fees: Nonlabor-related cost categories. 
We propose to classify these expenses as labor-related and nonlabor-
related as many facilities are not located in the same geographic area 
as their home office and, therefore, do not meet our definition for the 
labor-related share that requires the services to be purchased in the 
local labor market.
    Similar to the 2016-based IPF market basket, we propose for the 
2021-based

[[Page 21258]]

IPF market basket to use the Medicare cost reports for both 
freestanding IPF providers and hospital-based IPF providers to 
determine the home office labor-related percentages. The Medicare cost 
report requires a hospital to report information regarding their home 
office provider. Using information on the Medicare cost report, we then 
compare the location of the IPF with the location of the IPF's home 
office. We propose to classify an IPF with a home office located in 
their respective labor market if the IPF and its home office are 
located in the same metropolitan statistical area (MSA). We then 
determine the proportion of the Home Office/Related Organization 
Contract Labor cost weight that should be allocated to the labor-
related share based on the percent of total Medicare allowable costs 
for those IPFs that had home offices located in their respective local 
labor markets of total Medicare allowable costs for IPFs with a home 
office. We determined an IPF's and its home office's MSA using their 
zip code information from the Medicare cost report. Using this 
methodology, we determined that 46 percent of IPFs' Medicare allowable 
costs were for home offices located in their respective local labor 
markets. Therefore, we are allocating 46 percent of the Home Office/
Related Organization Contract Labor cost weight (2.1 percentage points 
= 4.7 percent times 46 percent) to the Professional Fees: Labor-related 
cost weight and 54 percent of the Home Office/Related Organization 
Contract Labor cost weight to the Professional Fees: Nonlabor-related 
cost weight (2.5 percentage points = 4.7 percent times 54 percent). The 
same methodology was used for the 2016-based IPF market basket (84 FR 
38445).
    In summary, we apportioned 2.1 percentage points of the non-medical 
professional fees and 2.1 percentage points of the Home Office/Related 
Organization Contract Labor cost weight into the Professional Fees: 
Labor-Related cost category. This amount was added to the portion of 
professional fees that we already identified as labor-related using the 
I-O data such as contracted advertising and marketing costs 
(approximately 0.5 percentage point of total costs) resulting in a 
Professional Fees: Labor-Related cost weight of 4.7 percent.
    As stated, we propose to include in the labor-related share the sum 
of the relative importance of Wages and Salaries, Employee Benefits, 
Professional Fees: Labor-Related, Administrative and Facilities Support 
Services, Installation, Maintenance, and Repair Services, All Other: 
Labor-related Services, and a portion of the Capital-Related cost 
weight from the proposed 2021-based IPF market basket. The relative 
importance reflects the different rates of price change for these cost 
categories between the base year (2021) and FY 2024. Based on IHS 
Global Inc. 4th quarter 2022 forecast of the proposed 2021-based IPF 
market basket, the sum of the FY 2024 relative importance for Wages and 
Salaries, Employee Benefits, Professional Fees: Labor-related, 
Administrative and Facilities Support Services, Installation 
Maintenance & Repair Services, and All Other: Labor-related Services is 
75.4 percent. The portion of Capital costs that is influenced by the 
local labor market is estimated to be 46 percent, which is the same 
percentage applied to the 2016-based IPF market basket. Since the 
relative importance for Capital is 6.8 percent of the proposed 2021-
based IPF market basket in FY 2024, we took 46 percent of 6.8 percent 
to determine the proposed labor-related share of Capital for FY 2024 of 
3.1 percent. Therefore, we propose a total labor-related share for FY 
2024 of 78.5 percent (the sum of 75.4 percent for the operating cost 
and 3.1 percent for the labor-related share of Capital). Table 15 shows 
the FY 2024 labor-related share using the proposed 2021-based IPF 
market basket relative importance and the FY 2023 labor-related share 
using the 2016-based IPF market basket.

             Table 15--Proposed FY 2024 IPF Labor-related share and FY 2023 IPF Labor-Related Share
----------------------------------------------------------------------------------------------------------------
                                                                 FY 2024 Labor-related     FY 2023 Final labor-
                                                                share based on proposed   related share based on
                                                                 2021-based IPF market    2016-based IPF market
                                                                       basket \1\               basket \2\
----------------------------------------------------------------------------------------------------------------
Wages and Salaries............................................                     53.3                     53.2
Employee Benefits.............................................                     14.2                     13.5
Professional Fees: Labor-related \3\..........................                      4.7                      4.3
Administrative and Facilities Support Services................                      0.6                      0.6
Installation, Maintenance and Repair Services.................                      1.2                      1.3
All Other: Labor-related Services.............................                      1.4                      1.5
                                                               -------------------------------------------------
    Subtotal..................................................                     75.4                     74.4
----------------------------------------------------------------------------------------------------------------
    Labor-related portion of capital (46%)....................                      3.1                      3.0
                                                               -------------------------------------------------
    Total LRS.................................................                     78.5                     77.4
----------------------------------------------------------------------------------------------------------------
\1\ IHS Global Inc. 4th quarter 2022 forecast.
\2\ Based on IHS Global Inc. 2nd quarter 2022 forecast as published in the Federal Register (87 FR 46851).
\3\ Includes all contract advertising and marketing costs and a portion of accounting, architectural,
  engineering, legal, management consulting, and home office/related organization contract labor costs.


[[Page 21259]]

    The FY 2024 labor-related share using the proposed 2021-based IPF 
market basket is about 1.0 percentage point higher than the FY 2023 
labor-related share using the 2016-based IPF market basket. This higher 
labor-related share is primarily due to the incorporation of the 2021 
Medicare cost report data, which increased the Compensation cost weight 
by 0.9 percentage point compared to the 2016-based IPF market basket as 
shown in Table 1 and Table 2 in section III.A.3.a.(2) of this proposed 
rule. We invite public comment on the proposed labor-related share for 
FY 2024.

B. Proposed Updates to the IPF PPS Rates for FY Beginning October 1, 
2023

    The IPF PPS is based on a standardized Federal per diem base rate 
calculated from the IPF average per diem costs and adjusted for budget 
neutrality in the implementation year. The Federal per diem base rate 
is used as the standard payment per day under the IPF PPS and is 
adjusted by the patient-level and facility-level adjustments that are 
applicable to the IPF stay. A detailed explanation of how we calculated 
the average per diem cost appears in the November 2004 IPF PPS final 
rule (69 FR 66926).
1. Determining the Standardized Budget-Neutral Federal per Diem Base 
Rate
    Section 124(a)(1) of the BBRA required that we implement the IPF 
PPS in a budget-neutral manner. In other words, the amount of total 
payments under the IPF PPS, including any payment adjustments, must be 
projected to be equal to the amount of total payments that would have 
been made if the IPF PPS were not implemented. Therefore, we calculated 
the budget neutrality factor by setting the total estimated IPF PPS 
payments to be equal to the total estimated payments that would have 
been made under the Tax Equity and Fiscal Responsibility Act of 1982 
(TEFRA) (Pub. L. 97-248) methodology had the IPF PPS not been 
implemented. A step-by-step description of the methodology used to 
estimate payments under the Tax Equity and Fiscal Responsibility Act 
(TEFRA) payment system appears in the November 2004 IPF PPS final rule 
(69 FR 66926).
    Under the IPF PPS methodology, we calculated the final Federal per 
diem base rate to be budget-neutral during the IPF PPS implementation 
period (that is, the 18-month period from January 1, 2005 through June 
30, 2006) using a July 1 update cycle. We updated the average cost per 
day to the midpoint of the IPF PPS implementation period (October 1, 
2005), and this amount was used in the payment model to establish the 
budget-neutrality adjustment.
    Next, we standardized the IPF PPS Federal per diem base rate to 
account for the overall positive effects of the IPF PPS payment 
adjustment factors by dividing total estimated payments under the TEFRA 
payment system by estimated payments under the IPF PPS. The information 
concerning this standardization can be found in the November 2004 IPF 
PPS final rule (69 FR 66932) and the RY 2006 IPF PPS final rule (71 FR 
27045). We then reduced the standardized Federal per diem base rate to 
account for the outlier policy, the stop loss provision, and 
anticipated behavioral changes. A complete discussion of how we 
calculated each component of the budget neutrality adjustment appears 
in the November 2004 IPF PPS final rule (69 FR 66932 through 66933) and 
in the RY 2007 IPF PPS final rule (71 FR 27044 through 27046). The 
final standardized budget-neutral Federal per diem base rate 
established for cost reporting periods beginning on or after January 1, 
2005 was calculated to be $575.95.
    The Federal per diem base rate has been updated in accordance with 
applicable statutory requirements and Sec.  412.428 through publication 
of annual notices or proposed and final rules. A detailed discussion on 
the standardized budget-neutral Federal per diem base rate and the ECT 
payment per treatment appears in the FY 2014 IPF PPS update notice (78 
FR 46738 through 46740). These documents are available on the CMS 
website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientPsychFacilPPS/.
    IPFs must include a valid procedure code for ECT services provided 
to IPF beneficiaries in order to bill for ECT services, as described in 
our Medicare Claims Processing Manual, Chapter 3, Section 190.7.3 
(available at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c03.pdf.) There were no changes to the ECT 
procedure codes used on IPF claims as a result of the final update to 
the ICD-10-PCS code set for FY 2024. Addendum B to this proposed rule 
shows the ECT procedure codes for FY 2024 and is available on our 
website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientPsychFacilPPS/tools.html.
2. Proposed Update of the Federal per Diem Base Rate and 
Electroconvulsive Therapy Payment per Treatment
    The current (FY 2023) Federal per diem base rate is $865.63 and the 
ECT payment per treatment is $372.67. For the proposed FY 2024 Federal 
per diem base rate, we applied the payment rate update of 3.0 percent--
that is, the 2021-based IPF market basket increase for FY 2024 of 3.2 
percent less the productivity adjustment of 0.2 percentage point--and 
the wage index budget-neutrality factor of 1.0011 (as discussed in 
section IV.D.1 of this proposed rule) to the FY 2023 Federal per diem 
base rate of $865.63, yielding a proposed Federal per diem base rate of 
$892.58 for FY 2024. Similarly, we applied the proposed 3.0 percent 
payment rate update and the 1.0011 wage index budget-neutrality factor 
to the FY 2023 ECT payment per treatment of $372.67, yielding a 
proposed ECT payment per treatment of $384.27 for FY 2024.
    Section 1886(s)(4)(A)(i) of the Act requires that for RY 2014 and 
each subsequent RY, in the case of an IPF that fails to report required 
quality data with respect to such RY, the Secretary will reduce any 
annual update to a standard Federal rate for discharges during the RY 
by 2.0 percentage points. Therefore, we propose to apply a 2.0 
percentage points reduction to the Federal per diem base rate and the 
ECT payment per treatment as follows:
     For IPFs that fail requirements under the IPFQR Program, 
we would apply a proposed 1.0 percent payment rate update--that is, the 
proposed IPF market basket increase for FY 2024 of 3.2 percent less the 
proposed productivity adjustment of 0.2 percentage point for a proposed 
update of 3.0 percent, and further reduced by 2.0 percentage points in 
accordance with section 1886(s)(4)(A)(i) of the Act--and the proposed 
wage index budget-neutrality factor of 1.0011 to the FY 2024 Federal 
per diem base rate of $892.58, yielding a proposed Federal per diem 
base rate of $875.25 for FY 2024.
     For IPFs that fail to meet requirements under the IPFQR 
Program, we would apply the proposed 1.0 percent annual payment rate 
update and the proposed 1.0011 wage index budget-neutrality factor to 
the FY 2024 ECT payment per treatment of $384.27 yielding a proposed 
ECT payment per treatment of $376.81 for FY 2024. Lastly, we propose 
that if more recent data become available, we would use such data, if 
appropriate, to determine the FY 2024 Federal per diem base rate

[[Page 21260]]

and ECT payment per treatment for the final rule.

C. Proposed Updates to the IPF PPS Patient-Level Adjustment Factors

1. Overview of the IPF PPS Adjustment Factors
    The IPF PPS payment adjustments were derived from a regression 
analysis of 100 percent of the FY 2002 Medicare Provider and Analysis 
Review (MedPAR) data file, which contained 483,038 cases. For a more 
detailed description of the data file used for the regression analysis, 
see the November 2004 IPF PPS final rule (69 FR 66935 through 66936). 
We propose to use the existing regression-derived adjustment factors 
established in 2005 for FY 2024. However, we have used more recent 
claims data to simulate payments to finalize the outlier fixed dollar 
loss threshold amount and to assess the impact of the IPF PPS updates.
2. IPF PPS Patient-Level Adjustments
    The IPF PPS includes payment adjustments for the following patient-
level characteristics: Medicare Severity Diagnosis Related Groups (MS-
DRGs) assignment of the patient's principal diagnosis, selected 
comorbidities, patient age, and the variable per diem adjustments.
a. Proposed Update to MS-DRG Assignment
    We believe it is important to maintain for IPFs the same diagnostic 
coding and Diagnosis Related Group (DRG) classification used under the 
IPPS for providing psychiatric care. For this reason, when the IPF PPS 
was implemented for cost reporting periods beginning on or after 
January 1, 2005, we adopted the same diagnostic code set (ICD-9-CM) and 
DRG patient classification system (MS-DRGs) that were utilized at the 
time under the IPPS. In the RY 2009 IPF PPS notice (73 FR 25709), we 
discussed CMS' effort to better recognize resource use and the severity 
of illness among patients. CMS adopted the new MS-DRGs for the IPPS in 
the FY 2008 IPPS final rule with comment period (72 FR 47130). In the 
RY 2009 IPF PPS notice (73 FR 25716), we provided a crosswalk to 
reflect changes that were made under the IPF PPS to adopt the new MS-
DRGs. For a detailed description of the mapping changes from the 
original DRG adjustment categories to the current MS-DRG adjustment 
categories, we refer readers to the RY 2009 IPF PPS notice (73 FR 
25714).
    The IPF PPS includes payment adjustments for designated psychiatric 
DRGs assigned to the claim based on the patient's principal diagnosis. 
The DRG adjustment factors were expressed relative to the most 
frequently reported psychiatric DRG in FY 2002, that is, DRG 430 
(psychoses). The coefficient values and adjustment factors were derived 
from the regression analysis discussed in detail in the November 28, 
2003 IPF proposed rule (68 FR 66923; 66928 through 66933) and the 
November 15, 2004 IPF final rule (69 FR 66933 through 66960). Mapping 
the DRGs to the MS-DRGs resulted in the current 17 IPF MS-DRGs, instead 
of the original 15 DRGs, for which the IPF PPS provides an adjustment. 
For FY 2024, we are not proposing any changes to the IPF MS-DRG 
adjustment factors and are retaining the existing IPF MS-DRG adjustment 
factors.
    In the FY 2015 IPF PPS final rule published August 6, 2014 in the 
Federal Register titled, ``Inpatient Psychiatric Facilities Prospective 
Payment System--Update for FY Beginning October 1, 2014 (FY 2015)'' (79 
FR 45945 through 45947), we finalized conversions of the ICD-9-CM-based 
MS-DRGs to ICD-10-CM/PCS-based MS-DRGs, which were implemented on 
October 1, 2015. As discussed in the FY 2015 IPF PPS proposed rule (79 
FR 26047) in more detail, every year, changes to the ICD-10-CM and the 
ICD-10-PCS coding system are addressed in the IPPS proposed and final 
rules. The changes to the codes are effective October 1 of each year 
and must be used by acute care hospitals as well as other providers to 
report diagnostic and procedure information. In accordance with Sec.  
412.428(e), the IPF PPS has always incorporated ICD-10-CM and ICD-10-
PCS coding changes made in the annual IPPS update and will continue to 
do so. We will continue to publish coding changes in a Transmittal/
Change Request, similar to how coding changes are announced by the IPPS 
and LTCH PPS. The coding changes relevant to the IPF PPS are also 
published in the IPF PPS proposed and final rules, or in IPF PPS update 
notices. Further information on the ICD-10-CM/PCS MS-DRG conversion 
project can be found on the CMS ICD-10-CM website at https://www.cms.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html.
    For FY 2024, we propose to continue making the existing payment 
adjustment for psychiatric diagnoses that group to one of the existing 
17 IPF MS-DRGs listed in Addendum A. Addendum A is available on our 
website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientPsychFacilPPS/tools.html. Psychiatric principal 
diagnoses that do not group to one of the 17 designated MS-DRGs will 
still receive the Federal per diem base rate and all other applicable 
adjustments, but the payment will not include an MS-DRG adjustment.
    The diagnoses for each IPF MS-DRG will be updated as of October 1, 
2023, using the final FY 2024 IPPS ICD-10-CM/PCS code sets. The FY 2024 
IPPS/LTCH PPS final rule will include tables of the changes to the ICD-
10-CM/PCS code sets, which underlie the FY 2024 IPF MS-DRGs. Both the 
FY 2024 IPPS final rule and the tables of final changes to the ICD-10-
CM/PCS code sets, which underlie the FY 2024 MS-DRGs, will be available 
on the CMS IPPS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/.
Code First
    As discussed in the ICD-10-CM Official Guidelines for Coding and 
Reporting, certain conditions have both an underlying etiology and 
multiple body system manifestations due to the underlying etiology. For 
such conditions, the ICD-10-CM has a coding convention that requires 
the underlying condition be sequenced first followed by the 
manifestation. Wherever such a combination exists, there is a ``use 
additional code'' note at the etiology code, and a ``code first'' note 
at the manifestation code. These instructional notes indicate the 
proper sequencing order of the codes (etiology followed by 
manifestation). In accordance with the ICD-10-CM Official Guidelines 
for Coding and Reporting, when a primary (psychiatric) diagnosis code 
has a ``code first'' note, the provider will follow the instructions in 
the ICD-10-CM Tabular List. The submitted claim goes through the CMS 
processing system, which will identify the principal diagnosis code as 
non-psychiatric and search the secondary codes for a psychiatric code 
to assign a DRG code for adjustment. The system will continue to search 
the secondary codes for those that are appropriate for comorbidity 
adjustment.
    For more information on the code first policy, we refer our readers 
to the November 2004 IPF PPS final rule (69 FR 66945), and see sections 
I.A.13 and I.B.7 of the FY 2020 ICD-10-CM Coding Guidelines, available 
at https://www.cdc.gov/nchs/data/icd/10cmguidelines-FY2020_final.pdf. 
In the FY 2015 IPF PPS final rule, we provided a code first table for 
reference that highlights the same or similar manifestation codes where 
the code first instructions apply in ICD-10-CM that

[[Page 21261]]

were present in ICD-10-CM (79 FR 46009). In FY 2018, FY 2019 and FY 
2020, there were no changes to the final ICD-10-CM codes in the IPF 
Code First table. For FY 2021 and FY 2022, there were 18 ICD-10-CM 
codes deleted from the final IPF Code First table. For FY 2023, there 
were 2 ICD-10-CM codes deleted and 48 ICD-10-CM codes added to the IPF 
Code First table. For FY 2024, there are no proposed changes to the 
Code First Table. The proposed FY 2024 Code First table is shown in 
Addendum B on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientPsychFacilPPS/tools.html.
b. Proposed Payment for Comorbid Conditions
    The intent of the comorbidity adjustments is to recognize the 
increased costs associated with comorbid conditions by providing 
additional payments for certain existing medical or psychiatric 
conditions that are expensive to treat. In our RY 2012 IPF PPS final 
rule (76 FR 26451 through 26452), we explained that the IPF PPS 
includes 17 comorbidity categories and identified the new, revised, and 
deleted ICD-9-CM diagnosis codes that generate a comorbid condition 
payment adjustment under the IPF PPS for RY 2012 (76 FR 26451).
    Comorbidities are specific patient conditions that are secondary to 
the patient's principal diagnosis and that require treatment during the 
stay. Diagnoses that relate to an earlier episode of care and have no 
bearing on the current hospital stay are excluded and must not be 
reported on IPF claims. Comorbid conditions must exist at the time of 
admission or develop subsequently, and affect the treatment received, 
LOS, or both treatment and LOS.
    For each claim, an IPF may receive only one comorbidity adjustment 
within a comorbidity category, but it may receive an adjustment for 
more than one comorbidity category. Current billing instructions for 
discharge claims, on or after October 1, 2015, require IPFs to enter 
the complete ICD-10-CM codes for up to 24 additional diagnoses if they 
co-exist at the time of admission, or develop subsequently and impact 
the treatment provided.
    The comorbidity adjustments were determined based on the regression 
analysis using the diagnoses reported by IPFs in FY 2002. The principal 
diagnoses were used to establish the DRG adjustments and were not 
accounted for in establishing the comorbidity category adjustments, 
except where ICD-9-CM code first instructions applied. In a code first 
situation, the submitted claim goes through the CMS processing system, 
which will identify the principal diagnosis code as non-psychiatric and 
search the secondary codes for a psychiatric code to assign an MS-DRG 
code for adjustment. The system will continue to search the secondary 
codes for those that are appropriate for comorbidity adjustment.
    As noted previously, it is our policy to maintain the same 
diagnostic coding set for IPFs that is used under the IPPS for 
providing the same psychiatric care. The 17 comorbidity categories 
formerly defined using ICD-9-CM codes were converted to ICD-10-CM/PCS 
in our FY 2015 IPF PPS final rule (79 FR 45947 through 45955). The goal 
for converting the comorbidity categories is referred to as 
replication, meaning that the payment adjustment for a given patient 
encounter is the same after ICD-10-CM implementation as it will be if 
the same record had been coded in ICD-9-CM and submitted prior to ICD-
10-CM/PCS implementation on October 1, 2015. All conversion efforts 
were made with the intent of achieving this goal. For FY 2024, we 
propose to use the same comorbidity adjustment factors in effect in FY 
2023. The proposed FY 2024 comorbidity adjustment factors are found in 
Addendum A, available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientPsychFacilPPS/tools.html.
    For FY 2024, we propose to add 2 ICD-10-CM/PCS codes and remove 1 
ICD-10-CM/PCS code from the Chronic Renal Failure category. The 
proposed FY 2024 comorbidity codes are shown in Addenda B, available on 
the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientPsychFacilPPS/tools.html.
    In accordance with the policy established in the FY 2015 IPF PPS 
final rule (79 FR 45949 through 45952), we reviewed all new FY 2024 
ICD-10-CM codes to remove codes that were site ``unspecified'' in terms 
of laterality from the FY 2024 ICD-10-CM/PCS codes in instances where 
more specific codes are available. As we stated in the FY 2015 IPF PPS 
final rule, we believe that specific diagnosis codes that narrowly 
identify anatomical sites where disease, injury, or a condition exists 
should be used when coding patients' diagnoses whenever these codes are 
available. We finalized in the FY 2015 IPF PPS rule, that we would 
remove site ``unspecified'' codes from the IPF PPS ICD-10-CM/PCS codes 
in instances when laterality codes (site specified codes) are 
available, as the clinician should be able to identify a more specific 
diagnosis based on clinical assessment at the medical encounter. None 
of the finalized additions to the FY 2024 ICD-10-CM/PCS codes were site 
``unspecified'' by laterality, therefore, we are not removing any of 
the new codes.
c. Proposed Patient Age Adjustments
    As explained in the November 2004 IPF PPS final rule (69 FR 66922), 
we analyzed the impact of age on per diem cost by examining the age 
variable (range of ages) for payment adjustments. In general, we found 
that the cost per day increases with age. The older age groups are 
costlier than the under 45 age group, the differences in per diem cost 
increase for each successive age group, and the differences are 
statistically significant. For FY 2024, we propose to use the patient 
age adjustments currently in effect for FY 2023, as shown in Addendum A 
of this proposed rule (see https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientPsychFacilPPS/tools.html).
d. Proposed Variable per Diem Adjustments
    We explained in the November 2004 IPF PPS final rule (69 FR 66946) 
that the regression analysis indicated that per diem cost declines as 
the LOS increases. The variable per diem adjustments to the Federal per 
diem base rate account for ancillary and administrative costs that 
occur disproportionately in the first days after admission to an IPF. 
As discussed in the November 2004 IPF PPS final rule, we used a 
regression analysis to estimate the average differences in per diem 
cost among stays of different lengths (69 FR 66947 through 66950). As a 
result of this analysis, we established variable per diem adjustments 
that begin on day 1 and decline gradually until day 21 of a patient's 
stay. For day 22 and thereafter, the variable per diem adjustment 
remains the same each day for the remainder of the stay. However, the 
adjustment applied to day 1 depends upon whether the IPF has a 
qualifying ED. If an IPF has a qualifying ED, it receives a 1.31 
adjustment factor for day 1 of each stay. If an IPF does not have a 
qualifying ED, it receives a 1.19 adjustment factor for day 1 of the 
stay. The ED adjustment is explained in more detail in section III.D.4 
of this proposed rule.
    For FY 2024, we propose to use the variable per diem adjustment 
factors currently in effect in FY 2023, as shown in Addendum A of this 
proposed rule

[[Page 21262]]

(available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientPsychFacilPPS/tools.html). A complete discussion of 
the variable per diem adjustments appears in the November 2004 IPF PPS 
final rule (69 FR 66946).

D. Proposed Updates to the IPF PPS Facility-Level Adjustments

    The IPF PPS includes facility-level adjustments for the wage index, 
IPFs located in rural areas, teaching IPFs, cost of living adjustments 
for IPFs located in Alaska and Hawaii, and IPFs with a qualifying ED.
1. Wage Index Adjustment
a. Background
    As discussed in the RY 2007 IPF PPS final rule (71 FR 27061), RY 
2009 IPF PPS (73 FR 25719) and the RY 2010 IPF PPS notices (74 FR 
20373), to provide an adjustment for geographic wage levels, the labor-
related portion of an IPF's payment is adjusted using an appropriate 
wage index. Currently, an IPF's geographic wage index value is 
determined based on the actual location of the IPF in an urban or rural 
area, as defined in 42 CFR 412.64(b)(1)(ii)(A) and (C).
    Due to the variation in costs and because of the differences in 
geographic wage levels, in the November 15, 2004 IPF PPS final rule, we 
required that payment rates under the IPF PPS be adjusted by a 
geographic wage index. We proposed and finalized a policy to use the 
unadjusted, pre-floor, pre-reclassified IPPS hospital wage index to 
account for geographic differences in IPF labor costs. We implemented 
use of the pre-floor, pre-reclassified IPPS hospital wage data to 
compute the IPF wage index since there was not an IPF-specific wage 
index available. We believe that IPFs generally compete in the same 
labor market as IPPS hospitals so the pre-floor, pre-reclassified IPPS 
hospital wage data should be reflective of labor costs of IPFs. We 
believe this pre-floor, pre-reclassified IPPS hospital wage index to be 
the best available data to use as proxy for an IPF specific wage index. 
As discussed in the RY 2007 IPF PPS final rule (71 FR 27061 through 
27067), under the IPF PPS, the wage index is calculated using the IPPS 
wage index for the labor market area in which the IPF is located, 
without considering geographic reclassifications, floors, and other 
adjustments made to the wage index under the IPPS. For a complete 
description of these IPPS wage index adjustments, we refer readers to 
the FY 2019 IPPS/LTCH PPS final rule (83 FR 41362 through 41390). Our 
wage index policy at Sec.  412.424(a)(2), requires that we use the best 
Medicare data available to estimate costs per day, including an 
appropriate wage index to adjust for wage differences.
    When the IPF PPS was implemented in the November 15, 2004 IPF PPS 
final rule, with an effective date of January 1, 2005, the pre-floor, 
pre-reclassified IPPS hospital wage index that was available at the 
time was the FY 2005 pre-floor, pre-reclassified IPPS hospital wage 
index. Historically, the IPF wage index for a given RY has used the 
pre-floor, pre-reclassified IPPS hospital wage index from the prior FY 
as its basis. This has been due in part to the pre-floor, pre-
reclassified IPPS hospital wage index data that were available during 
the IPF rulemaking cycle, where an annual IPF notice or IPF final rule 
was usually published in early May. This publication timeframe was 
relatively early compared to other Medicare payment rules because the 
IPF PPS follows a RY, which was defined in the implementation of the 
IPF PPS as the 12-month period from July 1 to June 30 (69 FR 66927). 
Therefore, the best available data at the time the IPF PPS was 
implemented was the pre-floor, pre-reclassified IPPS hospital wage 
index from the prior FY (for example, the RY 2006 IPF wage index was 
based on the FY 2005 pre-floor, pre-reclassified IPPS hospital wage 
index).
    In the RY 2012 IPF PPS final rule, we changed the reporting year 
timeframe for IPFs from a RY to the FY, which begins October 1 and ends 
September 30 (76 FR 26434 through 26435). In that RY 2012 IPF PPS final 
rule, we continued our established policy of using the pre-floor, pre-
reclassified IPPS hospital wage index from the prior year (that is, 
from FY 2011) as the basis for the FY 2012 IPF wage index. This policy 
of basing a wage index on the prior year's pre-floor, pre-reclassified 
IPPS hospital wage index has been followed by other Medicare payment 
systems, such as hospice and inpatient rehabilitation facilities. By 
continuing with our established policy, we remained consistent with 
other Medicare payment systems.
    In FY 2020, we finalized the IPF wage index methodology to align 
the IPF PPS wage index with the same wage data timeframe used by the 
IPPS for FY 2020 and subsequent years. Specifically, we finalized to 
use the pre-floor, pre-reclassified IPPS hospital wage index from the 
FY concurrent with the IPF FY as the basis for the IPF wage index. For 
example, the FY 2020 IPF wage index was based on the FY 2020 pre-floor, 
pre-reclassified IPPS hospital wage index rather than on the FY 2019 
pre-floor, pre-reclassified IPPS hospital wage index.
    We explained in the FY 2020 proposed rule (84 FR 16973), that using 
the concurrent pre-floor-, pre-reclassified IPPS hospital wage index 
will result in the most up-to-date wage data being the basis for the 
IPF wage index. It will also result in more consistency and parity in 
the wage index methodology used by other Medicare payment systems. The 
Medicare SNF PPS already used the concurrent IPPS hospital wage index 
data as the basis for the SNF PPS wage index. Thus, the wage adjusted 
Medicare payments of various provider types will be based upon wage 
index data from the same timeframe. CMS proposed similar policies to 
use the concurrent pre-floor, pre-reclassified IPPS hospital wage index 
data in other Medicare payment systems, such as hospice and inpatient 
rehabilitation facilities. For FY 2024, we propose to continue using 
the concurrent pre-floor, pre-reclassified IPPS hospital wage index as 
the basis for the IPF wage index.
    We propose to apply the IPF wage index adjustment to the labor-
related share of the national base rate and ECT payment per treatment. 
The labor-related share of the national rate and ECT payment per 
treatment would change from 77.4 percent in FY 2023 to 78.5 percent in 
FY 2024. This percentage reflects the proposed labor-related share of 
the proposed 2021-based IPF market basket for FY 2024 (see section 
III.A of this proposed rule).
b. Office of Management and Budget (OMB) Bulletins
i. Background
    The wage index used for the IPF PPS is calculated using the 
unadjusted, pre-reclassified and pre-floor IPPS wage index data and is 
assigned to the IPF on the basis of the labor market area in which the 
IPF is geographically located. IPF labor market areas are delineated 
based on the Core Based Statistical Area (CBSAs) established by the 
OMB.
    Generally, OMB issues major revisions to statistical areas every 10 
years, based on the results of the decennial census. However, OMB 
occasionally issues minor updates and revisions to statistical areas in 
the years between the decennial censuses through OMB Bulletins. These 
bulletins contain information regarding CBSA changes, including changes 
to CBSA numbers and titles. OMB bulletins may be accessed online at 
https://www.whitehouse.gov/omb/information-for-agencies/bulletins/. In 
accordance

[[Page 21263]]

with our established methodology, the IPF PPS has historically adopted 
any CBSA changes that are published in the OMB bulletin that 
corresponds with the IPPS hospital wage index used to determine the IPF 
wage index and, when necessary and appropriate, has proposed and 
finalized transition policies for these changes.
    In the RY 2007 IPF PPS final rule (71 FR 27061 through 27067), we 
adopted the changes discussed in the OMB Bulletin No. 03-04 (June 6, 
2003), which announced revised definitions for Micropolitan Statistical 
Areas and the creation of Micropolitan Statistical Areas and Combined 
Statistical Areas. In adopting the OMB CBSA geographic designations in 
RY 2007, we did not provide a separate transition for the CBSA-based 
wage index since the IPF PPS was already in a transition period from 
TEFRA payments to PPS payments.
    In the RY 2009 IPF PPS notice, we incorporated the CBSA 
nomenclature changes published in the most recent OMB bulletin that 
applied to the IPPS hospital wage index used to determine the current 
IPF wage index and stated that we expected to continue to do the same 
for all the OMB CBSA nomenclature changes in future IPF PPS rules and 
notices, as necessary (73 FR 25721).
    Subsequently, CMS adopted the changes that were published in past 
OMB bulletins in the FY 2016 IPF PPS final rule (80 FR 46682 through 
46689), the FY 2018 IPF PPS rate update (82 FR 36778 through 36779), 
the FY 2020 IPF PPS final rule (84 FR 38453 through 38454), and the FY 
2021 IPF PPS final rule (85 FR 47051 through 47059). We direct readers 
to each of these rules for more information about the changes that were 
adopted and any associated transition policies.
    In part due to the scope of changes involved in adopting the CBSA 
delineations for FY 2021, we finalized a 2-year transition policy 
consistent with our past practice of using transition policies to help 
mitigate negative impacts on hospitals of certain wage index policy 
changes. We applied a 5-percent cap on wage index decreases to all IPF 
providers that had any decrease in their wage indexes, regardless of 
the circumstance causing the decline, so that an IPF's final wage index 
for FY 2021 will not be less than 95 percent of its final wage index 
for FY 2020, regardless of whether the IPF was part of an updated CBSA. 
We refer readers to the FY 2021 IPF PPS final rule (85 FR 47058 through 
47059) for a more detailed discussion about the wage index transition 
policy for FY 2021.
    On March 6, 2020 OMB issued OMB Bulletin 20-01 (available on the 
web at https://www.whitehouse.gov/wp-content/uploads/2020/03/Bulletin-20-01.pdf). In considering whether to adopt this bulletin, we analyzed 
whether the changes in this bulletin would have a material impact on 
the IPF PPS wage index. This bulletin creates only one Micropolitan 
statistical area. As discussed in further detail in section 
III.D.1.b.ii of this proposed rule, since Micropolitan areas are 
considered rural for the IPF PPS wage index, this bulletin has no 
material impact on the IPF PPS wage index. That is, the constituent 
county of the new Micropolitan area was considered rural effective as 
of FY 2021 and would continue to be considered rural if we adopted OMB 
Bulletin 20-01. Therefore, we did not propose to adopt OMB Bulletin 20-
01 in the FY 2022 IPF PPS proposed rule.
    In the FY 2023 IPF PPS final rule (87 FR 46856 through 46859), we 
finalized a permanent 5-percent cap on any decrease to a provider's 
wage index from its wage index in the prior year, and we stated that we 
would apply this cap in a budget-neutral manner. Additionally, we 
finalized a policy that a new IPF would be paid the wage index for the 
area in which it is geographically located for its first full or 
partial FY with no cap applied because a new IPF would not have a wage 
index in the prior FY. We amended the IPF PPS regulations at Sec.  
412.424(d)(1)(i) to reflect this permanent cap on wage index decreases. 
We refer readers to the FY 2023 IPF PPS final rule for a more detailed 
discussion about this policy.
ii. Micropolitan Statistical Areas (MSA)
    OMB defines a ``Micropolitan Statistical Area'' as a CBSA 
associated with at least one urban cluster that has a population of at 
least 10,000, but less than 50,000 (75 FR 37252). We refer to these as 
Micropolitan Areas. After extensive impact analysis, consistent with 
the treatment of these areas under the IPPS as discussed in the FY 2005 
IPPS final rule (69 FR 49029 through 49032), we determined the best 
course of action would be to treat Micropolitan Areas as ``rural'' and 
include them in the calculation of each State's IPF PPS rural wage 
index. We refer the reader to the FY 2007 IPF PPS final rule (71 FR 
27064 through 27065) for a complete discussion regarding treating 
Micropolitan Areas as rural.
c. Proposed Adjustment for Rural Location
    In the November 2004 IPF PPS final rule, (69 FR 66954), we provided 
a 17 percent payment adjustment for IPFs located in a rural area. This 
adjustment was based on the regression analysis, which indicated that 
the per diem cost of rural facilities was 17 percent higher than that 
of urban facilities after accounting for the influence of the other 
variables included in the regression. This 17 percent adjustment has 
been part of the IPF PPS each year since the inception of the IPF PPS. 
For FY 2024, we propose to apply a 17 percent payment adjustment for 
IPFs located in a rural area as defined at Sec.  412.64(b)(1)(ii)(C) 
(see 69 FR 66954 for a complete discussion of the adjustment for rural 
locations).
d. Proposed Budget Neutrality Adjustment
    Changes to the wage index are made in a budget-neutral manner so 
that updates do not increase expenditures. Therefore, for FY 2024, we 
propose to apply a budget-neutrality adjustment in accordance with our 
existing budget-neutrality policy. This policy requires us to update 
the wage index in such a way that total estimated payments to IPFs for 
FY 2024 are the same with or without the changes (that is, in a budget-
neutral manner) by applying a budget-neutrality factor to the IPF PPS 
rates. We use the following steps to ensure that the rates reflect the 
FY 2024 update to the wage indexes (based on the FY 2020 hospital cost 
report data) and the labor-related share in a budget-neutral manner:
    Step 1: Simulate estimated IPF PPS payments, using the FY 2023 IPF 
wage index values (available on the CMS website) and labor-related 
share (as published in the FY 2023 IPF PPS final rule (87 FR 46846).
    Step 2: Simulate estimated IPF PPS payments using the proposed FY 
2024 IPF wage index values (available on the CMS website) and proposed 
FY 2024 labor-related share (based on the latest available data as 
discussed previously).
    Step 3: Divide the amount calculated in step 1 by the amount 
calculated in step 2. The resulting quotient is the proposed FY 2024 
budget-neutral wage adjustment factor of 1.0011.
    Step 4: Apply the FY 2024 budget-neutral wage adjustment factor 
from step 3 to the FY 2023 IPF PPS Federal per diem base rate after the 
application of the market basket update described in section III.A of 
this proposed rule, to determine the FY 2024 IPF PPS Federal per diem 
base rate.
2. Proposed Teaching Adjustment
a. Background
    In the November 2004 IPF PPS final rule, we implemented regulations 
at

[[Page 21264]]

Sec.  412.424(d)(1)(iii) to establish a facility-level adjustment for 
IPFs that are, or are part of, teaching hospitals. The teaching 
adjustment accounts for the higher indirect operating costs experienced 
by hospitals that participate in graduate medical education (GME) 
programs. The payment adjustments are made based on the ratio of the 
number of fulltime equivalent (FTE) interns and residents training in 
the IPF and the IPF's average daily census.
    Medicare makes direct GME payments (for direct costs such as 
resident and teaching physician salaries, and other direct teaching 
costs) to all teaching hospitals including those paid under a PPS, and 
those paid under the TEFRA rate-of-increase limits. These direct GME 
payments are made separately from payments for hospital operating costs 
and are not part of the IPF PPS. The direct GME payments do not address 
the estimated higher indirect operating costs teaching hospitals may 
face.
    The results of the regression analysis of FY 2002 IPF data 
established the basis for the payment adjustments included in the 
November 2004 IPF PPS final rule. The results showed that the indirect 
teaching cost variable is significant in explaining the higher costs of 
IPFs that have teaching programs. We calculated the teaching adjustment 
based on the IPF's ``teaching variable'', which is (1 + [the number of 
FTE residents training in the IPF's average daily census]). The 
teaching variable is then raised to the 0.5150 power to result in the 
teaching adjustment. This formula is subject to the limitations on the 
number of FTE residents, which are described in this section of this 
proposed rule.
    We established the teaching adjustment in a manner that limited the 
incentives for IPFs to add FTE residents for the purpose of increasing 
their teaching adjustment. We imposed a cap on the number of FTE 
residents that may be counted for purposes of calculating the teaching 
adjustment. The cap limits the number of FTE residents that teaching 
IPFs may count for the purpose of calculating the IPF PPS teaching 
adjustment, not the number of residents teaching institutions can hire 
or train. We calculated the number of FTE residents that trained in the 
IPF during a ``base year'' and used that FTE resident number as the 
cap. An IPF's FTE resident cap is ultimately determined based on the 
final settlement of the IPF's most recent cost report filed before 
November 15, 2004 (69 FR 66955). A complete discussion of the temporary 
adjustment to the FTE cap to reflect residents due to hospital closure 
or residency program closure appears in the RY 2012 IPF PPS proposed 
rule (76 FR 5018 through 5020) and the RY 2012 IPF PPS final rule (76 
FR 26453 through 26456).
    In the regression analysis, the logarithm of the teaching variable 
had a coefficient value of 0.5150. We converted this cost effect to a 
teaching payment adjustment by treating the regression coefficient as 
an exponent and raising the teaching variable to a power equal to the 
coefficient value. We note that the coefficient value of 0.5150 was 
based on the regression analysis holding all other components of the 
payment system constant. A complete discussion of how the teaching 
adjustment was calculated appears in the November 2004 IPF PPS final 
rule (69 FR 66954 through 66957) and the RY 2009 IPF PPS notice (73 FR 
25721). As with other adjustment factors derived through the regression 
analysis, we do not plan to propose updates to the teaching adjustment 
factors until we more fully analyze IPF PPS data. Therefore, in this FY 
2024 proposed rule, we propose to retain the coefficient value of 
0.5150 for the teaching adjustment to the Federal per diem base rate.
3. Proposed Cost of Living Adjustment (COLA) for IPFs Located in Alaska 
and Hawaii
    The IPF PPS includes a payment adjustment for IPFs located in 
Alaska and Hawaii based upon the area in which the IPF is located. As 
we explained in the November 2004 IPF PPS final rule, the FY 2002 data 
demonstrated that IPFs in Alaska and Hawaii had per diem costs that 
were disproportionately higher than other IPFs. Other Medicare 
prospective payment systems (for example, the IPPS and LTCH PPS) 
adopted a COLA to account for the cost differential of care furnished 
in Alaska and Hawaii.
    We analyzed the effect of applying a COLA to payments for IPFs 
located in Alaska and Hawaii. The results of our analysis demonstrated 
that a COLA for IPFs located in Alaska and Hawaii will improve payment 
equity for these facilities. As a result of this analysis, we provided 
a COLA in the November 2004 IPF PPS final rule.
    A COLA for IPFs located in Alaska and Hawaii is made by multiplying 
the non-labor-related portion of the Federal per diem base rate by the 
applicable COLA factor based on the COLA area in which the IPF is 
located.
    The COLA factors through 2009 were published by the Office of 
Personnel Management (OPM), and the OPM memo showing the 2009 COLA 
factors is available at https://www.chcoc.gov/content/nonforeign-area-retirement-equity-assurance-act.
    We note that the COLA areas for Alaska are not defined by county as 
are the COLA areas for Hawaii. In 5 CFR 591.207, the OPM established 
the following COLA areas:
     City of Anchorage, and 80-kilometer (50-mile) radius by 
road, as measured from the Federal courthouse.
     City of Fairbanks, and 80-kilometer (50-mile) radius by 
road, as measured from the Federal courthouse.
     City of Juneau, and 80-kilometer (50-mile) radius by road, 
as measured from the Federal courthouse.
     Rest of the State of Alaska.
    As stated in the November 2004 IPF PPS final rule, we update the 
COLA factors according to updates established by the OPM. However, 
sections 1911 through 1919 of the Non-foreign Area Retirement Equity 
Assurance Act, as contained in subtitle B of title XIX of the National 
Defense Authorization Act (NDAA) (Pub. L. 111-84, October 28, 2009), 
for FY 2010 transitions the Alaska and Hawaii COLAs to locality pay. 
Under section 1914 of NDAA, locality pay was phased in over a 3-year 
period beginning in January 2010, with COLA rates frozen as of the date 
of enactment, October 28, 2009, and then proportionately reduced to 
reflect the phase-in of locality pay.
    When we published the proposed COLA factors in the RY 2012 IPF PPS 
proposed rule (76 FR 4998), we inadvertently selected the FY 2010 COLA 
rates, which had been reduced to account for the phase-in of locality 
pay. We did not intend to propose the reduced COLA rates because that 
would have understated the adjustment. Since the 2009 COLA rates did 
not reflect the phase-in of locality pay, we finalized the FY 2009 COLA 
rates for RY 2010 through RY 2014.
    In the FY 2013 IPPS/LTCH final rule (77 FR 53700 through 53701), we 
established a new methodology to update the COLA factors for Alaska and 
Hawaii, and adopted this methodology for the IPF PPS in the FY 2015 IPF 
final rule (79 FR 45958 through 45960). We adopted this new COLA 
methodology for the IPF PPS because IPFs are hospitals with a similar 
mix of commodities and services. We believe it is appropriate to have a 
consistent policy approach with that of other hospitals in Alaska and 
Hawaii. Therefore, the IPF COLAs for FY 2015 through FY 2017 were the 
same as those applied under the IPPS in those years. As finalized in 
the FY 2013 IPPS/LTCH PPS final rule (77 FR 53700 and 53701), the COLA 
updates are determined every

[[Page 21265]]

4 years, when the IPPS market basket labor-related share is updated. 
Because the labor-related share of the IPPS market basket was updated 
for FY 2022, the COLA factors were updated in FY 2022 IPPS/LTCH 
rulemaking (86 FR 45547). As such, we also updated the IPF PPS COLA 
factors for FY 2022 (86 FR 42621 through 42622) to reflect the updated 
COLA factors finalized in the FY 2022 IPPS/LTCH rulemaking. Table 16 
shows the proposed IPF PPS COLA factors effective for FY 2022 through 
FY 2025.

  Table 16--IPF PPS Cost-of-Living-Adjustment Factors: IPFs Located in
                            Alaska and Hawaii
------------------------------------------------------------------------
                                                      FY 2022 through FY
                        Area                                 2025
------------------------------------------------------------------------
Alaska:
City of Anchorage and 80-kilometer (50-mile) radius                 1.22
 by road............................................
City of Fairbanks and 80-kilometer (50-mile) radius                 1.22
 by road............................................
City of Juneau and 80-kilometer (50-mile) radius by                 1.22
 road...............................................
Rest of Alaska......................................                1.24
Hawaii:
City and County of Honolulu.........................                1.25
County of Hawaii....................................                1.22
County of Kauai.....................................                1.25
County of Maui and County of Kalawao................                1.25
------------------------------------------------------------------------

    The proposed IPF PPS COLA factors for FY 2024 are also shown in 
Addendum A to this proposed rule, and is available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientPsychFacilPPS/tools.html.
4. Proposed Adjustment for IPFs With a Qualifying Emergency Department 
(ED)
    The IPF PPS includes a facility-level adjustment for IPFs with 
qualifying EDs. We provide an adjustment to the Federal per diem base 
rate to account for the costs associated with maintaining a full-
service ED. The adjustment is intended to account for ED costs incurred 
by a psychiatric hospital with a qualifying ED or an excluded 
psychiatric unit of an IPPS hospital or a CAH, for preadmission 
services otherwise payable under the Medicare Hospital Outpatient 
Prospective Payment System (OPPS), furnished to a beneficiary on the 
date of the beneficiary's admission to the hospital and during the day 
immediately preceding the date of admission to the IPF (see Sec.  
413.40(c)(2)), and the overhead cost of maintaining the ED. This 
payment is a facility-level adjustment that applies to all IPF 
admissions (with one exception, which we described), regardless of 
whether a particular patient receives preadmission services in the 
hospital's ED.
    The ED adjustment is incorporated into the variable per diem 
adjustment for the first day of each stay for IPFs with a qualifying 
ED. Those IPFs with a qualifying ED receive an adjustment factor of 
1.31 as the variable per diem adjustment for day 1 of each patient 
stay. If an IPF does not have a qualifying ED, it receives an 
adjustment factor of 1.19 as the variable per diem adjustment for day 1 
of each patient stay.
    The ED adjustment is made on every qualifying claim except as 
described in this section of this proposed rule. As specified in Sec.  
412.424(d)(1)(v)(B), the ED adjustment is not made when a patient is 
discharged from an IPPS hospital or CAH and admitted to the same IPPS 
hospital's or CAH's excluded psychiatric unit. We clarified in the 
November 2004 IPF PPS final rule (69 FR 66960) that an ED adjustment is 
not made in this case because the costs associated with ED services are 
reflected in the DRG payment to the IPPS hospital or through the 
reasonable cost payment made to the CAH.
    Therefore, when patients are discharged from an IPPS hospital or 
CAH and admitted to the same hospital's or CAH's excluded psychiatric 
unit, the IPF receives the 1.19 adjustment factor as the variable per 
diem adjustment for the first day of the patient's stay in the IPF. For 
FY 2024, we propose to retain the 1.31 adjustment factor for IPFs with 
qualifying EDs. A complete discussion of the steps involved in the 
calculation of the ED adjustment factors are in the November 2004 IPF 
PPS final rule (69 FR 66959 through 66960) and the RY 2007 IPF PPS 
final rule (71 FR 27070 through 27072).

E. Other Proposed Payment Adjustments and Policies

1. Outlier Payment Overview
    The IPF PPS includes an outlier adjustment to promote access to IPF 
care for those patients who require expensive care and to limit the 
financial risk of IPFs treating unusually costly patients. In the 
November 2004 IPF PPS final rule, we implemented regulations at Sec.  
412.424(d)(3)(i) to provide a per case payment for IPF stays that are 
extraordinarily costly. Providing additional payments to IPFs for 
extremely costly cases strongly improves the accuracy of the IPF PPS in 
determining resource costs at the patient and facility level. These 
additional payments reduce the financial losses that would otherwise be 
incurred in treating patients who require costlier care, and therefore, 
reduce the incentives for IPFs to under-serve these patients. We make 
outlier payments for discharges in which an IPF's estimated total cost 
for a case exceeds a fixed dollar loss threshold amount (multiplied by 
the IPF's facility-level adjustments) plus the Federal per diem payment 
amount for the case.
    In instances when the case qualifies for an outlier payment, we pay 
80 percent of the difference between the estimated cost for the case 
and the adjusted threshold amount for days 1 through 9 of the stay 
(consistent with the median LOS for IPFs in FY 2002), and 60 percent of 
the difference for day 10 and thereafter. The adjusted threshold amount 
is equal to the outlier threshold amount adjusted for wage area, 
teaching status, rural area, and the COLA adjustment (if applicable), 
plus the amount of the Medicare IPF payment for the case. We 
established the 80 percent and 60 percent loss sharing ratios because 
we were concerned that a single ratio established at 80 percent (like 
other Medicare PPSs) might provide an incentive under the IPF per diem 
payment system to increase LOS in order to receive additional payments.
    After establishing the loss sharing ratios, we determined the 
current fixed dollar loss threshold amount through payment simulations 
designed to compute a dollar loss beyond which payments are estimated 
to meet the 2

[[Page 21266]]

percent outlier spending target. Each year when we update the IPF PPS, 
we simulate payments using the latest available data to compute the 
fixed dollar loss threshold so that outlier payments represent 2 
percent of total estimated IPF PPS payments.
2. Proposed Update to the Outlier Fixed Dollar Loss Threshold Amount
    In accordance with the update methodology described in Sec.  
412.428(d), we propose to update the fixed dollar loss threshold amount 
used under the IPF PPS outlier policy. Based on the regression analysis 
and payment simulations used to develop the IPF PPS, we established a 2 
percent outlier policy, which strikes an appropriate balance between 
protecting IPFs from extraordinarily costly cases while ensuring the 
adequacy of the Federal per diem base rate for all other cases that are 
not outlier cases.
    Our longstanding methodology for updating the outlier fixed dollar 
loss threshold involves using the best available data, which is 
typically the most recent available data. For the FY 2022 IPF PPS final 
rule, we finalized the use of FY 2019 claims rather than the more 
recent FY 2020 claims for updating the outlier fixed dollar loss 
threshold (86 FR 42623). We noted that our use of the FY 2019 claims to 
set the final outlier fixed dollar loss threshold for FY 2022 deviated 
from our longstanding practice of using the most recent available year 
of claims, but remained otherwise consistent with the established 
outlier update methodology. We explained that we finalized our proposal 
to deviate from our longstanding practice of using the most recent 
available year of claims only because, and to the extent that, the 
``coronavirus disease 2019'' (abbreviated ``COVID-19'') Public Health 
Emergency (PHE) appeared to have significantly impacted the FY 2020 IPF 
claims. We further stated that we intended to continue to analyze 
further data in order to better understand both the short-term and 
long-term effects of the COVID-19 PHE on IPFs (86 FR 42624).
    In the FY 2023 IPF PPS final rule (87 FR 46862 through 46864) we 
noted that we observed an overall increase in average cost per day and 
an overall decrease in the number of covered days. However, we 
identified that some providers had significant increases in their 
charges, resulting in higher than normal estimated cost per day that 
would skew our estimate of outlier payments for FY 2022 and FY 2023. We 
finalized our proposal for FY 2023 to use the latest available FY 2021 
claims, in accordance with our longstanding practice, to simulate 
payments for determining the final FY 2023 IPF PPS outlier fixed dollar 
loss threshold amount. In addition, we finalized a methodology for FY 
2023 to exclude providers from our impact simulations whose change in 
simulated cost per day is outside 3 standard deviations from the mean.
    For this FY 2024 IPF PPS proposed rulemaking, consistent with our 
longstanding practice, we analyzed the most recent available data for 
simulating IPF PPS payments in FY 2023. Based on an analysis of these 
updated data, we estimate that IPF outlier payments as a percentage of 
total estimated payments are approximately 3.0 percent in FY 2023. We 
analyzed the change in providers' charges from the FY 2021 claims that 
were used to simulate payments for determining the final FY 2023 IPF 
PPS outlier threshold, and the latest available FY 2022 claims. In 
contrast to our analysis of FY 2021 claims for the FY 2023 IPF PPS 
proposed and final rules, we did not find the same level of significant 
increases in charges in the FY 2022 claims that we believe would skew 
our estimate of outlier payments for FY 2023 and FY 2024. Therefore, we 
propose to update the outlier threshold amount to $34,750. This would 
allow us to maintain estimated outlier payments at 2 percent of total 
estimated aggregate IPF payments for FY 2024. This proposed update is 
an increase from the FY 2023 threshold of $24,630. We are soliciting 
comments on this proposed increase to the outlier threshold for FY 
2024, and whether we should consider alternative methodologies for FY 
2024. Specifically, we are interested in understanding whether 
commenters believe it would be appropriate to exclude providers from 
our FY 2024 impact simulations whose change in simulated cost per day 
is outside 3 standard deviations from the mean, following the same 
methodology we applied in FY 2023. We note that our analysis for this 
FY 2024 proposed rule shows that the FY 2024 outlier fixed dollar loss 
threshold amount would be closer to $30,000 if we were to exclude 
providers based on the same methodology finalized for FY 2023. We are 
also interested in other methodologies that commenters believe might be 
appropriate to consider, including why commenters believe applying such 
a methodology would be appropriate for establishing the outlier 
threshold for FY 2024.
3. Proposed Update to IPF Cost-to-Charge Ratio Ceilings
    Under the IPF PPS, an outlier payment is made if an IPF's cost for 
a stay exceeds a fixed dollar loss threshold amount plus the IPF PPS 
amount. In order to establish an IPF's cost for a particular case, we 
multiply the IPF's reported charges on the discharge bill by its 
overall cost-to-charge ratio (CCR). This approach to determining an 
IPF's cost is consistent with the approach used under the IPPS and 
other PPSs. In the FY 2004 IPPS final rule (68 FR 34494), we 
implemented changes to the IPPS policy used to determine CCRs for IPPS 
hospitals, because we became aware that payment vulnerabilities 
resulted in inappropriate outlier payments. Under the IPPS, we 
established a statistical measure of accuracy for CCRs to ensure that 
aberrant CCR data did not result in inappropriate outlier payments.
    As indicated in the November 2004 IPF PPS final rule (69 FR 66961), 
we believe that the IPF outlier policy is susceptible to the same 
payment vulnerabilities as the IPPS; therefore, we adopted a method to 
ensure the statistical accuracy of CCRs under the IPF PPS. 
Specifically, we adopted the following procedure in the November 2004 
IPF PPS final rule:
     Calculated two national ceilings, one for IPFs located in 
rural areas and one for IPFs located in urban areas.
     Computed the ceilings by first calculating the national 
average and the standard deviation of the CCR for both urban and rural 
IPFs using the most recent CCRs entered in the most recent Provider 
Specific File (PSF) available.
    For FY 2024, we propose to continue to follow this methodology.
    To determine the rural and urban ceilings, we multiplied each of 
the standard deviations by 3 and added the result to the appropriate 
national CCR average (either rural or urban). The upper threshold CCR 
for IPFs in FY 2024 is 2.0801 for rural IPFs, and 1.7864 for urban 
IPFs, based on CBSA-based geographic designations. If an IPF's CCR is 
above the applicable ceiling, the ratio is considered statistically 
inaccurate, and we assign the appropriate national (either rural or 
urban) median CCR to the IPF.
    We apply the national median CCRs to the following situations:
     New IPFs that have not yet submitted their first Medicare 
cost report. We continue to use these national median CCRs until the 
facility's actual CCR can be computed using the first tentatively or 
final settled cost report.

[[Page 21267]]

     IPFs whose overall CCR is in excess of three standard 
deviations above the corresponding national geometric mean (that is, 
above the ceiling).
     Other IPFs for which the Medicare Administrative 
Contractor (MAC) obtains inaccurate or incomplete data with which to 
calculate a CCR.
    We propose to update the FY 2024 national median and ceiling CCRs 
for urban and rural IPFs based on the CCRs entered in the latest 
available IPF PPS PSF.
    Specifically, for FY 2024, to be used in each of the three 
situations listed previously, using the most recent CCRs entered in the 
CY 2022 PSF, we provide an estimated national median CCR of 0.5720 for 
rural IPFs and a national median CCR of 0.4200 for urban IPFs. These 
calculations are based on the IPF's location (either urban or rural) 
using the CBSA-based geographic designations. A complete discussion 
regarding the national median CCRs appears in the November 2004 IPF PPS 
final rule (69 FR 66961 through 66964).
4. Proposed Modification to the Regulation for Excluded Psychiatric 
Units Paid Under the IPF PPS
a. Background
    Under current regulation, in order to be excluded from the IPPS and 
paid under the IPF PPS or the IRF PPS, an IPF or IRF unit of a hospital 
must meet a number of requirements under 42 CFR 412.25. As discussed in 
the following paragraphs, both this regulation and the policies 
applying to excluded units (which include excluded IRF units and 
excluded IPF units) have been in effect since before both the IPF PPS 
and IRF PPS were established. Before the IRF PPS and the IPF PPS were 
established, excluded units were paid based on their costs, as reported 
on their Medicare cost reports, subject to certain facility-specific 
cost limits. These cost-based payments were determined separately for 
operating and capital costs. Thus, under cost-based payments, the 
process of allocating costs to an IPF unit for reimbursement created 
significant administrative complexity. This administrative complexity 
necessitated strict regulations that allowed hospitals to open a new 
IPPS-excluded unit only at the start of a cost reporting period.
    In the January 3, 1984 final rule (49 FR 235), CMS (then known as 
the Health Care Financing Administration) established policies and 
regulations for hospitals and units subject to and excluded from the 
IPPS. In that rule, we explained that section 1886(d) of the Act 
requires that the prospective payment system apply to inpatient 
hospital services furnished by all hospitals participating in the 
Medicare program except those hospitals or units specifically excluded 
by the law. We further explained our expectation that a hospital's 
status (that is, whether it is subject to, or excluded from, the 
prospective payment system) would generally be determined at the 
beginning of each cost reporting period. We also stated that this 
status would continue throughout the period, which is normally 1 year. 
Accordingly, we stated that changes in a hospital's (or unit's) status 
that result from meeting or failing to meet the criteria for exclusion 
would be implemented only at the start of a cost reporting period. 
However, we also acknowledged that under some circumstances involving 
factors external to the hospital, status changes could be made at times 
other than the beginning of the cost reporting period. For example, a 
change in status could occur if a hospital is first included under the 
prospective payment system and, after the start of its cost reporting 
period, is excluded because of its participation in an approved 
demonstration project or State reimbursement control program that 
begins after the hospital's cost reporting period has begun.
    In the 1993 IPPS final rule (57 FR 39798 through 39799), we 
codified our longstanding policies regarding when a hospital unit can 
change its status from not excluded to excluded. We explained in that 
final rule that since the inception of the PPS for operating costs of 
hospital inpatient services in October 1983, certain types of 
specialty-care hospitals and hospital units have been excluded from 
that system under section 1888(d)(1)(B) of the Act. We noted that these 
currently include psychiatric and rehabilitation hospitals and distinct 
part units, children's hospitals, and long-term care hospitals. We 
further explained that section 6004(a)(1) of Public Law 101-239 amended 
section 1886(d)(1)(B) of the Act to provide that certain cancer 
hospitals are also excluded. We noted that the preamble to the January 
3, 1984 final rule implementing the PPS for operating costs (49 FR 235) 
stated that the status of a hospital or unit (that is, whether it is 
subject to, or excluded from, the PPS) will be determined at the 
beginning of each cost reporting period. We noted that that same 1984 
final rule also provided that changes in a hospital's or unit's status 
that result from meeting or failing to meet the criteria for exclusion 
will be implemented prospectively only at the start of a cost reporting 
period, that is, starting with the beginning date of the next cost 
reporting period (49 FR 243). However, we noted that this policy was 
not set forth in the regulations. In that 1993 IPPS final rule, we 
stated that we proposed revising Sec. Sec.  412.22 and 412.25 to 
specify that changes in the status of each hospital or hospital unit 
would be recognized only at the start of a cost reporting period. We 
stated that, except in the case of retroactive payment adjustments for 
excluded rehabilitation units described in Sec.  412.30(c), any change 
in a hospital's or unit's compliance with the exclusion criteria that 
occurs after the start of a cost reporting period would not be taken 
into consideration until the start of the following period. We noted 
that this policy would also apply to any unit that is added to a 
hospital during the hospital's cost reporting period. We also stated 
that we proposed revising Sec.  412.25(a) to specify that as a 
requirement for exclusion, a hospital unit must be fully equipped and 
staffed, and be capable of providing inpatient psychiatric or 
rehabilitation care as of the first day of the first cost reporting 
period for which all other exclusion requirements are met. We explained 
that a unit that meets this requirement would be considered open 
regardless of whether there are any inpatients in the unit.
    In the same 1993 IPPS final rule, we responded to commenters who 
objected to this policy, stating that it unnecessarily penalizes 
hospitals for factors beyond their control, such as construction 
delays, that it discourages hospitals from making changes in their 
programs to meet community needs, or that it can place undue workload 
demands on regulatory agencies during certain time periods. In 
response, we explained that we believed that regulatory agencies, 
hospitals, and the public generally would benefit from policies that 
are clearly stated, can be easily understood by both hospitals and 
intermediaries, and can be simply administered. We stated that 
recognizing changes in status only at the beginning of cost reporting 
periods is consistent with these goals, while recognizing changes in 
the middle of cost reporting periods would introduce added complexity 
to the administration of the exclusion provisions. Therefore, we did 
not revise the proposed changes based on these comments.
    In the FY 2000 IPPS final rule (64 FR 41531 through 41532), we 
amended the regulations at Sec.  412.25(c) to allow a hospital unit to 
change from excluded to not excluded at any time during the cost 
reporting period. We explained the statutory basis and rationale for 
this change in the FY 2000 IPPS proposed rule (64 FR 24740), and noted 
that a

[[Page 21268]]

number of hospitals suggested that we consider a change in our policy 
to recognize, for purposes of exclusion from the IPPS, reductions in 
number of beds in, or entire closure of, units at any time during a 
cost reporting period. In that FY 2000 IPPS proposed rule, we explained 
that hospitals indicated that the bed capacity made available as a 
result of these changes could be used as needed to provide additional 
services to meet patient needs in the acute care part of the hospital 
that is paid under the IPPS. We further explained that we evaluated the 
concerns of the hospitals and the effects on the administration of the 
Medicare program and the health care of beneficiaries of making these 
payment changes. As a result of that evaluation, we stated that we 
believed it was reasonable to adopt a more flexible policy in 
recognition of hospitals' changes in the use of their facilities. 
However, we noted that whenever a hospital establishes an excluded unit 
within the hospital, our Medicare fiscal intermediary would need to be 
able to determine costs of the unit separately from costs of the part 
of the hospital paid under the prospective payment system. At that 
time, we stated that the proper determination of costs ensured that the 
hospital was paid the correct amount for services in each part of the 
facility, and that payments under the IPPS did not duplicate payments 
made under the rules that were applicable to excluded hospitals and 
units, or vice versa. For this reason, we did not believe it would be 
appropriate to recognize, for purposes of exclusion from the IPPS, 
changes in the bed size or status of an excluded unit that are so 
frequent that they interfere with the ability of the intermediary to 
accurately determine costs. Moreover, we explained that section 
1886(d)(1)(B) of the Act authorizes exclusion from the IPPS of specific 
types of hospitals and units, but not of specific admissions or stays, 
such as admissions for rehabilitation or psychiatric care, in a 
hospital paid under the IPPS. We stated that without limits on the 
frequency of changes in excluded units for purposes of proper Medicare 
payment, there was the potential for some hospitals to adjust the 
status or size of their excluded units so frequently that the units 
would no longer be distinct entities and the exclusion would 
effectively apply only to certain types of care.
    In the FY 2012 IRF PPS final rule (76 FR 47870), we began further 
efforts to increase flexibilities for excluded IPF and IRF units. In 
that rule, we explained that cost-based reimbursement methodologies 
that were in place before the IPF PPS and IRF PPS meant that the 
facilities' capital costs were determined, in part, by their bed size 
and square footage. Changes in the bed size and square footage would 
complicate the facilities' capital cost allocation. Thus, regulations 
at Sec.  412.25 limited the situations under which an IRF or IPF could 
change its bed size and square footage. In the FY 2012 IRF PPS final 
rule, we revised Sec.  412.25(b) to enable IRFs and IPFs to more easily 
adjust to beneficiary changes in demand for IRF or IPF services, and 
improve beneficiary access to these services. We believed that the 
first requirement (that beds can only be added at the start of a cost 
reporting period) was difficult, and potentially costly, for IRFs and 
IPFs that were expanding through new construction because the exact 
timing of the end of a construction project is often difficult to 
predict. In that same FY 2012 IRF PPS final rule, commenters suggested 
that CMS allow new IRF units or new IPF units to open and begin being 
paid under their respective IRF PPS or IPF PPS at any time during a 
cost reporting period, rather than requiring that they could only begin 
being paid under the IRF PPS or the IPF PPS at the start of a cost 
reporting period. We believed that this suggestion was outside the 
scope of the FY 2012 IRF PPS proposed rule (76 FR 24214) because we did 
not propose any changes to the Sec.  412.25(c). However, we stated that 
we would consider this suggestion for possible inclusion in future 
rulemaking.
b. Current Challenges Related to Excluded Hospital Units (Sec. Sec.  
412.25(c)(1) and (c)(2))
    Currently, under Sec.  412.25(c)(1), a hospital can only start 
being paid under the IPF PPS or the IRF PPS for services provided in an 
excluded hospital unit at the start of a cost reporting period. 
Specifically, Sec.  412.25(c) limits when the status of hospital units 
may change for purposes of exclusion from the IPPS, as specified in 
Sec.  412.25(c)(1) and Sec.  412.25(c)(2). Section 412.25(c)(1) states 
that the status of a hospital unit may be changed from not excluded to 
excluded only at the start of the cost reporting period. If a unit is 
added to a hospital after the start of a cost reporting period, it 
cannot be excluded from the IPPS before the start of a hospital's next 
cost reporting period. Section 412.25(c)(2) states the status of a 
hospital unit may be changed from excluded to not excluded at any time 
during a cost reporting period, but only if the hospital notifies the 
fiscal intermediary and the CMS Regional Office in writing of the 
change at least 30 days before the date of the change, and maintains 
the information needed to accurately determine costs that are or are 
not attributable to the excluded unit. A change in the status of a unit 
from excluded to not excluded that is made during a cost reporting 
period must remain in effect for the rest of that cost reporting 
period.
    In recent years, interested parties, such as hospitals, have 
written CMS to express concerns about what they see as the unnecessary 
restrictiveness of the requirements at Sec.  412.25(c). Based on this 
feedback, we continued to explore opportunities to reduce burden for 
providers and clinicians, while keeping patient-centered care a 
priority. For instance, we considered whether this regulation might 
create unnecessary burden for hospitals and potentially delay necessary 
psychiatric beds from opening and being paid under the IPF PPS. As we 
continued to review and reconsider regulations to identify ways to 
improve policy, we recognized that the requirement at Sec.  
412.25(c)(1), that hospital units can only be excluded at the start of 
a cost reporting period, may be challenging and potentially costly for 
facilities under some circumstances, for example, those that are 
expanding through new construction. Hospitals have indicated it is 
often difficult to predict the exact timing of the end of a 
construction project and construction delays may hamper a hospital's 
ability to have the construction of an excluded unit completed exactly 
at the start of a cost reporting period, which hospitals have said can 
lead to significant revenue loss if they are unable to be paid under 
the IPF PPS or IRF PPS until the start of the next cost reporting 
period.
    As previously stated, the requirements at Sec.  412.25(c) were 
established to manage the administrative complexity associated with 
cost-based reimbursement for excluded IPF and IRF units. Today, 
however, because IPF units are paid under the IPF PPS and IRF units are 
paid under the IRF PPS, cost allocation is not used for payment 
purposes. Because advancements in technology since the inception of the 
IPF PPS and IRF PPS have simplified the cost reporting process and 
enhanced communication between providers, Medicare contractors, and 
CMS, we are reconsidering whether it is necessary to continue to allow 
hospital units to become excluded only at the start of a cost reporting 
period.

[[Page 21269]]

c. Proposed Changes to Excluded Hospital Units (Sec. Sec.  412.25(c)(1) 
and (c)(2))
    We are committed to continuing to transform the health care 
delivery system and the Medicare program by putting additional focus on 
patient-centered care and working with providers, physicians, and 
patients to improve outcomes, while meeting relevant health care 
priorities and explore burden reduction.
    In response to increased mental health needs, including the need 
for availability of inpatient psychiatric beds, we propose changes to 
Sec.  412.25(c) to allow greater flexibility for hospitals to open 
excluded units, while minimizing the amount of effort Medicare 
contractors would need to spend administering the regulatory 
requirements. Although we are cognizant that there is need for mental 
health services and support for providers along a continuum of care, 
including a robust investment in community-based mental health 
services, this propose rule is focused on inpatient psychiatric 
facility settings.
    We note that Sec.  412.25(c) applies to both IPFs and IRFs; 
therefore, revisions to Sec.  412.25(c) would also affect IRFs in 
similar ways. Readers should refer to the FY 2024 IRF PPS proposed rule 
for discussion of proposed revisions to Sec.  412.25(c) and unique 
considerations applicable to IRF units. As previously stated the 
current requirements at Sec.  412.25(c)(1) were originally established 
to manage the administrative complexity associated with cost-based 
reimbursement for excluded IPF and IRF units. Because IPF and IRF units 
are no longer paid under cost-based reimbursement, but rather under the 
IPF PPS and IRF PPS respectively, we believe that the restriction that 
limits an IPF or IRF unit to being excluded only at the start of a cost 
reporting period is no longer necessary. We amended our regulations in 
the FY 2012 IRF PPS final rule to address a regulation that, similarly, 
was previously necessary for cost-based reimbursement, but was not 
material to payment under the IRF PPS and IPF PPS. In that final rule, 
we explained that under cost-based payments, the facilities' capital 
costs were determined, in part, by their bed size and square footage. 
Changes in the bed size and square footage would complicate the 
facilities' capital cost allocation. We explained that under the IRF 
PPS and IPF PPS, a facility's bed size and square footage were not 
relevant for determining the individual facility's Medicare payment. 
Therefore, we believed it was appropriate to modify some of the 
restrictions on a facility's ability to change its bed size and square 
footage. Accordingly, we relaxed the restrictions on a facility's 
ability to increase its bed size and square footage. Under the revised 
requirements that we adopted in the FY 2012 IRF PPS final rule at Sec.  
412.25(b), an IRF or IPF can change (either increase or decrease) its 
bed size or square footage one time at any point in a given cost 
reporting period as long as it notifies the CMS Regional Office (RO) at 
least 30 days before the date of the proposed change, and maintains the 
information needed to accurately determine costs that are attributable 
to the excluded units.
    Similarly, in the case of the establishment of new excluded IPF and 
IRF units, we do not believe that the timing of the establishment of 
the new unit is material for determining the individual facility's 
Medicare payment under the IPF PPS or IRF PPS. We believe it would be 
appropriate to allow a unit to become excluded at any time in the cost 
reporting year. However, we also believe it is important to minimize 
the potential administrative complexity associated with units changing 
their excluded status.
    Accordingly, we propose to modify the requirements currently in 
regulation at Sec.  412.25(c)(1) to allow a hospital to open a new IPF 
unit any time within the cost reporting year, as long as the hospital 
notifies the CMS Regional Office and Medicare Administrative Contractor 
(MAC) in writing of the change at least 30 days before the date of the 
change. Additionally, we propose that if a unit becomes excluded during 
a cost reporting year, the hospital must notify the MAC and CMS 
Regional Office in writing of the change at least 30 days before the 
change, and this change would remain in effect for the rest of that 
cost reporting year. We also propose to maintain the current 
requirements of Sec.  412.25(c)(2) which specify that, if an excluded 
unit becomes not excluded during a cost reporting year, the hospital 
must notify the MAC and CMS Regional Office in writing of the change at 
least 30 days before the change, and this change would remain in effect 
for the rest of that cost reporting year. Finally, we propose to 
consolidate the requirements for Sec.  412.25(c)(1) and Sec.  
412.25(c)(2) into a new Sec.  412.25(c)(2) that would apply to IPF 
units and specify the requirements for an IPF unit to become excluded 
or not excluded. We believe this proposal would provide greater 
flexibility to hospitals to establish an excluded unit at a time other 
than the start of a cost reporting period. We welcome comments on this 
proposed change.
    As noted above, we propose an identical policy for rehabilitation 
units of hospitals in the FY 2024 IRF PPS proposed rule. The regulatory 
provision that would pertain to IRF units would appear in Sec.  
412.25(c)(1). We propose discrete regulations text for each of the 
hospital unit types (that is, IRF units and IPF units) in order to 
solicit comments on issues that might impact one hospital unit type and 
not the other. However, we may consider adopting one consolidated 
regulations text for both IRF and IPF units in the final rules if we 
finalize both of our proposals. We solicit public comments on 
finalizing a consolidated provision that would pertain to both IRF and 
IPF units.

IV. Existing Data Collection and Request for Information (RFI) To 
Inform Revisions to the IPF PPS as Required by the CAA, 2023

A. Changes to IPF PPS in the CAA, 2023

    As discussed in section III.C.1 of this proposed rule, we propose 
to continue using the existing regression-derived IPF PPS adjustment 
factors for FY 2024. In the FY 2023 IPF PPS proposed rule (87 FR 19428 
through 19429), we discussed the background of these current IPF PPS 
patient-level and facility-level adjustment factors, which are the 
regression-derived adjustment factors from the November 15, 2004 IPF 
PPS final rule and briefly discussed past analyses and areas of concern 
for future refinement, about which we previously solicited comments. 
Finally, in the FY 2023 proposed rule, we described the results of the 
latest analysis of the IPF PPS, which were summarized in a technical 
report posted to the CMS website \2\ accompanying the rule, and 
solicited comments on certain topics from the report.
---------------------------------------------------------------------------

    \2\ https://www.cms.gov/files/document/technical-report-medicare-program-inpatient-psychiatric-facilities-prospective-payment-system.pdf.
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    Section 4125 of the CAA, 2023 amended section 1886(s) of the Act to 
add new paragraph 1886(s)(5), which requires revisions to the 
methodology for determining the payment rates under the IPF PPS for FY 
2025 and future years as the Secretary determines appropriate. 
Specifically, new section 1886(s)(5)(A) of the Act requires the 
Secretary to collect data and information as the Secretary as 
determines appropriate to revise payments under the IPF PPS. This data 
collection is required to begin no later than October 1, 2023, which is 
the start of FY 2024. In addition, new section 1886(s)(5)(D) of the Act 
requires that the

[[Page 21270]]

Secretary implement by regulation revisions to the methodology for 
determining the payment rates for psychiatric hospitals and psychiatric 
units (that is, under the IPF PPS), for rate year 2025 (FY 2025) and 
for subsequent years if the Secretary determines it appropriate. The 
revisions may be based on a review of the data and information 
collection.
    As noted above, section 1886(s)(5)(A) of the Act requires the 
Secretary to begin collecting, by not later than October 1, 2023, data 
and information as appropriate to inform revisions to the IPF PPS. New 
section 1886(s)(5)(B) of the Act, as added by the CAA, 2023 lists the 
following types of data and information as a non-exhaustive list of 
examples of what may be collected under this authority:
     Charges, including those related to ancillary services;
     The required intensity of behavioral monitoring, such as 
cognitive deficit, suicidal ideations, violent behavior, and need for 
physical restraint; and
     Interventions, such as detoxification services for 
substance abuse, dependence on respirator, total parenteral nutritional 
support, dependence on renal dialysis, and burn care.
    We note that our extensive years-long and ongoing data collection 
efforts are consistent with the types of data the CAA, 2023 suggests we 
might collect as well as the purpose for which the CAA, 2023 requires 
the data collection, as described in the following paragraphs.

B. Current Data and Information Collection Requirements

1. Charges, Including Those Related to Ancillary Services
    As specified at 42 CFR 413.20, hospitals are required to file cost 
reports on an annual basis, and maintain sufficient financial records 
and statistical data for proper determination of costs payable under 
the Medicare program. Currently, IPFs and psychiatric units are 
required to report ancillary charges on cost reports.
    In general, most providers allocate their Medicare costs using 
costs and charges as described at 42 CFR 413.53(a)(1)(i) and referred 
to as the Departmental Method. For cost reporting periods beginning on 
or after October 1, 1982, the Departmental Method, which is the ratio 
of beneficiary charges to total patient charges for the services of 
each ancillary department, is applied to apportion the cost of the 
department. Added to this amount is the cost of routine services for 
program beneficiaries, determined on the basis of a separate average 
cost per diem for all patients for general routine patient care areas 
as required at Sec.  413.53(a)(1)(i) and (e).
    The Departmental Method for apportioning allowable cost between 
Medicare and non-Medicare patients under the program is not readily 
adaptable to those hospitals that do not have a charge structure. 
Current cost reporting rules allow hospitals that do not have a charge 
structure to file an all-inclusive cost report using an alternative 
cost allocation method. These alternative methods as described in the 
CMS Pub. 15-1, chapter 22 of the Provider Reimbursement Manual (PRM), 
Methods A, B and E, in order of preference, must be approved by the MAC 
after considering the data available and ascertaining which method can 
be applied to achieve equity, not merely greater reimbursement, in the 
allocation of costs for services rendered to Medicare beneficiaries.
    Method A (Departmental Statistical Method) is used in the absence 
of charge data and where adequate departmental statistics are 
available. Where Method A was not used, the MAC may have granted 
specific permission for a hospital to continue to use on a temporary 
basis a less sophisticated Method B (Sliding Scale) or E (Percentage of 
Per Diem). A provider that elects and is approved under Method A, may 
not change to a Method B or E in a subsequent year. These alternative 
methods of apportionment are limited and available only to those 
hospitals that do not and never have had a charge structure for 
individual services rendered. Historically, most hospitals that were 
approved to file all-inclusive cost reports were Indian Health Services 
hospitals, government-owned psychiatric and acute care hospitals, and 
nominal charge hospitals.
    In the FY 2016 IPF PPS final rule (80 FR 46693 through 46694), we 
discussed analysis conducted to better understand IPF industry 
practices for future IPF PPS refinements. This analysis revealed that 
in 2012 to 2013, over 20 percent of IPF stays show no reported 
ancillary costs, such as laboratory and drug costs, on cost reports or 
charges on claims. In the FY 2016 IPF PPS final rule (80 FR 46694), FY 
2017 IPF PPS final rule (81 FR 50513), FY 2018 IPF PPS final rule (82 
FR 36784), FY 2019 IPF PPS final rule (83 FR 38588) and FY 2020 IPF PPS 
final rule (84 FR 38458), we reminded providers that we pay only the 
IPF for services furnished to a Medicare beneficiary who is an 
inpatient of that IPF, except for certain professional services, and 
payments are considered to be payments in full for all inpatient 
hospital services provided directly or under arrangement (see 42 CFR 
412.404(d)), as specified in 42 CFR 409.10.
    On November 17, 2017, we issued Transmittal 12, which made changes 
to the hospital cost report form CMS-2552-10 (OMB No. 0938-0050), and 
included cost report Level I edit 10710S, effective for cost reporting 
periods ending on or after August 31, 2017. Edit 10710S required that 
cost reports from psychiatric hospitals include certain ancillary 
costs, or the cost report will be rejected. On January 30, 2018, we 
issued Transmittal 13, which changed the implementation date for 
Transmittal 12 to be for cost reporting periods ending on or after 
September 30, 2017. CMS suspended edit 10710S effective April 27, 2018, 
pending evaluation of the application of the edit to all-inclusive-rate 
providers. CMS issued Transmittal 15 on October 19, 2018, reinstating 
the requirement that cost reports from psychiatric hospitals, except 
all-inclusive rate providers, include certain ancillary costs. For 
details, we refer readers to see these Transmittals, which are 
available on the CMS website at https://www.cms.gov/regulations-and-guidance/guidance/transmittals.
2. Required Intensity of Behavioral Monitoring and Interventions
    As discussed in the November 2004 IPF PPS final rule (69 FR 66946), 
we encourage IPFs to code all diagnoses requiring active treatment 
during the IPF stay. These include ICD-10-CM codes that indicate the 
required intensity of behavioral monitoring, such as cognitive deficit, 
suicidal ideations, violent behavior, and need for physical restraint. 
The IPF PPS includes comorbidity and MS-DRG adjustment factors that 
increase IPF PPS payment for stays that include these codes. For 
example, ICD-10-CM codes X71 through X83 indicate self-harm. ICD-10-CM 
codes under R45 indicate emotional state including violent behavior. 
These and other ICD-10-CM codes indicate the required intensity of 
behavioral monitoring and should be reported on the IPF claims, if 
applicable.
    The presence of certain ICD-10-CM codes as a principal or comorbid 
condition is used to adjust IPF PPS payments to reflect the resource 
intensity associated with these conditions. For example, codes that 
group to MS-DRG 884 Organic Disturbances & Intellectual Disabilities, 
and codes that are included in the IPF comorbidity category for 
Developmental Disabilities, result in increased payment

[[Page 21271]]

for IPF stays for patients with cognitive deficit.
    As we further discussed in the November 2004 IPF PPS final rule (69 
FR 66938 through 66944), we developed comorbidity categories based on 
the clinical expertise of physicians to identify conditions that would 
require comparatively more costly treatment during an IPF stay than 
other comorbid conditions. We used a regression analysis of 
administrative claims and cost report data to determine the adjustment 
factors associated with each comorbidity category. In addition, we used 
the same regression analysis to determine the adjustment factors 
associated with the 17 MS-DRGs that are included for payment 
adjustments under the IPF PPS (as identified in Addendum A). As 
discussed in section III.C.2.b of this proposed rule, we routinely 
update the ICD-10-CM codes that are included in the MS-DRGs and 
comorbidity categories.
    We also collect relevant demographic information such as patient 
age, and we collect information and adjust payment based on the length 
of IPF stays. Each of these adjustments reflects the difference in 
service intensity, as measured by increased or decreased costs, for 
different patients over the course of an IPF stay.
    In addition, IPFs and psychiatric units report on claims the ICD-
10-PCS codes for interventions including oncology treatment procedures, 
which is used for adjusting payment under the oncology comorbidity 
category, and ECT, which is paid for using a per treatment amount as 
discussed in section III.B.2 of this FY 2024 IPF PPS proposed rule. 
Other ICD-10-CM diagnosis codes indicate the need for certain 
interventions, such as detoxification services or substance abuse (for 
example, F10.121, which is included in the drug and alcohol abuse 
comorbidity category), dependence on respirator (for example, Z99.11 
included in the COPD category), and dependence on renal dialysis (for 
example, Z99.2 included in the chronic renal failure category). We note 
that the IPS PPF does not currently adjust for burn care, but recognize 
there are ICD-10-CM/PCS codes that denote conditions and procedures 
related to burn care. As discussed in the previous paragraph, the IPF 
PPS includes comorbidity adjustments that reflect the higher relative 
costs for active treatment of these conditions. IPF patients with these 
conditions are costlier to treat primarily because of the costs 
associated with interventions and longer lengths of stay.
3. Request for Information on Data and Information Collection
    As noted in section IV.A of this proposed rule, our extensive 
years-long and ongoing data collection efforts are consistent with the 
types of data that the CAA, 2023 suggests we might collect, as well as 
aligns with the purpose for which the CAA, 2023 requires the data 
collection. In this proposed rule, we are requesting information from 
the public to inform revisions to the IPF PPS required by section 
4125(a) of the CAA, 2023. We are seeking information about specific 
additional data and information psychiatric hospitals and psychiatric 
units might report that could be appropriate and useful to help inform 
possible revisions to the methodology for payment rates under the IPF 
PPS for FY 2025 and future years if determined appropriate by the 
Secretary.
    Section 1886(s)(5)(C) of the Act provides that the Secretary may 
collect additional data and information on cost reports, claims, or 
otherwise. Therefore, we are also seeking information about potential 
available data and information sources, including using additional 
elements of the current cost reports, claims, or other sources, taking 
into consideration factors such as the timing and availability of data, 
the quality of the potential data and information to be collected, and 
the potential administrative burden on providers, MACs, and CMS.
    We are seeking comment on the following topics:
     What other data and information would be beneficial for 
informing revisions to the IPF PPS payment methodologies that are 
currently obtainable through claims or cost report information? What 
codes, conditions, or other indicators should we examine in order to 
potentially identify this data from existing sources?
     What other data and information would be beneficial for 
informing revisions to the IPF PPS payment methodologies that are not 
routinely coded on claims or identifiable through cost report 
information? What are some potential alternative sources we could 
consider for collecting these data and information?
     What data and information that is currently reported on 
claims data could be used to inform revisions to the IPF PPS payment 
methodologies?
     As we discussed earlier in this FY 2024 IPF PPS proposed 
rule, the current IPF PPS payment adjustments were derived from a 
regression analysis based on the FY 2002 MedPAR data file. The 
adjustment factors included for payment were found in the regression 
analysis to be associated with statistically significant per diem cost 
differences; with statistical significance defined as p less than 0.05. 
Are there alternative methodological approaches or considerations that 
we should consider for future analysis?
     What if any additional data or information should we 
consider collecting that could address access to care in rural and 
isolated communities?
4. Request for Information About Charges for Ancillary Services
    In conjunction with the FY 2023 IPF PPS proposed rule (87 FR 19428 
through 19429), we posted a report on the CMS website that summarizes 
the results of the latest analysis of more recent IPF cost and claim 
information for potential IPF PPS adjustments, and requested comments 
about the results summarized in the report. That report showed that 
approximately 23 percent of IPF stays were trimmed from the data set 
used in that analysis because they were stays at facilities where fewer 
than 5 percent of their stays had ancillary charges. This report is 
available online at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientPsychFacilPPS.
    In response to the comment solicitation, we received a comment from 
MedPAC regarding facilities that do not report ancillary charges on 
most or any of their claims. Ancillary services are the services for 
which charges are customarily made in addition to routine services. 
These include services such as labs, drugs, radiology, physical and 
occupational therapy services, and other types of services that 
typically vary between stays. Generally, based on the nature of IPF 
services and the conditions of participation \3\ applicable to IPFs, we 
expect to see ancillary services and correlating charges, such as labs 
and drugs, on most IPF claims. Our ongoing analysis has found that 
certain providers, especially for-profit freestanding IPFs, are 
consistently reporting no ancillary charges or very minimal ancillary 
charges. MedPAC stated that it is not known: whether IPFs fail to 
report ancillary charges separately because they were appropriately 
bundled with all other charges into an all-inclusive per diem rate; if 
no ancillary charges were incurred because the IPF cares for a

[[Page 21272]]

patient mix with lower care needs or inappropriately stints on care; or 
if ancillary charges for services furnished during the IPF stay are 
inappropriately billed outside of the IPF base rate (unbundling). 
MedPAC recommended CMS conduct further investigation into the lack of 
certain ancillary costs and charges and whether IPFs are providing 
necessary care and appropriately billing for inpatient psychiatric 
services under the IPF PPS.
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    \3\ IPFs are subject to all hospital conditions of 
participation, including 42 CFR 482.25, which specifies that ``The 
hospital must have pharmaceutical services that meet the needs of 
the patients,'' and 482.27, which specifies that ``The hospital must 
maintain, or have available, adequate laboratory services to meet 
the needs of its patients.''
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    As discussed in the previous section of this FY 2024 IPF PPS 
proposed rule, we are requesting information related to the specific 
types of data and information specified in the CAA, 2023, including the 
reporting of charges for ancillary services, such as labs and drugs, on 
IPF claims. We are interested in better understanding IPF industry 
practices pertaining to the billing and provision of ancillary services 
to inform future IPF PPS refinements. We are considering whether to 
require charges for ancillary services to be reported on claims and 
potentially reject claims if no ancillary services are reported, and 
whether to consider payment for such claims to be inappropriate or 
erroneous and subject to recoupment. Accordingly, we are soliciting 
comments on the following questions:
     What would be the appropriate level of ancillary charges 
CMS should expect to be reported on claims? Are there specific reasons 
that an IPF stay would include no ancillary services?
     What are the reasons that some providers are not reporting 
ancillary charges on their claims?
     Would it be appropriate for CMS to require and reject 
claims if there are no ancillary charges reported? Or should CMS 
consider adjusting payment toto providers that do not report ancillary 
charges on their claims? For example, does the lack of ancillary 
charges on claims suggest a lack of reasonable and necessary treatment 
during the IPF stay, and would it be appropriate for CMS to only apply 
the IPF PPS patient-level adjustment factors for claims that include 
ancillary charges?

C. Social Drivers of Health

    Social drivers of health (SDOH), also known as social determinants 
of health, are the conditions in the environments where people are 
born, live, learn, work, play, worship, and age that affect a wide 
range of health, functioning, and quality-of-life outcomes and 
risks.\4\ Studies have shown that there is a correlation between the 
effects of low income and education and overall health status. One 
study derived that the lowest income and least educated individuals 
were consistently least healthy.\5\ We have previously demonstrated our 
commitment to advancing health equity and reducing health disparities. 
In the past, and in our ongoing efforts, we have strived to identify 
and implement policies, procedures, reporting protocols, and other 
initiatives in a number of our programs that address the impact of SDOH 
on an individual's health.
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    \4\ https://health.gov/healthypeople/priority-areas/social-determinants-health.
    \5\ Paula A. Braveman, Catherine Cubbin, Susan Egerter, David R. 
Williams, and Elsie Pamuk, 2010: Socioeconomic Disparities in Health 
in the United States: What the Patterns Tell Us American Journal of 
Public Health 100, S186_S196, https://doi.org/10.2105/AJPH.2009.166082.
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    For the IPF Quality Reporting Program, as discussed in section V.D 
below of this proposed rule, we propose to adopt the Facility 
Commitment to Health Equity measure for the FY 2026 payment 
determination and subsequent years, the Screening for Social Drivers of 
Health measure beginning with voluntary reporting of data beginning in 
CY 2025 with required reporting for the FY 2027 payment determination 
and subsequent years, and the Screen Positive Rate for Social Drivers 
of Health measure beginning with voluntary reporting of data beginning 
in CY 2024 with required reporting for the FY 2027 payment 
determination and subsequent years.
    Additionally, in the technical report \6\ accompanying the FY 2023 
IPF PPS proposed rule, we explained that we analyzed the costs 
associated with SDOH, but found that our analysis was confounded by a 
low frequency of IPF claims reporting the applicable ICD-10 diagnosis 
codes. In response to the FY 2023 IPF PPS proposed rule we received 10 
comments pertaining to the report on the analysis of patient-level and 
facility-level adjustment factors, and areas of interest for further 
research, including additional SDOH analysis.
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    \6\ https://www.cms.gov/files/document/technical-report-medicare-program-inpatient-psychiatric-facilities-prospective-payment-system.pdf.
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    Working in collaboration with a contractor, subsequent analysis has 
shown that other SDOH codes, such as Z59.9 Problem related to housing 
and economic circumstances, unspecified, are associated with 
statistically significant, higher costs. In general, our analysis found 
that claims that included SDOH codes had lower costs than claims that 
did not include such codes. This finding is counterintuitive; however, 
we note that studies have found that there are disparities in the 
reporting of SDOH codes, such as homelessness.\7\ Additionally, our 
analysis found that certain codes were associated with increased cost 
for IPF treatment. Specifically, the below SDOH codes in the analysis 
were found to be statistically significant and had a stay count of 
greater than 100. These codes had an adjustment factor above 1, 
suggesting that these conditions may increase relative costliness of 
IPF stays:
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    \7\ https://aspe.hhs.gov/reports/health-conditions-among-individuals-history-homelessness-research-brief-0.
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     Z559 Problems related to education and literacy, 
unspecified.
     Z599 Problems related to housing and economic 
circumstances, unspecified.
     Z600 Problems of adjustment to life-cycle transitions.
     Z634 Disappearance and death of family member.
     Z653 Problems related to other legal circumstances.
     Z659 Problems related to unspecified psychosocial 
circumstances.
    We are seeking comments on these findings and information about 
whether it would be appropriate to consider incorporating these codes 
into the IPF PPS in the future, for example as a patient-level 
adjustment. Specifically, for codes that are ``unspecified,'' we are 
seeking information about what types of conditions or circumstances 
these codes might represent. We are seeking any information that 
commenters can provide about the reasons for including these codes on 
claims. What factors do commenters believe we should consider in order 
to better understand the cost regression results presented above?

V. Inpatient Psychiatric Facilities Quality Reporting (IPFQR) Program

A. Background and Statutory Authority

    The Inpatient Psychiatric Facility Quality Reporting (IPFQR) 
Program is authorized by section 1886(s)(4) of the Act, and it applies 
to psychiatric hospitals and psychiatric units paid by Medicare under 
the IPF PPS (see section V.B. of this proposed rule). Section 
1886(s)(4)(A)(i) of the Act requires the Secretary to reduce by 2 
percentage points the annual update to the standard Federal rate for 
discharges for the IPF occurring during such fiscal year \8\ for

[[Page 21273]]

any IPF that does not comply with quality data submission requirements 
under the IPFQR Program, set forth in accordance with section 
1886(s)(4)(C) of the Act, with respect to an applicable fiscal year.
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    \8\ We note that the statute uses the term ``rate year'' (RY). 
However, beginning with the annual update of the inpatient 
psychiatric facility prospective payment system (IPF PPS) that took 
effect on July 1, 2011 (RY 2012), we aligned the IPF PPS update with 
the annual update of the ICD codes, effective on October 1 of each 
year. This change allowed for annual payment updates and the ICD 
coding update to occur on the same schedule and appear in the same 
Federal Register document, promoting administrative efficiency. To 
reflect the change to the annual payment rate update cycle, we 
revised the regulations at 42 CFR 412.402 to specify that, beginning 
October 1, 2012, the IPF PPS RY means the 12-month period from 
October 1 through September 30, which we refer to as a ``fiscal 
year'' (FY) (76 FR 26435). Therefore, with respect to the IPFQR 
Program, the terms ``rate year,'' as used in the statute, and 
``fiscal year'' as used in the regulation, both refer to the period 
from October 1 through September 30. For more information regarding 
this terminology change, we refer readers to section III of the RY 
2012 IPF PPS final rule (76 FR 26434 through 26435).
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    Section 1886(s)(4)(C) of the Act requires IPFs to submit to the 
Secretary data on quality measures specified by the Secretary under 
section 1886(s)(4)(D) of the Act. Except as provided in section 
1886(s)(4)(D)(ii) of the Act, section 1886(s)(4)(D)(i) of the Act 
requires that any measure specified by the Secretary must have been 
endorsed by the consensus-based entity (CBE) with a contract under 
section 1890(a) of the Act. Section 1886(s)(4)(D)(ii) of the Act 
provides that, in the case of a specified area or medical topic 
determined appropriate by the Secretary for which a feasible and 
practical measure has not been endorsed by the CBE with a contract 
under section 1890(a) of the Act, the Secretary may specify a measure 
that is not endorsed as long as due consideration is given to measures 
that have been endorsed or adopted by a consensus organization 
identified by the Secretary.
    We refer readers to the FY 2019 IPF PPS final rule (83 FR 38589) 
for a more detailed discussion of the background and statutory 
authority of the IPFQR Program.
    For the IPFQR Program, we refer to the year in which an IPF would 
receive the 2-percentage point reduction to the annual update to the 
standard Federal rate as the payment determination year. An IPF 
generally meets IPFQR Program requirements by submitting data on 
specified quality measures in a specified time and manner during a data 
submission period that occurs prior to the payment determination year. 
These data reflect a period prior to the data submission period during 
which the IPF furnished care to patients; this period is known as the 
performance period. For example, for a measure for which CY 2024 is the 
performance period which is required to be submitted in CY 2025 and 
affects FY 2026 payment determination, if an IPF did not submit the 
data for this measure as specified during CY 2025 (and meets all other 
IPFQR Program requirements for the FY 2026 payment determination) we 
would reduce by 2-percentage points that IPF's update for the FY 2026 
payment determination year.
    In this proposed rule, we propose to codify the IPFQR Program 
requirements governing IPF reporting on quality measures in a new 
regulation at Sec.  412.433, which is the section preceding our 
existing regulation governing reconsideration and appeals procedures 
for IPFQR Program decisions in our regulations at Sec.  412.434. 
Specifically, we propose to codify a general statement of the IPFQR 
Program authority and structure at Sec.  412.433(a). If finalized, 
paragraph (a) would cite section 1886(s)(4) of the Act, which requires 
the Secretary to implement a quality reporting program for inpatient 
psychiatric hospitals and psychiatric units. The proposed paragraph (a) 
would also state that IPFs paid under the IPF PPS as provided in 
section 1886(s)(1) of the Act that do not report data required for the 
quality measures selected by the Secretary in a form and manner, and at 
a time specified by the Secretary will incur a 2.0 percentage point 
reduction to the annual update to the standard Federal rate with 
respect to the applicable fiscal year.
    We welcome comments on this proposal.

B. Covered Entities

    In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53645), we 
established that the IPFQR Program's quality reporting requirements 
cover those psychiatric hospitals and psychiatric units paid by 
Medicare under IPF PPS in accordance with Sec.  412.404(b). Generally, 
psychiatric hospitals and psychiatric units within acute care and 
critical access hospitals (CAHs) that treat Medicare patients are paid 
under the IPF PPS. Consistent with previous regulations, we continue to 
use the terms ``facility'' or ``IPF'' to refer to both inpatient 
psychiatric hospitals and psychiatric units. This usage follows the 
terminology in our IPF PPS regulations at Sec.  412.402. For more 
information on covered entities, we refer readers to the FY 2013 IPPS/
LTCH PPS final rule (77 FR 53645).

C. Previously Finalized Measures

    The current IPFQR Program includes 14 measures for the FY 2024 
payment determination. For more information on these measures, we refer 
readers to Table 20 of this proposed rule (see section V.G of this 
proposed rule).

D. Measure Adoption

    We strive to put patients and caregivers first, ensuring they are 
empowered to partner with their clinicians in their healthcare 
decision-making using information from data-driven insights that are 
increasingly aligned with meaningful quality measures. We support 
technology that reduces burden and allows clinicians to focus on 
providing high-quality healthcare for their patients. We also support 
innovative approaches to improve quality, accessibility, and 
affordability of care while paying particular attention to improving 
clinicians' and beneficiaries' experiences when interacting with our 
programs. In combination with other efforts across HHS, we believe the 
IPFQR Program helps to incentivize IPFs to improve healthcare quality 
and value while giving patients and providers the tools and information 
needed to make the best individualized decisions. Consistent with these 
goals, our objective in selecting quality measures for the IPFQR 
Program is to balance the need for information on the full spectrum of 
care delivery and the need to minimize the burden of data collection 
and reporting. We have primarily focused on measures that evaluate 
critical processes of care that have significant impact on patient 
outcomes and support CMS and HHS priorities for improved quality and 
efficiency of care provided by IPFs. When possible, we also propose to 
incorporate measures that directly evaluate patient outcomes and 
experience. We refer readers to the CMS National Quality Strategy,\9\ 
the Behavioral Health Strategy,\10\ the Framework for Health 
Equity,\11\ and the Meaningful Measures Framework \12\ for information 
related to our priorities in selecting quality measures.
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    \9\ Schreiber, M, Richards, A, et al. (2022). The CMS National 
Quality Strategy: A Person-Centered Approach to Improving Quality. 
Available at: https://www.cms.gov/blog/cms-national-quality-strategy-person-centered-approach-improving-quality. Accessed on 
February 20, 2023.
    \10\ CMS. (2022). CMS Behavioral Health Strategy. Available at 
https://www.cms.gov/cms-behavioral-health-strategy. Accessed on 
February 20, 2023.
    \11\ CMS. (2022). CMS Framework for Health Equity 2022-2032. 
Available at https://www.cms.gov/files/document/cms-framework-health-equity-2022.pdf. Accessed on February 20, 2023.
    \12\ CMS. (2022). Meaningful Measures 2.0: Moving from Measure 
Reduction to Modernization. Available at https://www.cms.gov/medicare/meaningful-measures-framework/meaningful-measures-20-moving-measure-reduction-modernization. Accessed on February 20, 
2023.
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1. Measure Selection Process
    Section 1890A of the Act requires that the Secretary establish and 
follow a pre-rulemaking process, in coordination with the consensus-
based entity (CBE)

[[Page 21274]]

with a contract under section 1890 of the Act, to solicit input from 
certain groups regarding the selection of quality and efficiency 
measures for the IPFQR Program. Before being proposed for inclusion in 
the IPFQR Program, measures are placed on a list of Measures Under 
Consideration (MUC) list, which is published annually on behalf of CMS 
by the consensus-based entity (CBE),\13\ with which the Secretary must 
contract as required by section 1890(a) of the Act. Following 
publication on the MUC list, the Measure Applications Partnership 
(MAP), a multi-stakeholder group convened by the CBE, reviews the 
measures under consideration for the IPFQR Program, among other Federal 
programs, and provides input on those measures to the Secretary. We 
consider the input and recommendations provided by the MAP in selecting 
all measures for the IPFQR Program.
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    \13\ In previous years, we referred to the consensus-based 
entity by corporate name. We have updated this language to refer to 
the consensus-based entity more generally.
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    Information about the MAP's input on each of our proposed measures 
is described in the following subsections. In our evaluation of the 
IPFQR Program measure set, we identified four measures that we believe 
are appropriate for adoption for the IPFQR Program:
     Facility Commitment to Health Equity;
     Screening for Social Drivers of Health;
     Screen Positive Rate for Social Drivers of Health; and
     Psychiatric Inpatient Experience (PIX) Survey.
    These four measures are described in the following subsections.
2. Proposal To Adopt the Facility Commitment to Health Equity Measure 
Beginning With the CY 2024 Reporting Period Reported in CY 2025/FY 2026 
Payment Determination
a. Background
    Significant and persistent disparities in healthcare outcomes exist 
in the United States. For example, belonging to a racial or ethnic 
minority group, living with a disability, being a member of the 
lesbian, gay, bisexual, transgender, and queer (LGBTQ+) community, 
being a member of a religious minority, living in a rural area, or 
being near or below the poverty level, is often associated with worse 
health outcomes.14 15 16 17 18 19 20 21 22 23 Numerous 
studies have shown that among Medicare beneficiaries, racial and ethnic 
minority individuals often receive clinical care of lower quality, 
report having worse care experiences, and experience more frequent 
hospital readmissions and procedural 
complications.24 25 26 27 28 29 Readmission rates in the 
Hospital Readmissions Reduction Program have been shown to be higher 
among Black and Hispanic Medicare beneficiaries with common conditions, 
including congestive heart failure and acute myocardial 
infarction.30 31 32 33 34 Data indicate that, even after 
accounting for factors such as socioeconomic conditions, members of 
racial and ethnic minority groups reported experiencing lower quality 
of healthcare.\35\ Evidence of differences in quality of care received 
among people from racial and ethnic minority groups shows worse health 
outcomes,

[[Page 21275]]

including a higher incidence of diabetes complications such as 
retinopathy.\36\ Additionally, inequities in the social drivers of 
health (SDOH) affecting these groups, such as poverty and healthcare 
access, are interrelated and influence a wide range of health and 
quality-of-life outcomes and risks.\37\
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    \14\ Joynt KE, Orav E, Jha AK. (2011). Thirty-Day Readmission 
Rates for Medicare Beneficiaries by Race and Site of Care. JAMA, 
305(7), 675 681. Available at: https://jamanetwork.com/journals/jama/fullarticle/645647. Accessed on February 13, 2023.
    \15\ Lindenauer PK, Lagu T, Rothberg MB, et al. (2013). Income 
Inequality and Thirty-Day Outcomes After Acute Myocardial 
Infarction, Heart Failure, and Pneumonia: Retrospective Cohort 
Study. BMJ, 346. Available at: https://doi.org/10.1136/bmj.f521. 
Accessed on February 13, 2023.
    \16\ Trivedi AN, Nsa W, Hausmann LRM, et al. (2014). Quality and 
Equity of Care in U.S. Hospitals. N Engl J Med, 371(24), 229 8-2308. 
Available at: https://www.nejm.org/doi/10.1056/NEJMsa1405003. 
Accessed on February 13, 2023.
    \17\ Polyakova, M, Udalova V, et al. (2021). Racial Disparities 
In Excess All-Cause Mortality During The Early COVID-19 Pandemic 
Varied Substantially Across States. Health Affairs, 40(2), 307-316. 
Available at: https://doi.org/10.1377/hlthaff.2020.02142. Accessed 
on February 14, 2023.
    \18\ Rural Health Research Gateway. (2018). Rural Communities: 
Age, Income, and Health Status. Rural Health Research Recap. 
Available at: https://www.ruralhealthresearch.org/assets/2200-8536/rural-communities-age-income-health-status-recap.pdf. Accessed on 
February 14, 2023.
    \19\ HHS Office of Minority Health. (2020). Progress Report to 
Congress, 2020 Update on the Action Plan to Reduce Racial and Ethnic 
Health Disparities. Department of Health and Human Services. 
Available at: https://www.minorityhealth.hhs.gov/assets/PDF/Update_HHS_Disparities_Dept-FY2020.pdf. Accessed on February 14, 2023.
    \20\ Heslin KC, Hall JE. (2021). Sexual Orientation Disparities 
in Risk Factors for Adverse COVID-19-Related Outcomes, by Race/
Ethnicity--Behavioral Risk Factor Surveillance System, United 
States, 2017-2019. MMWR Morb Mortal Wkly Rep, 70(5), 149. Available 
at: https://www.cdc.gov/mmwr/volumes/70/wr/mm7005a1.htm. Accessed on 
February 14, 2023.
    \21\ Poteat TC, Reisner SL, Miller M, Wirtz AL. (2020). COVID-19 
Vulnerability of Transgender Women With and Without HIV Infection in 
the Eastern and Southern U.S. medRxiv. Available at: https://www.medrxiv.org/content/10.1101/2020.07.21.20159327v1.full.pdf. 
Accessed on February 14, 2023.
    \22\ Vu M, Azmat A, Radejko T, Padela AI. (2016). Predictors of 
Delayed Healthcare Seeking Among American Muslim Women. Journal of 
Women's Health, 25(6), 586-593. Available at: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5912720/. Accessed on February 
14, 2023.
    \23\ Nadimpalli SB, Cleland CM, Hutchinson MK, Islam N, Barnes 
LL, Van Devanter N. (2016). The Association Between Discrimination 
and the Health of Sikh Asian Indians. Health Psychology, 35(4), 351-
355. Available at: https://doi.org/10.1037/hea0000268. Accessed on 
February 14, 2023.
    \24\ CMS Office of Minority Health. (2020). Racial, Ethnic, and 
Gender Disparities in Healthcare in Medicare Advantage. Baltimore, 
MD: Centers for Medicare & Medicaid Services. Available at: https://www.cms.gov/files/document/2020-national-level-results-race-ethnicity-and-gender-pdf.pdf. Accessed on February 14, 2023.
    \25\ CMS Office of Minority Health. (2018). Guide to Reducing 
Disparities in Readmissions. Available at: https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/OMH_Readmissions_Guide.pdf. Accessed on February 14, 2023.
    \26\ Singh JA, Lu X, et al. (2014). Racial Disparities in Knee 
and Hip Total Joint Arthroplasty: An 18-year analysis of national 
Medicare data. Ann Rheum Dis., 73(12), 2107-15. Available at: 
https://ard.bmj.com/content/73/12/2107.full. Accessed on February 
14, 2023.
    \27\ Rivera-Hernandez M, Rahman M, Mor V, Trivedi AN. (2019). 
Racial Disparities in Readmission Rates among Patients Discharged to 
Skilled Nursing Facilities. J Am Geriatr Soc., 67(8), 1672-1679. 
Available at: https://doi.org/10.1111/jgs.15960. Accessed on 
February 14, 2023.
    \28\ Joynt KE, Orav E, Jha AK. (2011). Thirty-Day Readmission 
Rates for Medicare Beneficiaries by Race and Site of Care. JAMA, 
305(7), 675-681. Available at: https://jamanetwork.com/journals/jama/fullarticle/645647. Accessed on February 13, 2023.
    \29\ Tsai TC, Orav EJ, Joynt KE. (2014). Disparities in Surgical 
30-day Readmission Rates for Medicare Beneficiaries by Race and Site 
of Care. Ann Surg., 259(6), 1086-1090. Available at: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4107654/. Accessed on February 
14, 2023.
    \30\ Rodriguez F, Joynt KE, Lopez L, Saldana F, Jha AK. (2011). 
Readmission Rates for Hispanic Medicare Beneficiaries with Heart 
Failure and Acute Myocardial Infarction. Am Heart J., 162(2), 254-
261 e253. Available at: https://www.sciencedirect.com/science/article/pii/S0002870311003966?viewFullText=true. Accessed on 
February 14, 2023.
    \31\ Centers for Medicare & Medicaid Services. (2014). Medicare 
Hospital Quality Chartbook: Performance Report on Outcome Measures. 
Available at: https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/YNH_Chartbook_2014_508Compliant_FINAL.pdf. 
Accessed on February 14, 2023.
    \32\ CMS Office of Minority Health. (2018). Guide to Reducing 
Disparities in Readmissions. Available at: https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/OMH_Readmissions_Guide.pdf. Accessed on February 14, 2023.
    \33\ Prieto-Centurion V, Gussin HA, Rolle AJ, Krishnan JA. 
(2013). Chronic Obstructive Pulmonary Disease Readmissions at 
Minority Serving Institutions. Ann Am Thorac Soc., 10(6), 680-684. 
Available at: https://doi.org/10.1513/AnnalsATS.201307-223OT. 
Accessed on February 14, 2023.
    \34\ Joynt KE, Orav E, Jha AK. (2011). Thirty-Day Readmission 
Rates for Medicare Beneficiaries by Race and Site of Care. JAMA, 
305(7), 675-681. Available at: https://jamanetwork.com/journals/jama/fullarticle/645647. Accessed on February 13, 2023.
    \35\ Nelson AR. (2003). Unequal Treatment: Report of the 
Institute of Medicine on Racial and Ethnic Disparities in 
Healthcare. The Annals of Thoracic Surgery, 76(4), S1377-S1381. 
https://www.annalsthoracicsurgery.org/action/showPdf?pii=S0003-4975%2803%2901205-0. Accessed on February 14, 2023.
    \36\ Peek, ME, Odoms-Young, A, et al. (2010). Race and Shared 
Decision-Making: Perspectives of African-Americans with diabetes. 
Social Science & Medicine, 71(1), 1-9. Available at: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2885527/. Accessed on February 
14, 2023.
    \37\ Department of Health and Human Services. (2023). Healthy 
People 2030: Social Determinants of Health. Available at: https://health.gov/healthypeople/priority-areas/social-determinants-health. 
Accessed on February 20, 2023.
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    Because we are working toward the goal of all patients receiving 
high-quality healthcare, regardless of individual characteristics, we 
are committed to supporting healthcare organizations in building a 
culture of safety and equity that focuses on educating and empowering 
their workforce to recognize and eliminate health disparities. This 
includes patients receiving the right care, at the right time, in the 
right setting for their condition(s), regardless of those 
characteristics.
    In the FY 2022 IPF PPS final rule (86 FR 42625 through 42632), we 
summarized the comments we received in response to our Request for 
Information (RFI) on closing health equity gaps in our quality 
programs, specifically the IPFQR Program. In response to this RFI, 
several commenters recommended that we consider a measure of 
organizational commitment to health equity. These commenters further 
described how infrastructure supports delivery of equitable care. In 
the FY 2023 IPF PPS final rule (87 FR 46865 through 46873), we 
described our RFI on overarching principles for measuring equity and 
healthcare quality across our quality programs and summarized the 
comments we received in response to that RFI. Because we had 
specifically solicited comments on the potential for a structural 
measure assessing an IPF's commitment to health equity, many commenters 
provided input on a structural measure. While many commenters supported 
the concept, one commenter expressed concern with this measure concept 
and stated that there is no evidence that performance on this measure 
would lead to improved patient outcomes (87 FR 46872 through 46873). 
However, we believe that strong and committed leadership from IPF 
executives and board members is essential and can play a role in 
shifting organizational culture and advancing equity goals.
    Additionally, studies demonstrate that facility leadership can 
positively influence culture for better quality, patient outcomes, and 
experience of care.38 39 40 A systematic review of 122 
published studies showed that strong leadership that prioritized 
safety, quality, and the setting of clear guidance with measurable 
goals for improvement resulted in high-performing facilities with 
better patient outcomes.\41\ Therefore, we believe leadership 
commitment to health equity will have a parallel effect in contributing 
to a reduction in health disparities.
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    \38\ Bradley EH, Brewster AL, et al. (2018). How Guiding 
Coalitions Promote Positive Culture Change in Hospitals: A 
Longitudinal Mixed Methods Interventional Study. BMJ Qual Saf., 
27(3), 218-225. Available at: https://qualitysafety.bmj.com/content/qhc/27/3/218.full.pdf. Accessed on February 14, 2023.
    \39\ Smith SA, Yount N, Sorra J. (2017). Exploring Relationships 
Between Hospital Patient Safety Culture and Consumer Reports Safety 
Scores. BMC Health Services Research, 17(1), 143. Available at: 
https://bmchealthservres.biomedcentral.com/articles/10.1186/s12913-017-2078-6. Accessed on February 14, 2023.
    \40\ Keroack MA, Youngberg BJ, et al. (2007). Organizational 
Factors Associated with High Performance in Quality and Safety in 
Academic Medical Centers. Acad Med., 82(12), 1178 86. Available at: 
https://journals.lww.com/academicmedicine/Fulltext/2007/12000/Organizational_Factors_Associated_with_High.14.aspx. Accessed on 
February 14, 2023.
    \41\ Millar R, Mannion R, Freeman T, et al. (2013). Hospital 
Board Oversight of Quality and Patient Safety: A Narrative Review 
and Synthesis of Recent Empirical Research. The Milbank Quarterly, 
91(4), 738-70. Available at: https://onlinelibrary.wiley.com/doi/10.1111/1468-0009.12032. Accessed February 14, 2023.
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    Further, we note that the Agency for Healthcare Research and 
Quality (AHRQ) and The Joint Commission (TJC) identified that facility 
leadership plays an important role in promoting a culture of quality 
and safety.42 43 44  For instance, AHRQ research shows that 
a facility's board can influence quality and safety in a variety of 
ways, not only through strategic initiatives, but also through more 
direct interactions with frontline workers.\45\
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    \42\ Agency for Healthcare Research and Quality. Leadership Role 
in Improving Patient Safety. Patient Safety Primer, September 2019. 
Available at: https://psnet.ahrq.gov/primer/leadership-role-improving-safety. Accessed on February 14, 2023.
    \43\ Joint Commission on Accreditation of Healthcare 
Organizations, USA. The essential role of leadership in developing a 
safety culture. Sentinel Event Alert. 2017 (Revised June 2021). 
Available at: https://www.jointcommission.org/-/media/tjc/documents/resources/patient-safety-topics/sentinel-event/sea-57-safety-culture-and-leadership-final2.pdf. Accessed on February 15, 2023.
    \44\ See information on launch of new ``Health Care Equity 
Certification'' in July 2023 from Joint Commission on Accreditation 
of Healthcare Organizations, USA, available at: https://www.jointcommission.org/our-priorities/health-care-equity/health-care-equity-prepublication/. Accessed on February 15, 2023.
    \45\ Agency for Healthcare Research and Quality. Leadership Role 
in Improving Patient Safety. Patient Safety Primer. (2019). 
Available at: https://psnet.ahrq.gov/primer/leadership-role-improving-safety. Accessed on February 14, 2023.
---------------------------------------------------------------------------

    In addition, the Institute of Healthcare Improvement's (IHI's) 
research of 23 health systems throughout the United States and Canada 
shows that health equity must be a priority championed by leadership 
teams to improve both patient access to needed healthcare services and 
outcomes among populations that have been disadvantaged by the 
healthcare system.\46\ This IHI study specifically identified concrete 
actions to make advancing health equity a core strategy, including 
establishing this goal as a leader-driven priority alongside 
organizational development structures and processes.\47\
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    \46\ Mate KS and Wyatt R. (2017). Health Equity Must Be a 
Strategic Priority. NEJM Catalyst. Available at: https://catalyst.nejm.org/doi/full/10.1056/CAT.17.0556. Accessed on February 
15, 2023.
    \47\ Mate KS and Wyatt R. (2017). Health Equity Must Be a 
Strategic Priority. NEJM Catalyst. Available at: https://catalyst.nejm.org/doi/full/10.1056/CAT.17.0556. Accessed on February 
15, 2023.
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    Based upon these findings, we believe that IPF leadership can be 
instrumental in setting specific, measurable, attainable, realistic, 
and time-based (SMART) goals to assess progress towards achieving 
equity goals and ensuring high-quality care is accessible to all. 
Therefore, consistent with the Hospital Inpatient Quality Reporting 
(IQR) Program's adoption of an attestation-based structural measure in 
the FY 2023 IPPS/LTCH PPS final rule (87 FR 49191 through 49201), we 
propose to adopt an attestation-based structural measure, Facility 
Commitment to Health Equity, to address health equity beginning with 
the CY 2024 reporting period/FY 2026 payment determination.
    The first pillar of our strategic priorities \48\ reflects our deep 
commitment to improvements in health equity by addressing the health 
disparities that underly our health system. In line with this strategic 
pillar, we developed this structural measure to assess facility 
commitment to health equity across five domains (described in Table 17 
in the section V.D.2.b of this proposed rule) using a suite of

[[Page 21276]]

organizational competencies aimed at achieving health equity for racial 
and ethnic minority groups, people with disabilities, members of the 
LGBTQ+ community, individuals with limited English proficiency, rural 
populations, religious minorities, and people facing socioeconomic 
challenges. We believe these elements are actionable focus areas, and 
assessment of IPFs' leadership commitment to them is foundational.
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    \48\ Brooks-LaSure, C. (2021). My First 100 Days and Where We Go 
From Here: A Strategic Vision for CMS. Centers for Medicare & 
Medicaid. Available at: https://www.cms.gov/blog/my-first-100-days-and-where-we-go-here-strategic-vision-cms. Accessed on February 15, 
2023.
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    We also believe adoption of the proposed Facility Commitment to 
Health Equity measure would incentivize IPFs to collect and utilize 
data to identify critical equity gaps, implement plans to address these 
gaps, and ensure that resources are dedicated toward addressing health 
equity initiatives. While many factors contribute to health equity, we 
believe this measure is an important step toward assessing IPFs' 
leadership commitment, and a fundamental step toward closing the gap in 
equitable care for all populations. We note that this measure is not 
intended to encourage IPFs to act on any one data element or domain, 
but instead encourages IPFs to analyze their own findings to understand 
if there are any demographic factors (for example, race, national 
origin, primary language, and ethnicity) as well as SDOHs (for example, 
housing status and food security) associated with underlying inequities 
and, in turn, develop solutions to deliver more equitable care. Thus, 
the proposed Facility Commitment to Health Equity measure aims to 
support IPFs in leveraging available data, pursuing focused quality 
improvement activities, and promoting efficient and effective use of 
resources.
    The proposed Facility Commitment to Health Equity measure aligns 
with the measure previously adopted in the Hospital IQR Program, and we 
refer readers to the FY 2023 IPPS/LTCH PPS final rule (87 FR 49191 
through 49201) for more information regarding the measure's adoption in 
the Hospital IQR Program. The five domains of the proposed measure are 
adapted from the CMS Office of Minority Health's Building an 
Organizational Response to Health Disparities framework, which focuses 
on data collection, data analysis, culture of equity, and quality 
improvement.\49\
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    \49\ CMS. (2021). Building an Organizational Response to Health 
Disparities [Fact Sheet]. Available at: https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/Health-Disparities-Guide.pdf. 
Accessed on February 15, 2023.
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    The proposed measure also aligns with our efforts under the 
Meaningful Measures Framework, which identifies high-priority areas for 
quality measurement and improvement to assess core issues most critical 
to high-quality healthcare and improving patient outcomes.\50\ In 2021, 
we launched Meaningful Measures 2.0 to promote innovation and 
modernization of all aspects of quality, and to address a wide variety 
of settings, stakeholders, and measure requirements.\51\ We are 
addressing healthcare priorities and gaps with Meaningful Measures 2.0 
by leveraging quality measures to promote equity and close gaps in 
care. The proposed Facility Commitment to Health Equity measure 
supports these efforts and is aligned with the Meaningful Measures Area 
of ``Equity of Care'' and the Meaningful Measures 2.0 goal to 
``Leverage Quality Measures to Promote Equity and Close Gaps in Care.'' 
This proposed measure also supports the Meaningful Measures 2.0 
objective to commit to a patient-centered approach in quality measure 
and value-based incentives programs to ensure that quality and safety 
measures address health equity.
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    \50\ Centers for Medicare & Medicaid Services. Meaningful 
Measures Framework. Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/CMS-Quality-Strategy. Accessed on February 
15, 2023.
    \51\ CMS. (2022). Meaningful Measures 2.0: Moving from Measure 
Reduction to Modernization. Available at https://www.cms.gov/medicare/meaningful-measures-framework/meaningful-measures-20-moving-measure-reduction-modernization. Accessed on February 20, 
2023.
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b. Overview of Measure
    The proposed Facility Commitment to Health Equity measure would 
assess IPFs' commitment to health equity using a suite of equity-
focused organizational competencies aimed at achieving health equity 
for populations that have been disadvantaged, marginalized, and 
underserved by the healthcare system. As previously noted, these 
populations include, but are not limited to, racial and ethnic minority 
groups, people with disabilities, members of the LGBTQ+ community, 
individuals with limited English proficiency, rural populations, 
religious minorities, and people facing socioeconomic challenges. Table 
17 sets forth the five attestation domains, and the elements within 
each of those domains, to which an IPF would affirmatively attest for 
the IPF to receive credit for that domain within the proposed Facility 
Commitment to Health Equity measure.

[[Page 21277]]



     Table 17--The Facility Commitment to Health Equity Measure Five
                              Attestations
------------------------------------------------------------------------
                                         Elements: Select all that apply
                                          (Note: Affirmative attestation
                                         of all elements within a domain
              Attestation                   would be required for the
                                         facility to receive a point for
                                           the domain in the numerator)
------------------------------------------------------------------------
Domain 1: Equity is a Strategic
 Priority
    Facility commitment to reducing      (A) Our facility strategic plan
     healthcare disparities is            identifies priority
     strengthened when equity is a key    populations who currently
     organizational priority. Please      experience health disparities.
     attest that your facility has a     (B) Our facility strategic plan
     strategic plan for advancing         identifies health equity goals
     health equity \*\ and that it        and discrete action steps to
     includes all the following           achieving these goals.\*\
     elements.                           (C) Our facility strategic plan
                                          outlines specific resources
                                          which have been dedicated to
                                          achieving our equity goals.
                                         (D) Our facility strategic plan
                                          describes our approach for
                                          engaging key stakeholders,
                                          such as community-based
                                          organizations.
Domain 2: Data Collection
    Collecting valid and reliable        (A) Our facility collects
     demographic and SDOH data on         demographic information (such
     patients served in a facility is     as self-reported race,
     an important step in identifying     national origin, primary
     and eliminating health               language, and ethnicity data)
     disparities. Please attest that      and/or social determinant of
     your facility engages in the         health information on the
     following activities.                majority of our patients.\**\
                                         (B) Our facility has training
                                          for staff in culturally
                                          sensitive collection of
                                          demographic and/or SDOH
                                          information.
                                         (C) Our facility inputs
                                          demographic and/or SDOH
                                          information collected from
                                          patients into structured,
                                          interoperable data elements
                                          using a certified electronic
                                          health record (EHR)
                                          technology.
Domain 3: Data Analysis
    Effective data analysis can provide  (A) Our facility stratifies key
     insights into which factors          performance indicators by
     contribute to health disparities     demographic and/or SDOH
     and how to respond. Please attest    variables to identify equity
     that your facility engages in the    gaps and includes this
     following activities.                information on facility
                                          performance dashboards.
Domain 4: Quality Improvement
    Health disparities are evidence      (A) Our facility participates
     that high-quality care has not       in local, regional, or
     been delivered equitably \***\ to    national quality improvement
     all patients. Engagement in          activities focused on reducing
     quality improvement activities can   health disparities.
     improve quality of care for all
     patients..
Domain 5: Leadership Engagement
    Leaders and staff can improve their  (A) Our facility senior
     capacity to address disparities by   leadership, including chief
     demonstrating routine and thorough   executives and the entire
     attention to equity and setting an   facility \****\ board of
     organizational culture of equity.    trustees, annually reviews our
     Please attest that your facility     strategic plan for achieving
     engages in the following             health equity.
     activities..                        (B) Our facility senior
                                          leadership, including chief
                                          executives and the entire
                                          facility board of trustees,
                                          annually reviews key
                                          performance indicators
                                          stratified by demographic and/
                                          or social factors.
------------------------------------------------------------------------
* After publication of the 2022 MUC List, we clarified the language in
  Domain 1 to refer to ``health equity'' instead of ``healthcare
  equity.''
** After publication of the 2022 MUC List, we clarified the language in
  Domain 2 to refer to example demographic information.
*** After publication of the 2022 MUC List, we clarified the language in
  Domain 4: ``Health disparities are evidence that high quality care has
  not been delivered equitably to all patients.''
**** After publication of the 2022 MUC List, we identified that Domain 5
  incorrectly referred to the ``hospital board of trustees'' instead of
  the ``facility board of trustees.''


[[Page 21278]]

(1) Measure Calculation
    The proposed Facility Commitment to Health Equity measure consists 
of five attestation-based questions, each representing a separate 
domain of the IPF's commitment to addressing health equity. Some of 
these domains have multiple elements to which an IPF would be required 
to attest. For an IPF to affirmatively attest ``yes'' to a domain, and 
receive credit for that domain, the IPF would evaluate and determine 
whether it engages in each of the elements that comprise that domain. 
Each of the domains would be represented in the denominator as a point, 
for a total of five points (that is, one point per domain).
    The numerator of the proposed Facility Commitment to Health Equity 
measure would capture the total number of domain attestations that the 
IPF is able to affirm. An IPF that affirmatively attests to each 
element within the five domains would receive the maximum five points.
    An IPF would only receive a point for a domain if it attests 
``yes'' to all related elements within that domain. There is no 
``partial credit'' for elements. For example, for Domain 1 (``Facility 
commitment to reducing healthcare disparities is strengthened when 
equity is a key organizational priority''), an IPF would evaluate and 
determine whether its strategic plan meets each of the elements 
described in (A) through (D) (see Table 17 in section V.D.2.b of this 
proposed rule). If the IPF's strategic plan meets all four of these 
elements, the IPF would affirmatively attest ``yes'' to Domain 1 and 
would receive one (1) point for that attestation. An IPF would not be 
able to receive partial credit for a domain. For example, if the IPF's 
strategic plan meets elements (A) and (B), but not (C) and (D), of 
Domain 1, then the IPF would not be able to affirmatively attest 
``yes'' to Domain 1 and would not receive a point for that attestation, 
and instead would receive zero points for Doman 1.
    In response to our RFI on the potential for a structural measure 
assessing an IPF's commitment to health equity, several commenters 
expressed concern that such a measure would be difficult for IPFs to 
report because of the requirement to use certified electronic health 
record (EHR) technology for Domain 2 (87 FR 46972 through 46873). We 
believe that use of certified EHR technology is an important element of 
collecting valid and reliable demographic and social drivers of health 
data on patients served in an IPF and that use of this technology 
facilitates data analytics to ensure consistent, high-quality, 
equitable care. However, we recognize that some IPFs may face 
challenges to adopting certified EHR technology. We note that the IPFQR 
Program is a pay-for-reporting program, not a pay-for-performance 
program, and therefore IPFs that do not have certified EHR technology 
can attest that they satisfy the other domains, as applicable, and 
receive a score of 0-4 out of 5 without any penalties.
(2) Review by the Measure Applications Partnership (MAP)
    We included the proposed Facility Commitment to Health Equity 
measure on the publicly available ``List of Measures Under 
Consideration for December 1, 2022'' (MUC List), a list of measures 
under consideration for use in various Medicare programs.\52\ The 
specifications for the proposed Facility Commitment to Health Equity 
measure, which were available during the review of the MUC List, are 
available on the CMS website at: https://mmshub.cms.gov/sites/default/files/map-hospital-measure-specifications-manual-2022.pdf.
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    \52\ Centers for Medicare & Medicaid Services. List of Measures 
Under Consideration for December 1, 2022. Available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
---------------------------------------------------------------------------

    The Consensus-Based Entity (CBE) convened Measure Applications 
Partnership (MAP) Health Equity Advisory Group reviewed the MUC List 
and the proposed Facility Commitment to Health Equity measure (MUC 
2022-027) in detail on December 6 through 7, 2022.\53\ The MAP Health 
Equity Advisory Group raised concerns that this measure does not 
evaluate outcomes and may not directly address health inequities at a 
systemic level, but generally agreed that a structural measure such as 
this one represents progress toward improving equitable care.\54\
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    \53\ Centers for Medicare & Medicaid Services. 2022-2023 MAP 
Final Recommendations. Available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \54\ Centers for Medicare & Medicaid Services. 2022-2023 MAP 
Final Recommendations. Available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
---------------------------------------------------------------------------

    In addition, on December 8 through 9, 2022, the MAP Rural Health 
Advisory Group reviewed the 2022 MUC List and expressed support for 
this measure as a step towards advancing access to and quality of care 
with the caveat that resource challenges exist in rural 
communities.\55\
---------------------------------------------------------------------------

    \55\ Centers for Medicare & Medicaid Services. 2022-2023 MAP 
Final Recommendations. Available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
---------------------------------------------------------------------------

    The MAP Hospital Workgroup reviewed the 2022 MUC List on December 
13 through 14, 2022.\56\ The MAP Hospital Workgroup recognized that 
reducing health care disparities would represent a substantial benefit 
to overall quality of care but expressed reservations about the 
measure's link to clinical outcomes. As stated in the MAP 
recommendations document, the MAP Hospital Workgroup members voted to 
conditionally support the Facility Commitment to Health Equity measure 
for rulemaking pending: (1) endorsement by the CBE; (2) commitment to 
consideration of equity related outcome measures in the future; (3) 
provision of more clarity on the Facility Commitment to Health Equity 
measure and supplementing interpretation with results; and (4) 
verification of accurate attestation by IPFs.\57\ Thereafter, the MAP 
Coordinating Committee deliberated on January 24 through 25, 2023 and 
ultimately voted to uphold the MAP Hospital Workgroup's recommendation 
to conditionally support the measure for rulemaking.\58\
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    \56\ Centers for Medicare & Medicaid Services. 2022-2023 MAP 
Final Recommendations. Available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \57\ Centers for Medicare & Medicaid Services. 2022-2023 MAP 
Final Recommendations. Available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \58\ Centers for Medicare & Medicaid Services. 2022-2023 MAP 
Final Recommendations. Available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
---------------------------------------------------------------------------

    We believe that the proposed Facility Commitment to Health Equity 
measure establishes an important foundation for prioritizing the 
achievement of health equity among IPFs participating in the IPFQR 
Program. Our approach to developing health equity measures has been 
incremental to date, but we see inclusion of such measures in the IPFQR 
Program as informing efforts to advance and achieve health equity not 
only among IPFs, but also other acute care settings. We believe this 
proposed measure to be a building block that lays the groundwork for a 
future meaningful suite of measures that would assess IPF progress in 
providing high-quality healthcare for all patients regardless of social 
risk factors or demographic characteristics.
(3) CBE Endorsement
    We have not submitted this measure for CBE endorsement at this 
time.

[[Page 21279]]

Although section 1886(s)(4)(D)(i) of the Act generally requires that 
measures specified by the Secretary shall be endorsed by the entity 
with a contract under section 1890(a) of the Act, section 
1886(s)(4)(D)(ii) of the Act states that, in the case of a specified 
area or medical topic determined appropriate by the Secretary for which 
a feasible and practical measure has not been endorsed by the entity 
with a contract under section 1890(a) of the Act, the Secretary may 
specify a measure that is not so endorsed as long as due consideration 
is given to measures that have been endorsed or adopted by a consensus 
organization identified by the Secretary. We reviewed CBE-endorsed 
measures and were unable to identify any other CBE-endorsed measures on 
this topic, and therefore, we believe the exception in section 
1886(s)(4)(D)(ii) of the Act applies.
c. Data Collection, Submission, and Reporting
    IPFs are required to submit information for structural measures 
once annually using a CMS-approved web-based data collection tool 
available within the Hospital Quality Reporting (HQR) System. For more 
information about our previously finalized policies related to 
reporting of structural measures, we refer readers to the FY 2014 IPPS/
LTCH PPS final rule (78 FR 50890 through 50901) and the FY 2015 IPF PPS 
final rule (79 FR 45963 through 45964 and 45976). Given the role of 
committed leadership in improving health outcomes for all patients, we 
propose to adopt this measure beginning with attestation in CY 2025 
reflecting the CY 2024 reporting period and affecting the FY 2026 
payment determination.
    We invite comments on our proposed adoption of the Facility 
Commitment to Health Equity Measure beginning with the FY 2026 payment 
determination.
3. Proposal To Adopt the Screening for Social Drivers of Health Measure 
Beginning With Voluntary Reporting of CY 2024 Data Followed by Required 
Reporting Beginning With CY 2025 Data/FY 2027 Payment Determination
a. Background
    Health-related social needs (HRSNs), which we define as individual-
level, adverse social conditions that negatively impact an individual 
person's health or healthcare, are significant risk factors associated 
with worse health outcomes as well as increased healthcare 
utilization.\59\ We believe that consistently pursuing identification 
of HRSNs would have two significant benefits. First, HRSNs 
disproportionately impact people who have historically been underserved 
by the healthcare system \60\ and screening helps identify individuals 
who may have HRSNs. Second, screening for HRSNs could support ongoing 
IPF quality improvement initiatives by providing data with which to 
stratify patient risk and organizational performance. Further, we 
believe that IPFs collecting patient-level HRSN data through screening 
is essential for the long-term in encouraging meaningful collaboration 
between healthcare providers and community-based organizations and in 
implementing and evaluating related innovations in health and social 
care delivery.
---------------------------------------------------------------------------

    \59\ Centers for Medicare & Medicaid Services. (2021). A Guide 
to Using the Accountable Health Communities Health-Related Social 
Needs Screening Tool: Promising Practices and Key Insights. June 
2021. Available at: https://innovation.cms.gov/media/document/ahcm-screeningtool-companion. Accessed on February 20, 2023.
    \60\ American Hospital Association. (2020). Health Equity, 
Diversity & Inclusion Measures for Hospitals and Health System 
Dashboards. December 2020. Available at: https://ifdhe.aha.org/system/files/media/file/2020/12/ifdhe_inclusion_dashboard.pdf. 
Accessed on February 20, 2023.
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    Health disparities manifest primarily as worse health outcomes in 
population groups where access to care is 
inequitable.61 62 63 64 65 Such differences persist across 
geography and healthcare settings irrespective of improvements in 
quality of care over time.66 67 68 Assessment of HRSNs is an 
essential mechanism for capturing the interaction between social, 
community, and environmental factors associated with health status and 
health outcomes.69 70 71
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    \61\ Seligman, H.K., & Berkowitz, S.A. (2019). Aligning Programs 
and Policies to Support Food Security and Public Health Goals in the 
United States. Annual Review of Public Health, 40(1), 319-337. 
Available at: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6784838/. 
Accessed on February 20, 2023.
    \62\ The Physicians Foundation. (2020). Survey of America's 
Patients, Part Three. Available at: https://physiciansfoundation.org/wp-content/uploads/2020/10/2020-Physicians-Foundation-Survey-Part3.pdf. Accessed on February 20, 2023.
    \63\ Office of the Assistant Secretary for Planning and 
Evaluation (ASPE) (2020). Report to Congress: Social Risk Factors 
and Performance Under Medicare's Value-Based Purchasing Program 
(Second of Two Reports). Available at: https://aspe.hhs.gov/pdf-report/second-impact-report-to-congress. Accessed on February 20, 
2023.
    \64\ Trivedi AN, Nsa W, Hausmann LRM, et al. (2014). Quality and 
Equity of Care in U.S. Hospitals. N Engl J Med, 371(24), 2298-2308. 
Available at: https://www.nejm.org/doi/10.1056/NEJMsa1405003. 
Accessed on February 13, 2023.
    \65\ Billioux, A., Verlander, K., Anthony, S., & Alley, D. 
(2017). Standardized Screening for Health Related Social Needs in 
Clinical Settings: The Accountable Health Communities Screening 
Tool. NAM Perspectives, 7(5). Available at: https://doi.org/10.31478/201705b. Accessed on February 20, 2023.
    \66\ Office of the Assistant Secretary for Planning and 
Evaluation (ASPE) (2020). Report to Congress: Social Risk Factors 
and Performance Under Medicare's Value-Based Purchasing Program 
(Second of Two Reports). Available at: https://aspe.hhs.gov/pdf-report/second-impact-report-to-congress. Accessed on February 20, 
2023.
    \67\ Hill-Briggs, F. (2021). Social Determinants of Health and 
Diabetes: A Scientific Review. Diabetes Care. Available at: https://diabetesjournals.org/care/article/44/1/258/33180/Social-Determinants-of-Health-and-Diabetes-A. Accessed on February 20, 
2023.
    \68\ Khullar, D., MD. (2020). Association Between Patient Social 
Risk and Physician Performance American academy of Family 
Physicians. Addressing Social Determinants of Health in Primary Care 
team-based approach for advancing health equity. Available at: 
https://www.aafp.org/dam/AAFP/documents/patient_care/everyone_project/team-based-approach.pdf. Accessed on February 20, 
2023.
    \69\ Institute of Medicine. (2014). Capturing Social and 
Behavioral Domains and Measures in Electronic Health Records: Phase 
2. Washington, DC: The National Academies Press. Available at: 
https://doi.org/10.17226/18951. Accessed on February 20, 2023.
    \70\ Alley, D.E., C.N. Asomugha, P.H. Conway, and D.M. Sanghavi. 
(2016). Accountable Health Communities--Addressing Social Needs 
through Medicare and Medicaid. The New England Journal of Medicine 
374(1):8-11. Available at: https://doi.org/10.1056/NEJMp1512532. 
Accessed on February 20, 2023.
    \71\ Centers for Disease Control and Prevention. CDC COVID-19 
Response Health Equity Strategy: Accelerating Progress Towards 
Reducing COVID-19 Disparities and Achieving Health Equity. July 
2020. Available at: https://www.cdc.gov/coronavirus/2019-ncov/community/health-equity/cdc-strategy.html. Accessed on February 2, 
2023.
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    Growing evidence demonstrates that specific HRSNs are directly 
associated with patient health outcomes as well as healthcare 
utilization, costs, and performance in quality-based payment 
programs.72 73 While widespread interest in addressing HRSNs 
exists, action is inconsistent.\74\
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    \72\ Zhang Y, Li J, Yu J, Braun RT, Casalino LP (2021). Social 
Determinants of Health and Geographic Variation in Medicare per 
Beneficiary Spending. JAMA Network Open. 2021;4(6):e2113212. https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2780864. 
Accessed on February 20, 2023.
    \73\ Khullar, D., Schpero, W.L., Bond, A.M., Qian, Y., & 
Casalino, L.P. (2020). Association Between Patient Social Risk and 
Physician Performance Scores in the First Year of the Merit-based 
Incentive Payment System. JAMA, 324(10), 975-983. https://doi.org/10.1001/jama.2020.13129. Accessed on February 20, 2023.
    \74\ TK Fraze, AL Brewster, VA Lewis, LB Beidler, GF Murray, CH 
Colla. Prevalence of screening for food insecurity, housing 
instability, utility needs, transportation needs, and interpersonal 
violence by US physician practices and hospitals. JAMA Network Open 
2019; https://jamanetwork.com/journals/jamanetworkopen/fullarticle/10.1001/jamanetworkopen.2019.11514. Accessed on February 20, 2023.
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    While social risk factors account for 50 to 70 percent of health 
outcomes, the mechanisms by which this connection emerges are complex 
and

[[Page 21280]]

multifaceted.75 76 77 78 The persistent interactions among 
individuals' HRSNs, medical providers' practices and behaviors, and 
community resources significantly impact healthcare access, quality, 
and ultimately costs, as described in the CMS Equity Plan for Improving 
Quality in Medicare.79 80 In their 2018 survey, to which 
more than 8,500 physicians responded, the Physicians Foundation found 
that almost 90 percent of these physician respondents reported their 
patients had a serious health problem linked to poverty or other social 
conditions.\81\ Additionally, associations among disproportionate 
health risk, hospitalization, and adverse health outcomes have been 
highlighted and magnified by the COVID-19 pandemic.82 83
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    \75\ Kaiser Family Foundation. (2021). Racial and Ethnic Health 
Inequities and Medicare. Available at: https://www.kff.org/medicare/report/racial-and-ethnic-health-inequities-and-medicare/. Accessed 
February 20, 2023.
    \76\ Khullar, D., MD. (2020). Association Between Patient Social 
Risk and Physician Performance American academy of Family 
Physicians. Addressing Social Determinants of Health in Primary Care 
team-based approach for advancing health equity. Available at: 
https://www.aafp.org/dam/AAFP/documents/patient_care/everyone_project/team-based-approach.pdf. Accessed on February 20, 
2023.
    \77\ Hammond, G., Johnston, K., Huang, K., Joynt Maddox, K. 
(2020). Social Determinants of Health Improve Predictive Accuracy of 
Clinical Risk Models for Cardiovascular Hospitalization, Annual 
Cost, and Death. Circulation: Cardiovascular Quality and Outcomes, 
13 (6) 290-299. Available at: https://doi.org/10.1161/CIRCOUTCOMES.120.006752. Accessed on February 20, 2023.
    \78\ The Physicians Foundation. (2021). Viewpoints: Social 
Determinants of Health. Available at: https://physiciansfoundation.org/wp-content/uploads/2019/08/The-Physicians-Foundation-SDOH-Viewpoints.pdf. Accessed on February 20, 2023.
    \79\ Centers for Medicare & Medicaid Services. (2021). Paving 
the Way to Equity: A Progress Report. Available at: https://www.cms.gov/files/document/paving-way-equity-cms-omh-progress-report.pdf. Accessed on February 20, 2023.
    \80\ Centers for Medicare & Medicaid Services Office of Minority 
Health. (2021). The CMS Equity Plan for Improving Quality in 
Medicare. 2015-2021. Available at: https://www.cms.gov/About-CMS/
Agency-Information/OMH/OMH_Dwnld-
CMS_EquityPlanforMedicare_090615.pdf#:~:text=The%20Centers%20for%20Me
dicare%20%26%20Medicaid%20Services%20%28CMS%29,evidence%20base%2C%20i
dentifying%20opportunities%2C%20and%20gathering%20stakeholder%20input
. Accessed on February 20, 2023.
    \81\ The Physicians Foundation. (2019). Viewpoints: Social 
Determinants of Health. Available at: https://physiciansfoundation.org/wp-content/uploads/2019/08/The-Physicians-Foundation-SDOH-Viewpoints.pdf. Accessed on February 20, 2023.
    \82\ Centers for Disease Control and Prevention. (2020). CDC 
COVID-19 Response Health Equity Strategy: Accelerating Progress 
Towards Reducing COVID-19 Disparities and Achieving Health Equity. 
July 2020. Available at: https://www.cdc.gov/coronavirus/2019-ncov/community/health-equity/cdc-strategy.html. Accessed on February 20, 
2023.
    \83\ Kaiser Family Foundation. (2021). Racial and Ethnic Health 
Inequities and Medicare. Available at: https://www.kff.org/medicare/report/racial-and-ethnic-health-inequities-and-medicare/. Accessed 
on February 20, 2023.
---------------------------------------------------------------------------

    In 2017, CMS' Center for Medicare and Medicaid Innovation (CMMI) 
launched the Accountable Health Communities (AHC) Model to test the 
impact of systematically identifying and addressing the HRSNs of 
Medicare and Medicaid beneficiaries (that is, through screening, 
referral, and community navigation) on their health outcomes and 
related healthcare utilization and costs.84 85 86 87 The AHC 
Model is one of the first Federal pilots to systematically test whether 
identifying and addressing core HRSNs improves healthcare costs, 
utilization, and outcomes with over 600 clinical sites in 21 
states.\88\ The AHC Model had a 5-year period of performance that began 
in May 2017 and ended in April 2022, with beneficiary screening 
beginning in the summer of 2018.89 90 Evaluation of the AHC 
Model data is still underway.
---------------------------------------------------------------------------

    \84\ Centers for Medicare & Medicaid Services. (2021). A Guide 
to Using the Accountable Health Communities Health-Related Social 
Needs Screening Tool: Promising Practices and Key Insights. June 
2021. Accessed: November 23, 2021. Available at: https://innovation.cms.gov/media/document/ahcm-screeningtool-companion. 
Accessed on February 20, 2023.
    \85\ Alley, D.E., Asomugha, C.N., et al. (2016). Accountable 
Health Communities--Addressing Social Needs through Medicare and 
Medicaid. The New England Journal of Medicine 374(1):8-11. Available 
at: https://doi.org/10.1056/NEJMp1512532. Accessed on February 20, 
2023.
    \86\ Billioux, A., Verlander, K., Anthony, S., & Alley, D. 
(2017). Standardized Screening for Health-Related Social Needs in 
Clinical Settings: The Accountable Health Communities Screening 
Tool. NAM Perspectives, 7(5). Available at: https://doi.org/10.31478/201705b. Accessed on February 20, 2023.
    \87\ Centers for Medicare & Medicaid Services. (2021). 
Accountable Health Communities Model. Accountable Health Communities 
Model  CMS Innovation Center Available at: https://innovation.cms.gov/innovation-models/ahcm. Accessed on February 20, 
2023.
    \88\ RTI International. (2020). Accountable Health Communities 
(AHC) Model Evaluation. Available at: https://innovation.cms.gov/data-and-reports/2020/ahc-first-eval-rpt. Accessed on February 20, 
2023.
    \89\ RTI International. (2020). Accountable Health Communities 
(AHC) Model Evaluation. Available at: https://innovation.cms.gov/data-and-reports/2020/ahc-first-eval-rpt. Accessed on February 20, 
2023.
    \90\ We note that the model officially concluded in April 2022, 
but many awardees have continued with no-cost extensions to continue 
utilizing unspent cooperative agreement funding and all awardees 
will conclude by April 2023.
---------------------------------------------------------------------------

    Under the AHC Model, the following five core domains were selected 
to screen for HRSNs among Medicare and Medicaid beneficiaries: (1) food 
insecurity; (2) housing instability; (3) transportation needs; (4) 
utility difficulties; and (5) interpersonal safety. These domains were 
chosen based upon literature review and expert consensus utilizing the 
following criteria: (1) availability of high-quality scientific 
evidence linking a given HRSN to adverse health outcomes and increased 
healthcare utilization, including hospitalizations and associated 
costs; (2) ability for a given HRSN to be screened and identified in 
the inpatient setting prior to discharge, addressed by community-based 
services, and potentially improve healthcare outcomes, including 
reduced readmissions; and (3) evidence that a given HRSN is not 
systematically addressed by healthcare providers.\91\ In addition to 
established evidence of their association with health status, risk, and 
outcomes, these five domains were selected because they can be assessed 
across the broadest spectrum of individuals in a variety of 
settings.92 93 94
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    \91\ Billioux, A., Verlander, K., Anthony, S., & Alley, D. 
(2017). Standardized Screening for Health-Related Social Needs in 
Clinical Settings: The Accountable Health Communities Screening 
Tool. NAM Perspectives, 7(5). Available at: https://doi.org/10.31478/201705b. Accessed on February 20, 2023.
    \92\ Billioux, A., Verlander, K., Anthony, S., & Alley, D. 
(2017). Standardized Screening for Health-Related Social Needs in 
Clinical Settings: The Accountable Health Communities Screening 
Tool. NAM Perspectives, 7(5). Available at: https://doi.org/10.31478/201705b. Accessed on February 20, 2023.
    \93\ Centers for Medicare & Medicaid Services. (2021). 
Accountable Health Communities Model. Accountable Health Communities 
Model  CMS Innovation Center. Available at: https://innovation.cms.gov/innovation-models/ahcm. Accessed on February 20, 
2023.
    \94\ Kamyck, D., Senior Director of Marketing. (2019). CMS 
releases standardized screening tool for health-related social 
needs. Activate Care. Available at: https://blog.activatecare.com/standardized-screening-for-health-related-social-needs-in-clinical-settings-the-accountable-health-communities-screening-tool/. 
Accessed on February 20, 2023.
---------------------------------------------------------------------------

    These five evidence-based HRSN domains, which informed development 
of the two Social Drivers of Health measures adopted in the Hospital 
IQR Program and proposed here for the IPFQR Program, are described in 
Table 18. We note that while the measures were initially developed by 
The Health Initiative (THI), CMS has since assumed stewardship.

[[Page 21281]]



  Table 18--The Five Core HRSN Domains To Screen for Social Drivers of
                                 Health
------------------------------------------------------------------------
            Domain                             Description
------------------------------------------------------------------------
Food Insecurity...............  Food insecurity is defined as limited or
                                 uncertain access to adequate quality
                                 and quantity of food at the household
                                 level. It is associated with diminished
                                 mental and physical health and
                                 increased risk for chronic
                                 conditions.\95\ \96\ Individuals
                                 experiencing food insecurity often have
                                 inadequate access to healthier food
                                 options which can impede self-
                                 management of chronic diseases like
                                 diabetes and heart disease, and require
                                 individuals to make personal trade-offs
                                 between food purchases and medical
                                 needs, including prescription
                                 medication refills and preventive
                                 health services.\97\ \98\ Food
                                 insecurity is associated with high-cost
                                 healthcare utilization including
                                 emergency department (ED) visits and
                                 hospitalizations.\99\ \100\ \101\
                                 Evidence indicates that individuals
                                 with serious mental illness have a
                                 higher prevalence of food insecurity
                                 than the U.S. population as a whole
                                 (specifically 71% prevalence among
                                 patients with severe mental illness
                                 versus 14.9% in the population as a
                                 whole).\102\
Housing Instability...........  Housing instability encompasses multiple
                                 conditions ranging from inability to
                                 pay rent or mortgage, frequent changes
                                 in residence including temporary stays
                                 with friends and relatives, living in
                                 crowded conditions, and actual lack of
                                 sheltered housing in which an
                                 individual does not have a personal
                                 residence.\103\ \104\ Population
                                 surveys consistently show that people
                                 from some racial and ethnic minority
                                 groups constitute the largest
                                 proportion of the U.S. population
                                 experiencing housing instability.\105\
                                 Housing instability is associated with
                                 higher rates of chronic illnesses,
                                 injuries, and complications and more
                                 frequent utilization of high-cost
                                 healthcare services.\106\ \107\
                                 Additionally, housing instability can
                                 exacerbate psychiatric conditions and
                                 individuals with psychiatric conditions
                                 are more likely to have housing
                                 instability.\108\
Transportation Needs..........  Unmet transportation needs include
                                 limitations that impede transportation
                                 to destinations required for all
                                 aspects of daily living.\109\ Groups
                                 disproportionately affected include
                                 older adults (aged >65 years), people
                                 with lower incomes, people with
                                 impaired mobility, residents of rural
                                 areas, and people from some racial and
                                 ethnic minority groups. Transportation
                                 needs contribute to postponement of
                                 routine medical care and preventive
                                 services which ultimately lead to
                                 chronic illness exacerbation and more
                                 frequent utilization of high-cost
                                 healthcare services including emergency
                                 medical services, EDs, and
                                 hospitalizations.\110\ \111\ \112\
                                 \113\ Patients with serious mental
                                 illness often lack access to
                                 transportation with many Medicaid
                                 eligible patients relying on Medicaid's
                                 non-emergency medical transportation
                                 (NEMT) to access needed healthcare,
                                 though this does not provide access to
                                 transportation to other aspects of
                                 daily living.\114\
Utility Difficulties..........  Inconsistent availability of
                                 electricity, water, oil, and gas
                                 services is directly associated with
                                 housing instability and food
                                 insecurity.\115\ Specifically,
                                 interventions that increase or maintain
                                 access to such services have been
                                 associated with individual and
                                 population-level health
                                 improvements.\116\
Interpersonal Safety..........  Interpersonal safety affects individuals
                                 across the lifespan, from birth to old
                                 age, and is directly linked to mental
                                 and physical health. Assessment for
                                 this domain includes screening for
                                 exposure to intimate partner violence,
                                 child abuse, and elder abuse.\117\
                                 Exposure to violence and social
                                 isolation are reflective of individual-
                                 level social relations and living
                                 conditions that are directly associated
                                 with injury, psychological distress,
                                 and death in all age groups.\118\ \119\
                                 Research indicates that adults with
                                 mental illness are at an increased risk
                                 of being victims of violence, noting
                                 that 30.9 percent were victims of
                                 violence within a six month period and
                                 recommending increased public health
                                 interventions to reduce violence in
                                 this vulnerable population.\120\
------------------------------------------------------------------------

    As a first step towards leveraging the opportunity to close equity 
gaps by identifying patients' HRSNs, we finalized the adoption of two 
evidence-based measures in the Hospital IQR Program--the Screening for 
Social Drivers of Health measure and the Screen Positive Rate for 
Social Drivers of Health measure (collectively, Social Drivers of 
Health measures)--and refer readers to the FY 2023 IPPS/LTCH PPS final 
rule (87 FR 49191 through 49220).
---------------------------------------------------------------------------

    \95\ Berkowitz SA, Seligman HK, Meigs JB, Basu S. Food 
insecurity, healthcare utilization, and high cost: a longitudinal 
cohort study. Am J Managed Care. 2018 Sep;24(9):399-404. PMID: 
30222918; PMCID: PMC6426124. Available at https://pubmed.ncbi.nlm.nih.gov/30222918/. Accessed on February 20, 2023.
    \96\ Hill-Briggs, F. (2021). Social Determinants of Health and 
Diabetes: A Scientific Review. Diabetes Care. Available at: https://diabetesjournals.org/care/article/44/1/258/33180/Social-Determinants-of-Health-and-Diabetes-A. Accessed on February 20, 
2023.
    \97\ Seligman, H.K., & Berkowitz, S.A. (2019). Aligning Programs 
and Policies to Support Food Security and Public Health Goals in the 
United States. Annual Review of Public Health, 40(1), 319-337. 
Available at: https://pubmed.ncbi.nlm.nih.gov/30444684/. Accessed on 
February 20, 2023.
    \98\ National Academies of Sciences, Engineering, and Medicine 
2006. Executive Summary: Cost-Benefit Analysis of Providing Non-
Emergency Medical Transportation. Washington, DC: The National 
Academies Press. Available at: https://doi.org/10.17226/23285. 
Accessed on February 20, 2023.
    \99\ Hill-Briggs, F. (2021). Social Determinants of Health and 
Diabetes: A Scientific Review. Diabetes Care. Available at: https://diabetesjournals.org/care/article/44/1/258/33180/Social-Determinants-of-Health-and-Diabetes-A. Accessed on February 20, 
2023.
    \100\ Berkowitz SA, Seligman HK, Meigs JB, Basu S. Food 
insecurity, healthcare utilization, and high cost: a longitudinal 
cohort study. Am J Managed Care. 2018 Sep;24(9):399-404. PMID: 
30222918; PMCID: PMC6426124. Available at https://pubmed.ncbi.nlm.nih.gov/30222918/. Accessed on February 20, 2023.
    \101\ Dean, E.B., French, M.T., & Mortensen, K. (2020a). Food 
insecurity, health care utilization, and health care expenditures. 
Health Services Research, 55(S2), 883-893. Available at: https://doi.org/10.1111/1475-6773.13283. Accessed on February 20, 2023.
    \102\ https://ps.psychiatryonline.org/doi/10.1176/appi.ps.201300022?url_ver=Z39.88-2003&rfr_id=ori:rid:crossref.org&rfr_dat=cr_pub%20%200pubmed. 
Accessed on February 20, 2023.
    \103\ Larimer, M.E. (2009). Health Care and Public Service Use 
and Costs Before and After Provision of Housing for Chronically 
Homeless Persons with Severe Alcohol Problems. JAMA, 301(13), 1349. 
Available at: https://doi.org/10.1001/jama.2009.414.
    \104\ Hill-Briggs, F. (2021, January 1). Social Determinants of 
Health and Diabetes: A Scientific Review. Diabetes Care. Available 
at: https://pubmed.ncbi.nlm.nih.gov/33139407/.
    \105\ Henry, M., de Sousa, T., Roddey, C., Gayen, S., Bednar, 
T.; Abt Associates. The 2020 Annual Homeless Assessment Report 
(AHAR) to Congress; Part 1: Point-in-Time Estimates of Homelessness, 
January 2021. U.S. Department of Housing and Urban Development. 
Accessed November 24, 2021. Available at: https://www.huduser.gov/portal/sites/default/files/pdf/2020-AHAR-Part-1.pdf.
    \106\ Larimer, M.E. (2009). Health Care and Public Service Use 
and Costs Before and After Provision of Housing for Chronically 
Homeless Persons with Severe Alcohol Problems. JAMA, 301(13), 1349. 
Available at: https://doi.org/10.1001/jama.2009.414.
    \107\ Baxter, A., Tweed, E., Katikireddi, S., Thomson, H. 
(2019). Effects of Housing First approaches on health and well-being 
of adults who are homeless or at risk of homelessness: systematic 
review and meta-analysis of randomized controlled trials. Journal of 
Epidemiology and Community Health, 73; 379-387. Available at: 
https://jech.bmj.com/content/jech/73/5/379.full.pdf.
    \108\ Housing Instability and Mental Health. UNC Greensboro. May 
7, 2021. Available at: https://chcs.uncg.edu/housing-instability-
mental-health/
#:~:text=Mental%20health%20is%20correlated%20with%20housing%20in%20se
veral,homeless%20population%20in%20America%20suffer%20a%20mental%20il
lness. Accessed on December 7, 2022.
    \109\ National Academies of Sciences, Engineering, and Medicine 
2006. Executive Summary: Cost-Benefit Analysis of Providing Non-
Emergency Medical Transportation. Washington, DC: The National 
Academies Press. Available at: https://doi.org/10.17226/23285.
    \110\ National Academies of Sciences, Engineering, and Medicine 
2006. Executive Summary: Cost-Benefit Analysis of Providing Non-
Emergency Medical Transportation. Washington, DC: The National 
Academies Press. Available at: https://doi.org/10.17226/23285.
    \111\ Hill-Briggs, F. (2021, January 1). Social Determinants of 
Health and Diabetes: A Scientific Review. Diabetes Care. Available 
at: https://pubmed.ncbi.nlm.nih.gov/33139407/.
    \112\ Billioux, A., Verlander, K., Anthony, S., & Alley, D. 
(2017). Standardized Screening for Health-Related Social Needs in 
Clinical Settings: The Accountable Health Communities Screening 
Tool. NAM Perspectives, 7(5). Available at: https://doi.org/10.31478/201705b.
    \113\ Shier, G., Ginsburg, M., Howell, J., Volland, P., & 
Golden, R. (2013). Strong Social Support Services, Such as 
Transportation And Help For Caregivers, Can Lead To Lower Health 
Care Use And Costs. Health Affairs, 32(3), 544-551. Available at: 
https://doi.org/10.1377/hlthaff.2012.0170.
    \114\ https://www.nami.org/Advocacy/Policy-Priorities/Supporting-Community-Inclusion-and-Non-Discrimination/Medicaid-Non-Emergency-Medical-Transportation.
    \115\ Baxter, A., Tweed, E., Katikireddi, S., Thomson, H. 
(2019). Effects of Housing First approaches on health and well-being 
of adults who are homeless or at risk of homelessness: systematic 
review and meta-analysis of randomized controlled trials. Journal of 
Epidemiology and Community Health, 73; 379-387. Available at: 
https://jech.bmj.com/content/jech/73/5/379.full.pdf.
    \116\ Wright, B.J., Vartanian, K.B., Li, H.F., Royal, N., & 
Matson, J.K. (2016). Formerly Homeless People Had Lower Overall 
Health Care Expenditures After Moving into Supportive Housing. 
Health Affairs, 35(1), 20-27. Available at: https://doi.org/10.1377/hlthaff.2015.0393.
    \117\ Billioux, A., Verlander, K., Anthony, S., & Alley, D. 
(2017). Standardized Screening for Health-Related Social Needs in 
Clinical Settings: The Accountable Health Communities Screening 
Tool. NAM Perspectives, 7(5). Available at: https://doi.org/10.31478/201705b.
    \118\ Henry M., de Sousa, T., Roddey, C., Gayen, S., Bednar, T.; 
Abt Associates. The 2020 Annual Homeless Assessment Report (AHAR) to 
Congress; Part 1: Point-in-Time Estimates of Homelessness, January 
2021. U.S. Department of Housing and Urban Development. Accessed 
November 24, 2021. Available at: https://www.huduser.gov/portal/sites/default/files/pdf/2020-AHAR-Part-1.pdf.
    \119\ Larimer, M.E. (2009). Health Care and Public Service Use 
and Costs Before and After Provision of Housing for Chronically 
Homeless Persons with Severe Alcohol Problems. JAMA, 301(13), 1349. 
Available at: https://doi.org/10.1001/jama.2009.414.
    \120\ https://ajph.aphapublications.org/doi/abs/10.2105/AJPH.2013.301680.

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[[Page 21282]]

    If also adopted in the IPFQR Program, these two Social Drivers of 
Health measures (that is, the Screening for Social Drivers of Health 
measure being proposed for adoption in this section and the Screen 
Positive Rate for Social Drivers of Health measure being proposed for 
adoption in section V.D.4 of this proposed rule) would support 
identification of specific risk factors for inadequate healthcare 
access and adverse health outcomes among patients. We note that these 
measures would enable systematic collection of HRSNs data. This 
activity aligns with our other efforts beyond the acute care setting, 
including the CY 2023 Medicare Advantage and Part D final rule in which 
we finalized the policy requiring that all Special Needs Plans (SNPs) 
include one or more questions on housing stability, food security, and 
access to transportation in their health risk assessment using 
questions from a list of screening instruments specified in sub-
regulatory guidance (87 FR 27726 through 27740) as well as the CY 2023 
Physician Fee Schedule (PFS) final rule in which we adopted the 
Screening for Social Drivers of Health measure in the Merit-based 
Incentive Payment System (MIPS) Program (87 FR 70054 through 70055).
    The proposed Social Drivers of Health measures (as set forth in 
this section V.D.3 and section V.D.4. of this proposed rule) would 
encourage IPFs to identify patients with HRSNs, who are known to 
experience the greatest risk of poor health outcomes, thereby improving 
the accuracy of high-risk prediction calculations. Improvement in risk 
prediction has the potential to reduce healthcare access barriers, 
address the disproportionate expenditures attributed to people with 
greatest risk, and improve the IPF's quality of 
care.121 122 123 124 Further, these data could guide future 
public and private resource allocation to promote targeted 
collaboration among IPFs, health systems, community-based 
organizations, and others in support of improving patient outcomes. We 
believe that this screening is especially important for IPF patients 
because patients with psychiatric conditions have an increased risk of 
having HRSNs.\125\
---------------------------------------------------------------------------

    \121\ Baker, MC, Alberti, PM, et al. (2021). Social Determinants 
Matter for Hospital Readmission Policy: Insights From New York City. 
Health Affairs, 40(4), 645-654. Available at: https://doi.org/10.1377/hlthaff.2020.01742. Accessed on February 20, 2023.
    \122\ Hammond, G., Johnston, K., et al. (2020). Social 
Determinants of Health Improve Predictive Accuracy of Clinical Risk 
Models for Cardiovascular Hospitalization, Annual Cost, and Death. 
Circulation: Cardiovascular Quality and Outcomes, 13 (6) 290-299. 
Available at: https://doi.org/10.1161/CIRCOUTCOMES.120.006752. 
Accessed on February 20, 2023.
    \123\ Hill-Briggs, F. (2021). Social Determinants of Health and 
Diabetes: A Scientific Review. Diabetes Care. Available at: https://diabetesjournals.org/care/article/44/1/258/33180/Social-Determinants-of-Health-and-Diabetes-A. Accessed on February 20, 
2023.
    \124\ Jaffrey, J.B., Safran, G.B., Addressing Social Risk 
Factors in Value-Based Payment: Adjusting Payment Not Performance to 
Optimize Outcomes and Fairness. Health Affairs Blog, April 19, 2021. 
Available at: https://www.healthaffairs.org/do/10.1377/forefront.20210414.379479/full/. Accessed on February 20, 2023.
    \125\ Adepoju, OE, Liaw, W, et al. (2022) Assessment of Unmet 
Health-Related Social Needs Among Patients with Mental Illness 
Enrolled in Medicare Advantage. Available at: https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2798096. 
Accessed on December 7, 2022.
---------------------------------------------------------------------------

    In the FY 2023 IPF PPS final rule, we observed that the Hospital 
IQR Program had proposed two Social Drivers of Health measures and 
stated that we would consider these measures for the IPFQR Program in 
the future (87 FR 46873). The first of these two measures is the 
Screening for Social Drivers of Health measure, which assesses the 
percent of patients admitted to the hospital who are 18 years or older 
at time of admission and are screened for food insecurity, housing 
instability, transportation needs, utility difficulties, and 
interpersonal safety.
    Utilization of screening tools to identify the burden of unmet 
HRSNs can be a helpful first step for IPFs in identifying necessary 
community partners and connecting individuals to resources in their 
communities. We believe collecting data across the same five HRSN 
domains that were screened under the AHC Model and adopted for acute 
care hospitals in the Hospital IQR Program would illuminate their 
impact on health outcomes and disparities and the healthcare cost 
burden for IPFs, particularly for IPFs that serve patients with 
disproportionately high levels of social risk, given that patients with 
serious mental illness are especially vulnerable to and affected by 
HRSNs. In addition, data collection in the IPF care setting could 
inform meaningful and sustainable solutions for provider-types 
participating in other quality reporting programs to close equity gaps 
among the communities they serve.\126\ \127\ \128\ \129\ \130\
---------------------------------------------------------------------------

    \126\ The Physicians Foundation: 2020 Survey of America's 
Patients, Part Three. Available at: https://physiciansfoundation.org/wp-content/uploads/2020/10/2020-Physicians-Foundation-Survey-Part3.pdf.
    \127\ Office of the Assistant Secretary for Planning and 
Evaluation (ASPE) (2020). Report to Congress: Social Risk Factors 
and Performance Under Medicare's Value-Based Purchasing Program 
(Second of Two Reports). Available at: https://aspe.hhs.gov/pdf-report/second-impact-report-to-congress.
    \128\ Billioux, A., Verlander, K., Anthony, S., & Alley, D. 
(2017). Standardized Screening for Health-Related Social Needs in 
Clinical Settings: The Accountable Health Communities Screening 
Tool. NAM Perspectives, 7(5). Available at: https://doi.org/10.31478/201705b.
    \129\ Baker, M.C., Alberti, P.M., Tsao, T.Y., Fluegge, K., 
Howland, R.E., & Haberman, M. (2021). Social Determinants Matter for 
Hospital Readmission Policy: Insights From New York City. Health 
Affairs, 40(4), 645-654. Available at: https://doi.org/10.1377/hlthaff.2020.01742.
    \130\ De Marchis, E., Knox, M., Hessler, D., Willard-Grace, R., 
Oliyawola, JN, et al. (2019). Physician Burnout and Higher Clinic 
Capacity to Address Patients' Social Needs. The Journal of the 
American Board of Family Medicine, 32 (1), 69-78.
---------------------------------------------------------------------------

    For data collection of the proposed Screening for Social Drivers of 
Health measure, IPFs could use a self-selected screening tool and 
collect these data in multiple ways, which can vary to accommodate the 
population they serve and their individual needs. One example of a 
potential screening tool for IPFs to collect data on the proposed 
Screening for Social Drivers Health Measure is the AHC Model's standard 
10-item AHC Health-Related Social Needs Screening Tool (AHC HRSN 
Screening Tool), which enables providers to identify HRSNs in the five 
core domains (described in Table 18) among community-dwelling Medicare, 
Medicaid, and dually eligible beneficiaries. The AHC Model, including 
its screening tool, was tested across many care delivery sites in 
diverse geographic locations across the United States. More than one 
million Medicare and Medicaid beneficiaries have been screened using 
the AHC HRSN Screening Tool, which was evaluated psychometrically and 
demonstrated evidence of both reliability and validity, including 
inter-rater reliability and concurrent and

[[Page 21283]]

predictive validity. Moreover, the AHC HRSN Screening Tool can be 
implemented in a variety of places where patients seek healthcare, 
including inpatient psychiatric facilities.
    The intent of the proposed Screening for Social Drivers of Health 
measure is to promote adoption of HRSN screening by IPFs. We encourage 
IPFs to use the screening as a basis for developing their own 
individual action plans (for example, navigation services and 
subsequent referral), as well as an opportunity to initiate or improve 
partnerships with community-based service providers. We believe that 
this proposed measure would yield actionable information to close 
equity gaps by encouraging IPFs to identify patients with HRSNs, with a 
reciprocal goal of strengthening linkages between IPFs and local 
community-based partners to promptly connect patients and families to 
the support they need.
    Both the proposed Screening for Social Drivers of Health measure 
and the proposed Screen Positive Rate for Social Drivers of Health 
measure, discussed in V.D.4. of this proposed rule, address our 
Meaningful Measures Framework's \131\ quality priority of ``Work with 
Communities to Promote Best Practices of Healthy Living'' through the 
Meaningful Measures Area of ``Equity of Care.'' Additionally, pursuant 
to our Meaningful Measures 2.0, these proposed Social Drivers of Health 
measures address the equity priority area and align with our commitment 
to introduce plans to close health equity gaps and promote equity 
through quality measures, including to ``develop and implement measures 
that reflect social and economic determinants.'' \132\ Development and 
proposal of these measures also align with our strategic pillar to 
advance health equity by addressing the health disparities that 
underlie our health system.\133\ Further, proposal of these measures 
aligns with these measures' adoption in the Hospital IQR Program in the 
FY 2023 IPPS/LTCH final rule (87 FR 49202 through 49215).
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    \131\ Centers for Medicare & Medicaid Services. Meaningful 
Measures Framework. Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/CMS-Quality-Strategy.
    \132\ Centers for Medicare & Medicaid Services. Meaningful 
Measures 2.0: Moving from Measure Reduction to Modernization. 
Available at: https://www.cms.gov/meaningful-measures-20-moving-measure-reduction-modernization.
    \133\ Brooks-LaSure, C. (2021). My First 100 Days and Where We 
Go From Here: A Strategic Vision for CMS. Available at: https://www.cms.gov/blog/my-first-100-days-and-where-we-go-here-strategic-vision-cms.
---------------------------------------------------------------------------

    The proposed Screening for Social Drivers of Health measure 
(alongside the proposed Screen Positive Rate for Social Drivers of 
Health measure described in section V.D.4 of this proposed rule) would 
be the first measurement of social drivers of health in the IPFQR 
Program. We believe this proposed measure is appropriate for 
measurement of the quality of care furnished by IPFs. Screening 
patients for HRSNs during inpatient hospitalization in an IPF would 
allow healthcare providers, including IPFs, to identify and potentially 
help address HRSNs for this medically underserved patient population as 
part of discharge planning and contribute to long-term improvements in 
patient outcomes. Identifying and addressing HRSNs for patients 
receiving care in IPFs could have a direct and positive impact on IPFs' 
quality performance because of improvements in patient outcomes that 
could occur when patients' HRSNs are reduced. Moreover, collecting 
aggregate data on the HRSNs of IPF patient populations via this 
proposed measure is crucial in informing design of future measures that 
could enable us to set appropriate performance targets for IPFs with 
respect to closing the gap on health equity.
b. Overview of Measure
    The proposed Screening for Social Drivers of Health measure would 
assess whether an IPF implements screening for all patients who are 18 
years or older at time of admission for food insecurity, housing 
instability, transportation needs, utility difficulties, and 
interpersonal safety. To report on this proposed measure, IPFs would 
provide: (1) the number of inpatients admitted to the facility who are 
18 years or older at time of admission and who are screened for all of 
the five HRSNs (food insecurity, housing instability, transportation 
needs, utility difficulties, and interpersonal safety); and (2) the 
total number of patients who are admitted to the facility who are 18 
years or older on the date they are admitted.
    Measure specifications for the proposed Screening for Social 
Drivers of Health measure, which were available during the review of 
the MUC List, are available at https://mmshub.cms.gov/sites/default/files/map-hospital-measure-specifications-manual-2022.pdf.
(1) Measure Calculation
(a) Cohort
    The proposed Screening for Social Drivers of Health measure would 
assess the total number of patients aged 18 years and older, screened 
for social risk factors (specifically, food insecurity, housing 
instability, transportation needs, utility difficulties, and 
interpersonal safety) during an IPF stay.
(b) Numerator
    The numerator of the proposed Screening for Social Drivers of 
Health measure consists of the number of patients admitted to an IPF 
stay who are 18 years or older on the date of admission and are 
screened during their IPF stay for all of the following five HRSNs: 
food insecurity, housing instability, transportation needs, utility 
difficulties, and interpersonal safety.
(c) Denominator
    The denominator of the proposed Screening for Social Drivers of 
Health measure consists of the number of patients who are admitted to 
an IPF stay and who are 18 years or older on the date of admission. The 
following patients would be excluded from the denominator: (1) patients 
who opt-out of screening; and (2) patients who are themselves unable to 
complete the screening during their inpatient stay and have no legal 
guardian or caregiver able to do so on the patient's behalf during 
their inpatient stay.
(d) Calculation
    The proposed Screening for Social Drivers of Health measure would 
be calculated as the number of patients admitted to an IPF stay who are 
18 years or older on the date of admission screened for all five HRSNs 
(food insecurity, housing instability, transportation needs, utility 
difficulties, and interpersonal safety) divided by the number of 
patients 18 years or older on the date of admission admitted to the 
IPF.
(2) Review by the Measure Applications Partnership
    We included the proposed Screening for Social Drivers of Health 
measure on the publicly available ``List of Measures Under 
Consideration for December 1, 2022'' (MUC List), a list of measures 
under consideration for use in various Medicare programs.\134\ The CBE-

[[Page 21284]]

convened MAP Health Equity Advisory Group reviewed the MUC List 
including the proposed Screening for Social Drivers of Health measure 
(MUC 2022-053) in detail on December 6 through 7, 2022.\135\ The MAP 
Health Equity Advisory Group expressed support for the collection of 
data related to social drivers of health, but raised concerns regarding 
public reporting of these data and potential repetition of asking 
patients the same questions across settings.\136\
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    \134\ Centers for Medicare & Medicaid Services. List of Measures 
Under Consideration for December 1, 2022. Available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \135\ Centers for Medicare & Medicaid Services. 2022-2023 MAP 
Final Recommendations. Available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \136\ Centers for Medicare & Medicaid Services. 2022-2023 MAP 
Final Recommendations. Available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
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    In addition, on December 8 through 9, 2022, the MAP Rural Health 
Advisory Group reviewed the 2022 MUC List and the MAP Hospital 
Workgroup did so on December 13 through 14, 2022.\137\ The MAP Rural 
Health Advisory Group noted some potential reporting challenges 
including the potential masking of health disparities that are 
underrepresented in some areas and that sample size and populations 
served may be an issue, but expressed that the proposed measure serves 
as a starting point to determine where screening is occurring. The MAP 
Hospital Workgroup expressed strong support for the measure but noted 
that interoperability will be important and cautioned about survey 
fatigue. The MAP Hospital Workgroup members conditionally supported the 
measure pending: (1) testing of the measure's reliability and validity; 
(2) endorsement by the CBE; (3) additional details on how potential 
tools map to the individual HRSNs, as well as best practices; (4) 
identification of resources that may be available to assist patients 
with identified HRSNs; and (5) the measure's alignment with data 
standards, particularly the GRAVITY project.\138\ The GRAVITY project's 
mission statement is ``to serve as the open public collaborative 
advancing health and social data standardization for health equity.'' 
\139\ Thereafter, the MAP Coordinating Committee deliberated on January 
24 through 25, 2023, and ultimately voted to uphold the MAP Hospital 
Workgroup's recommendation to conditionally support for rulemaking with 
the same conditions.\140\
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    \137\ Centers for Medicare & Medicaid Services. 2022-2023 MAP 
Final Recommendations. Available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \138\ Centers for Medicare & Medicaid Services. 2022-2023 MAP 
Final Recommendations. Available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \139\ https://thegravityproject.net/.
    \140\ Centers for Medicare & Medicaid Services. 2022-2023 MAP 
Final Recommendations. Available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
---------------------------------------------------------------------------

    We believe this measure establishes an important foundation for 
prioritizing the achievement of health equity among IPFs. Our approach 
to developing health equity measures is incremental, and we believe 
that health care equity outcomes in the IPFQR Program will inform 
future efforts to advance and achieve health care equity by IPFs. We 
additionally believe this measure to be a building block that lays the 
groundwork for a future meaningful suite of measures that would assess 
IPF progress in providing high-quality healthcare for all patients, 
regardless of social risk factors or demographic characteristics.
(3) CBE Endorsement
    We have not submitted this measure for CBE endorsement at this 
time. Although section 1886(s)(4)(D)(i) of the Act generally requires 
that measures specified by the Secretary shall be endorsed by the 
entity with a contract under section 1890(a) of the Act, section 
1886(s)(4)(D)(ii) of the Act, states that in the case of a specified 
area or medical topic determined appropriate by the Secretary for which 
a feasible and practical measure has not been endorsed by the entity 
with a contract under section 1890(a) of the Act, the Secretary may 
specify a measure that is not so endorsed as long as due consideration 
is given to a measure that has been endorsed or adopted by a consensus 
organization identified by the Secretary. We reviewed CBE-endorsed 
measures and were unable to identify any other CBE-endorsed measures on 
this topic, and therefore, we believe the exception in section 
1886(s)(4)(D)(ii) of the Act applies.
c. Data Collection, Submission and Reporting
    We believe incremental implementation of the proposed Screening for 
Social Drivers of Health measure, by permitting one year of voluntary 
reporting prior to required reporting, would allow IPFs who are not yet 
screening patients for HRSNs to get experience with collecting data for 
this proposed measure and equally allow IPFs who already undertake 
screening efforts to report data already being collected. Therefore, we 
propose voluntary reporting of this measure beginning with the data 
collected in CY 2024, which would be reported to CMS in CY 2025, 
followed by required reporting beginning with data collected in CY 
2025, which would be reported to CMS in CY 2026 for the FY 2027 payment 
determination.
    Due to variability across IPFs and the populations they serve, and 
in alignment with the Hospital IQR Program, we would allow IPFs 
flexibility with selection of tools to screen patients for food 
insecurity, housing instability, transportation needs, utility 
difficulties, and interpersonal safety. Potential sources of these data 
could include, for example, administrative claims data, electronic 
clinical data, standardized patient assessments, or patient-reported 
data and surveys.
    Multiple screening tools for health-related social needs (HRSNs) 
already exist. For additional information on resources, we refer 
readers to evidence-based resources like the Social Interventions 
Research and Evaluation Network (SIREN) website, for example, for 
comprehensive information about the most widely used HRSN screening 
tools.141 142 SIREN contains descriptions of the content and 
characteristics of various tools, including information about intended 
populations, completion time, and number of questions.
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    \141\ Social Interventions Research & Evaluation Network. 
(2019). Social Needs Screening Tool Comparison Table. Available at: 
https://sirenetwork.ucsf.edu/tools-resources/resources/screening-tools-comparison. Accessed January 18, 2021.
    \142\ The Social Interventions Research and Evaluation Network 
(SIREN) at University of California San Francisco was launched in 
the spring of 2016 to synthesize, disseminate, and catalyze research 
on SDOH and healthcare delivery.
---------------------------------------------------------------------------

    We would encourage IPFs to consider digital standardized screening 
tools and refer readers to the FY 2023 IPPS/LTCH PPS final rule (87 FR 
49207 through 49208) where we discuss how the use of certified health 
information technology (IT), including but not limited to certified EHR 
technology, can support capture of HRSN information in an interoperable 
fashion so that these data can be shared across the care continuum to 
support coordinated care. We also encourage readers to learn about the 
United States Core Data for Interoperability (USCDI) standard used in 
certified health IT and how this standard can support interoperable 
exchange of health and HRSN assessment data.\143\
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    \143\ Office of the National Coordinator for Health IT (ONC). 
United States Core Data for Interoperability. Accessed at: https://www.healthit.gov/isa/united-states-core-data-interoperability-uscdi.

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[[Page 21285]]

    We propose that IPFs would report aggregate data on this measure, 
that is IPFs would report aggregated data for the numerator and the 
denominator to CMS (as described in section V.D.3.b.(1). of this 
proposed rule) but would not be required to report patient-level data. 
IPFs are required to submit information for chart-abstracted measures 
once annually using a CMS-approved web-based data collection tool 
available within the HQR System (previously referred to as the 
QualityNet Secure Portal). We refer readers to section V.I. of the 
preamble of this proposed rule (Form, Manner, and Timing of Quality 
Data Submission) for more details on our previously finalized data 
submission and deadline requirements across measure types.
    We invite public comment on this proposal.
4. Proposal To Adopt the Screen Positive Rate for Social Drivers of 
Health Measure Beginning With Voluntary Reporting of CY 2024 Data and 
Followed by Required Reporting Beginning With CY 2025 Data/FY 2027 
Payment Determination
a. Background
    The impact of social risk factors on health outcomes has been well-
established in the literature.144 145 146 147 148 The 
Physicians Foundation reported that 73 percent of the physician 
respondents to the 2021 iteration of their annual survey agreed that 
social risk factors like housing instability and food insecurity would 
drive health services demand.\149\ Recognizing the need for a more 
comprehensive approach to eliminating the health equity gap, we have 
prioritized quality measures that would capture social risk factors and 
facilitate assessment of their impact on health outcomes and 
disparities and healthcare utilization and costs.150 151 152 
Specifically, in the inpatient setting, we aim to encourage systematic 
identification of patients' HRSNs (as defined in section V.D.3.a. of 
this proposed rule) as part of discharge planning with the intention of 
promoting linkages with relevant community-based services that address 
those needs and support improvements in health outcomes following 
discharge from the IPF.
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    \144\ Institute of Medicine 2014. Capturing Social and 
Behavioral Domains and Measures in Electronic Health Records: Phase 
2. Washington, DC: The National Academies Press. Available at: 
https://doi.org/10.17226/18951.
    \145\ Centers for Medicare & Medicaid Services. (2021). 
Accountable Health Communities Model. Accountable Health Communities 
Model  CMS Innovation Center. Available at: https://innovation.cms.gov/innovation-models/ahcm. Accessed November 23, 
2021.
    \146\ Kaiser Family Foundation. (2021). Racial and Ethnic Health 
Inequities and Medicare. Available at: https://www.kff.org/medicare/report/racial-and-ethnic-health-inequities-and-medicare/. Accessed 
November 23, 2021.
    \147\ Milkie Vu et al. Predictors of Delayed Healthcare Seeking 
Among American Muslim Women, Journal of Women's Health 26(6) (2016) 
at 58; Nadimpalli SB, Cleland CM, Hutchinson MK, Islam N, Barnes LL, 
Van Devanter N. (2016) The Association between Discrimination and 
the Health of Sikh Asian Indians. Health Psychology, 35(4), 351-355. 
https://doi.org/10.1037/hea0000268.
    \148\ Office of the Assistant Secretary for Planning and 
Evaluation (ASPE). (2020). Report to Congress: Social Risk Factors 
and Performance Under Medicare's Value-Based Purchasing Program 
(Second of Two Reports). Available at: https://aspe.hhs.gov/pdf-report/second-impact-report-to-congress.
    \149\ The Physicians Foundation. (2020) 2020 Survey of America's 
Patients, Part Three. Available at: https://physiciansfoundation.org/wp-content/uploads/2020/10/2020-Physicians-Foundation-Survey-Part3.pdf.
    \150\ Alley, D.E., C.N. Asomugha, P.H. Conway, and D.M. 
Sanghavi. 2016. Accountable Health Communities--Addressing Social 
Needs through Medicare and Medicaid. The New England Journal of 
Medicine 374(1):8-11. Available at: https://doi.org/10.1056/NEJMp1512532.
    \151\ Centers for Medicare & Medicaid Services. (2021). 
Accountable Health Communities Model. Accountable Health Communities 
Model CMS Innovation Center. Available at: https://innovation.cms.gov/innovation-models/ahcm. Accessed November 23, 
2021.
    \152\ Billioux, A., Verlander, K., Anthony, S., & Alley, D. 
(2017). Standardized Screening for Health-Related Social Needs in 
Clinical Settings: The Accountable Health Communities Screening 
Tool. NAM Perspectives, 7(5). Available at: https://doi.org/10.31478/201705b.
---------------------------------------------------------------------------

    While the Screening for Social Drivers of Health measure (discussed 
previously in section V.D.3. of this proposed rule) enables 
identification of individuals with HRSNs, use of the proposed Screen 
Positive Rate for Social Drivers of Health measure would allow IPFs to 
capture the magnitude of these needs and even estimate the impact of 
individual-level HRSNs on healthcare utilization when evaluating 
quality of care.153 154 155 The proposed Screen Positive 
Rate for Social Drivers of Health measure would require IPFs to report 
the rates of patients who screened positive for each of the five core 
HRSNs. Reporting the screen positive rate for each of the five core 
HRSNs would inform actionable planning by IPFs towards closing health 
equity gaps unique to the populations they serve and enable the 
development of individual patient action plans (including navigation 
and referral services).
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    \153\ Baker, M.C., Alberti, P.M., Tsao, T.Y., Fluegge, K., 
Howland, R.E., & Haberman, M. (2021). Social Determinants Matter for 
Hospital Readmission Policy: Insights From New York City. Health 
Affairs, 40(4), 645-654. Available at: https://doi.org/10.1377/hlthaff.2020.01742.
    \154\ CMS. Accountable Health Communities Model. Accountable 
Health Communities Model CMS Innovation Center. Available at: 
https://innovation.cms.gov/innovation-models/ahcm. Accessed November 
23, 2021.
    \155\ Hammond, G., Johnston, K., Huang, K., Joynt Maddox, K. 
(2020). Social Determinants of Health Improve Predictive Accuracy of 
Clinical Risk Models for Cardiovascular Hospitalization, Annual 
Cost, and Death. Circulation: Cardiovascular Quality and Outcomes, 
13 (6) 290-299. Available at: https://doi.org/10.1161/CIRCOUTCOMES.120.006752.
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    In the FY 2022 IPF PPS final rule (86 FR 42625 through 42632) and 
the FY 2023 IPF PPS final rule (87 FR 46865 through 46873), we 
discussed our ongoing consideration of potential approaches that could 
be implemented to address health equity through the IPFQR Program. As a 
result of the feedback we received, we identified the Screen Positive 
Rate for Social Drivers of Health measure to help inform efforts to 
address health equity.
    This proposed measure would assess the percent of patients admitted 
to the IPF who are 18 years or older at time of admission who were 
screened for HRSNs and who screen positive for one or more of the core 
HRSNs, including food insecurity, housing instability, transportation 
needs, utility difficulties, or interpersonal safety (reported as five 
separate rates).\156\
---------------------------------------------------------------------------

    \156\ Billioux, A., Verlander, K., Anthony, S., & Alley, D. 
(2017). Standardized Screening for Health Related Social Needs in 
Clinical Settings: The Accountable Health Communities Screening 
Tool. NAM Perspectives, 7(5). Available at: https://doi.org/10.31478/201705b.
---------------------------------------------------------------------------

    We refer readers to section V.D.3 of this proposed rule where we 
previously discussed the screening and identification process resulting 
in the selection of these five domains associated with the proposed 
Screen for Social Drivers of Health measure. The proposed Screening for 
Social Drivers of Health measure forms the basis of this proposed 
Screen Positive Rate for Social Drivers of Health measure. That is, the 
number of patients screened for all five HRSNs in the Screening for 
Social Drivers of Health measure is the denominator of the Screen 
Positive for Social Drivers of Health measure described here.
    The COVID-19 pandemic underscored the overwhelming impact that 
these five core domains of HRSNs have on disparities, health risk, 
healthcare access, and health outcomes, including premature 
mortality.157 158

[[Page 21286]]

Adoption of the Screen Positive Rate for Social Drivers of Health 
measure would encourage IPFs to track prevalence of specific HRSNs 
among patients over time and use the data to stratify risk as part of 
quality performance improvement efforts. This proposed measure may also 
prove useful for patients by providing data transparency and signifying 
IPFs' familiarity, expertise, and commitment regarding these health 
equity issues. This proposed measure also has the potential to reduce 
healthcare provider burden and burnout, including among IPFs and their 
staff, by both acknowledging patients' non-clinical needs that 
nevertheless greatly contribute to adverse clinical outcomes and 
linking providers with community-based organizations to enhance 
patient-centered treatment and discharge 
planning.159 160 161 Finally, we believe the proposed Screen 
Positive Rate for Social Drivers of Health measure has the potential to 
facilitate data-informed collaboration with community-based services 
and focused community investments, including the development of 
pathways and infrastructure to connect patients to local community 
resources.
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    \157\ Kaiser Family Foundation. (2021). Racial and Ethnic Health 
Inequities and Medicare. Available at: https://www.kff.org/medicare/report/racial-and-ethnic-health-inequities-and-medicare/. Accessed 
November 23, 2021.
    \158\ Centers for Disease Control and Prevention. (2019). CDC 
COVID-19 Response Health Equity Strategy: Accelerating Progress 
Towards Reducing COVID-19 Disparities and Achieving Health Equity. 
July 2020. Available at: https://www.cdc.gov/coronavirus/2019-ncov/community/health-equity/cdc-strategy.html. Accessed November 17, 
2021.
    \159\ The Physicians Foundation. (2020). Survey of America's 
Patients, Part Three. Available at: https://physiciansfoundation.org/wp-content/uploads/2020/10/2020-Physicians-Foundation-Survey-Part3.pdf.
    \160\ De Marchis, E., Knox, M., Hessler, D., WillardGrace, R., 
Oliyawola, JN, et al. (2019). Physician Burnout and Higher Clinic 
Capacity to Address Patients' Social Needs. The Journal of the 
American Board of Family Medicine, 32 (1), 69-78.
    \161\ Kung, A., Cheung, T., Knox, M., Willard-Grace, R., 
Halpern, J., et.al, (2019). Capacity to Address Social Needs Affect 
Primary Care Clinician Burnout. Annals of Family Medicine. 17 (6), 
487-494. Available at: https://doi.org/10.1370/afm.2470.
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    Ultimately, we are focused on supporting effective and sustainable 
collaboration between healthcare delivery and local community-based 
services organizations to meet the unmet needs of people they serve. 
Reporting data from both the Screening for Social Drivers of Health and 
the Screen Positive Rate for Social Drivers of Health measures would 
enable both identification and quantification of the levels of HRSNs 
among communities served by IPFs. These two Social Drivers of Health 
measures harmonize, as it is important to know both whether screening 
occurred and the results from the screening in order to develop 
sustainable solutions. We believe that there are multiple benefits to 
increasing IPFs' understanding of their patients' HRSNs. First, we 
believe that this could lead to increased clinical-community 
collaborations and an associated increase in system capacity and 
community investments. Second, we believe this in turn could yield a 
net reduction in costly healthcare utilization by promoting more 
appropriate healthcare service consumption.\162\
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    \162\ Centers for Medicare & Medicaid Services. (2021). 
Accountable Health Communities Model. Accountable Health Communities 
Model [bond] CMS Innovation Center. Available at: https://innovation.cms.gov/innovation-models/ahcm. Accessed November 23, 
2021.
---------------------------------------------------------------------------

    Pursuant to our Meaningful Measures 2.0 Framework and in alignment 
with the measures previously adopted for hospitals participating in the 
Hospital IQR Program, the proposed Screen Positive Rate for Social 
Drivers of Health measure would address the equity priority area and 
align with our commitment to introduce plans to close health equity 
gaps and promote equity through quality measures, including to 
``develop and implement measures that reflect social and economic 
determinants.'' \163\ Under our Meaningful Measures Framework, the 
Screen Positive Rate for Social Drivers of Health measure would address 
the quality priority of ``Work with Communities to Promote Best 
Practices of Healthy Living'' through the Meaningful Measures Area of 
``Equity of Care.'' \164\ Adoption of this proposed measure would also 
align with our strategic pillar to advance health equity by addressing 
the health disparities that underlie our health system.\165\
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    \163\ Centers for Medicare & Medicaid Services. Meaningful 
Measures 2.0: Moving from Measure Reduction to Modernization. 
Available at: https://www.cms.gov/meaningful-measures-20-moving-measure-reduction-modernization.
    \164\ Centers for Medicare & Medicaid Services. (2021). CMS 
Measures Management System Blueprint (Blueprint v 17.0). Available 
at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/MMS/MMS-Blueprint.
    \165\ Brooks-LaSure, C. (2021). My First 100 Days and Where We 
Go From Here: A Strategic Vision for CMS. Available at: https://www.cms.gov/blog/my-first-100-days-and-where-we-go-here-strategic-vision-cms.
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b. Overview of Measure
    The proposed Screen Positive Rate for Social Drivers of Health 
measure is intended to enhance standardized data collection that can 
identify individuals who are at higher risk for poor health outcomes 
related to HRSNs who would benefit from connection via the IPF to 
targeted community-based services.\166\ The proposed measure would 
identify the proportion of patients who screened positive for one or 
more of the following five HRSNs on the date of admission to the IPF: 
food insecurity, housing instability, transportation needs, utility 
difficulties, and interpersonal safety.
---------------------------------------------------------------------------

    \166\ Centers for Medicare & Medicaid Services. (2021). A Guide 
to Using the Accountable Health Communities Health-Related Social 
Needs Screening Tool: Promising Practices and Key Insights (June 
2021). Available at: https://innovation.cms.gov/media/document/ahcm-screeningtool-companion. Accessed November 23, 2021.
---------------------------------------------------------------------------

    Consistent with the Hospital IQR Program, which adopted this 
measure in the FY 2023 IPPS/LTCH PPS final rule (87 FR 49215 through 
49220), we would require IPFs to report this measure as five separate 
rates. Specifically, IPFs would report the number of patients who 
screened positive for food insecurity, the number of patients who 
screened positive for housing instability, the number of patients who 
screened positive for transportation needs, the number of patients who 
screened positive for utility difficulties, and the number of patients 
who screened positive for interpersonal safety. We note that this 
measure is intended to provide information to IPFs on the level of 
unmet HRSNs among patients served, and not for comparison between IPFs.
    The specifications for the proposed Screen Positive Rate for Social 
Drivers of Health measure, which were available during the review of 
the MUC List, are available at: https://mmshub.cms.gov/sites/default/files/map-hospital-measure-specifications-manual-2022.pdf.
(1) Measure Calculation
(a) Cohort
    The proposed Screen Positive Rate for Social Drivers of Health is a 
process measure that would provide information on the percent of 
patients, 18 years or older on the date of admission for an IPF stay, 
who were screened for an HRSN, and who screen positive for one or more 
of the following five HRSNs: food insecurity; housing instability; 
transportation needs; utility difficulties; or interpersonal safety.
(b) Numerator
    The numerator would consist of the number of patients admitted for 
an IPF stay who are 18 years or older on the date of admission, who 
were screened for an HRSN, and who screen positive for having an unmet 
need in one or more of the following five HRSNs (calculated 
separately): The number of patients who screened positive for food 
insecurity, the number of patients who screened positive for housing 
instability, the number of patients who screened positive for 
transportation needs, the number of patients who screened positive for 
utility difficulties, and the number of patients who

[[Page 21287]]

screened positive for interpersonal safety. IPFs would report the 
number of patients who screened positive for having unmet needs in each 
of the five HRSNs as a separate numerator. A patient who screened 
positive for more than one unmet HRSN would be included in the 
numerator for each of those HRSNs. For example, a patient who screened 
positive for food insecurity, housing instability, and transportation 
needs would be included in each of these numerators.
(c) Denominator
    The denominator would consist of the number of patients admitted 
for an IPF stay who are 18 years or older on the date of admission and 
are screened for an HRSN (food insecurity, housing instability, 
transportation needs, utility difficulties and interpersonal safety) 
during their IPF stay. The following patients would be excluded from 
the denominator: (1) patients who opt-out of screening; and (2) 
patients who are themselves unable to complete the screening during 
their inpatient stay and have no caregiver able to do so on the 
patient's behalf during their inpatient stay.
(d) Calculation
    The result of this measure would be calculated as five separate 
rates. Each rate is derived from the number of patients admitted for an 
IPF stay and who are 18 years or older on the date of admission, 
screened for an HRSN, and who screen positive for each of the five 
HRSNs (that is, the number of patients who screened positive for food 
insecurity, the number of patients who screened positive for housing 
instability, the number of patients who screened positive for 
transportation needs, the number of patients who screened positive for 
utility difficulties, and the number of patients who screened positive 
for interpersonal safety) divided by the number of patients 18 years or 
older on the date of admission screened for all five HRSNs. The measure 
is reported as five separate rates--one for each HRSN, each calculated 
with the same denominator.
(2) Review by the Measure Applications Partnership
    We included the proposed Screen Positive Rate for Social Drivers of 
Health measure on the publicly available MUC List, a list of measures 
under consideration for use in various Medicare programs.\167\ The CBE-
convened MAP Health Equity Advisory Group reviewed the MUC List and the 
Screen Positive Rate for Social Drivers of Health measure (MUC 2022-
050) in detail on December 6 through 7, 2022.\168\ The MAP Health 
Equity Advisory Group expressed support for the collection of data 
related to social drivers of health, but raised concerns regarding 
public reporting of these data and potential repetition of asking 
patients the same questions across settings.\169\
---------------------------------------------------------------------------

    \167\ Centers for Medicare & Medicaid Services. List of Measures 
Under Consideration for December 1, 2022. Available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \168\ Centers for Medicare & Medicaid Services. 2022-2023 MAP 
Final Recommendations. Available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \169\ Centers for Medicare & Medicaid Services. 2022-2023 MAP 
Final Recommendations. Available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
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    In addition, on December 8 through 9, 2022, the MAP Rural Health 
Advisory Group reviewed the 2022 MUC List, which was also reviewed by 
the MAP Hospital Workgroup on December 13 through 14, 2022.\170\ The 
MAP Rural Health Advisory Group noted potential reporting challenges 
including the potential masking of health disparities that are 
underrepresented in some areas and that sample size and populations 
served may be an issue, but also expressed support that the measure 
seeks to advance the drivers of health and serves as a starting point 
to determine where screening is occurring. The MAP Hospital Workgroup 
recommended conditional support of the measure for rulemaking pending: 
(1) endorsement by the CBE to address reliability and validity 
concerns; (2) attentiveness to how results are shared and 
contextualized for public reporting; and (3) examination of any 
differences in reported rates by reporting process (that is, to assess 
whether reported rates are the same or different across IPFs and other 
facilities that may use different processes to report their data).\171\ 
Thereafter, the MAP Coordinating Committee deliberated on January 24 
through 25, 2023, and ultimately voted to conditionally support the 
Screen Positive Rate for Social Drivers of Health measure for 
rulemaking with the same conditions.\172\
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    \170\ Centers for Medicare & Medicaid Services. 2022-2023 MAP 
Final Recommendations. Available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \171\ Centers for Medicare & Medicaid Services. 2022-2023 MAP 
Final Recommendations. Available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \172\ Centers for Medicare & Medicaid Services. 2022-2023 MAP 
Final Recommendations. Available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
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    We agree with the MAP Coordinating Committee's support for the 
proposed Screen Positive Rate for Social Drivers of Health measure. We 
believe this measure, alongside the Screening for Social Drivers of 
Health measure, establishes an important foundation to prioritizing the 
achievement of health equity among IPFs participating in the IPFQR 
Program. Our approach to developing health equity measures is 
incremental, and we believe that health equity outcomes in the IPFQR 
Program will inform future efforts to advance and achieve health equity 
by IPFs. We believe this measure to be a building block that lays the 
groundwork for a future meaningful suite of measures that would assess 
IPF progress in providing high-quality healthcare for all patients, 
regardless of social risk factors or demographic characteristics.
(3) CBE Endorsement
    We have not submitted this measure for CBE endorsement at this 
time. Although section 1886(s)(4)(D)(i) of the Act generally requires 
that measures specified by the Secretary shall be endorsed by the 
entity with a contract under section 1890(a) of the Act, section 
1886(s)(4)(D)(ii) of the Act states that in the case of a specified 
area or medical topic determined appropriate by the Secretary for which 
a feasible and practical measure has not been endorsed by the entity 
with a contract under section 1890(a) of the Act, the Secretary may 
specify a measure that is not so endorsed as long as due consideration 
is given to a measure that has been endorsed or adopted by a consensus 
organization identified by the Secretary. We reviewed CBE-endorsed 
measures and were unable to identify any other CBE-endorsed measures on 
this topic; therefore, we believe the exception in section 
1886(s)(4)(D)(ii) of the Act applies.
c. Data Collection, Submission, and Reporting
    We believe incremental implementation of the proposed Screen 
Positive Rate for Social Drivers of Health measure, by permitting one 
year of voluntary reporting prior to required reporting, would allow 
IPFs who are not yet screening patients for HRSNs to get experience 
with the measure and equally allow IPFs who already undertake screening 
efforts to report

[[Page 21288]]

data already being collected. Therefore, we propose voluntary reporting 
of this measure, along with the Screening for Social Drivers of Health 
measure described in section V.D.3 of this proposed rule, beginning 
with the data collected in CY 2024, which would be reported to CMS in 
2025 followed by required reporting beginning with data collected in CY 
2025, which would be reported to CMS in 2026 and affect FY 2027 payment 
determination.
    While this measure would require IPFs to collect patient-level data 
on their patients' social drivers of health screening results, we 
propose to adopt this measure as an aggregate measure (that is, IPFs 
would be required to submit only numerator results for each of the five 
screening areas and the number of patients screened for all five of the 
HRSNs). IPFs are required to submit information for aggregate chart-
abstracted measures once annually using a CMS-approved web-based data 
collection tool available within the HQR System (previously referred to 
as the QualityNet Secure Portal). We refer readers to section V.I of 
this proposed rule (Form, Manner, and Timing of Quality Data 
Submission) for more details on our previously finalized data 
submission and deadline requirements across measure types.
    We invite public comment on this proposal.
5. Proposal To Adopt the Psychiatric Inpatient Experience (PIX) Survey 
Beginning With Voluntary Reporting of CY 2025 Data and Required 
Reporting Beginning With CY 2026 Data/FY 2028 Payment Determination
a. Background
    We believe that a comprehensive approach to quality must include 
directly reported feedback regarding facility, provider, and payer 
performance. Therefore, we have consistently stated our commitment to 
identifying an appropriate patient experience of care measure for the 
IPF setting and adopting this measure in the IPFQR Program at the first 
opportunity (77 FR 53646, 78 FR 50897, 79 FR 45964 through 45965, 80 FR 
46714 through 46715, 82 FR 38470 through 38471, 83 FR 38596, 84 FR 
38467, 85 FR 47043, 86 FR 42654 through 42656, and 87 FR 46846).
    In the FY 2014 IPPS/LTCH PPS final rule, we adopted a voluntary 
information collection regarding whether IPFs participating in the 
IPFQR Program assess patient experience of inpatient behavioral health 
services using a standardized instrument and for IPFs that answer 
``Yes'' to indicate the name of the survey that they administer (78 FR 
50896 through 50897). In the FY 2015 IPF PPS final rule, we adopted 
this information collection as the Assessment of Patient Experience of 
Care measure beginning with the FY 2016 payment determination (79 FR 
45964 through 45965). Data for CY 2016 showed that while the majority 
of IPFs (approximately 76 percent) were collecting patient experience 
of care data through a standardized instrument, there was a wide 
variation in the instrument being used. The data for CY 2016 indicated 
that the most widely used survey instrument was not in the public 
domain and was used by less than 30 percent of the IPFs that used a 
patient experience survey. In the FY 2015 IPF PPS final rule, we 
indicated our intention to adopt a standardized measure of patient 
experience of care for the IPFQR Program.
    In the FY 2019 IPF PPS final rule, we removed the Assessment of 
Patient Experience of Care measure from the IPFQR Program because we 
believed that we had collected sufficient information to inform 
development of a patient experience of care measure (83 FR 38596 
through 38597). In the FY 2020 IPF PPS final rule, we summarized our 
request for comments on our analysis of the results of the Assessment 
of Patient Experience of Care measure and feedback on potential 
adoption of the Hospital Consumer Assessment of Healthcare Providers 
and Systems (HCAHPS) survey for the IPFQR Program (84 FR 38467). In 
response to our request, many commenters expressed concern that HCAHPS 
was not specified for the IPF setting and recommended that CMS identify 
a survey that has been developed for and tested in the IPF setting. 
Furthermore, in the FY 2021 IPF PPS proposed rule, we did not propose 
any updates to the IPFQR Program; however, we received many comments 
requesting that we adopt a patient experience of care measure in the 
IPFQR Program, which we summarized in the FY 2021 IPF PPS final rule 
(85 FR 47043). We received similar input strongly advocating for a 
patient experience of care measure for the IPFQR Program in response to 
a solicitation of comments on potential measures for the IPFQR Program 
in the FY 2022 IPF PPS proposed rule, which we summarized in the FY 
2022 IPF PPS final rule (86 FR 42654 through 42656). Many of these 
comments were from patients and their families and described how 
meaningful such a measure would be for individuals who receive services 
from IPFs. Though we did not solicit input on a patient experience of 
care measure in the FY 2023 IPF PPS proposed rule, we received many 
comments strongly recommending that we adopt such a measure, which we 
summarized in the FY 2023 IPF PPS final rule (87 FR 46846). Since 
publication of the FY 2023 IPF PPS final rule, section 4125(c) of the 
Consolidated Appropriations Act, 2023 (Pub. L. 117-328) was enacted, 
which amends section 1886(s)(4) of the Act to require that the quality 
measures specified for the IPFQR Program shall include a quality 
measure of patients' perspective on care not later than the FY 2031 
payment determination.
    We have continued to review publicly available patient experience 
of care instruments to identify such an instrument specified for, and 
tested in, the IPF setting. In our review, we identified the 
Psychiatric Inpatient Experience (PIX) survey as a publicly available 
survey instrument developed for and tested in the IPF setting. Pursuant 
to the Meaningful Measures 2.0 Framework, this measure addresses the 
``Person-Centered'' priority area, as well as the ``Individual and 
Caregiver Voice'' foundation and aligns with our commitment to 
prioritize outcome and patient-reported measures.\173\ This measure 
also aligns with the CMS National Quality Strategy Goal 4 ``Foster 
Engagement.'' It also supports the Behavioral Health Strategy goal of 
``Strengthen Equity and Quality in Behavioral Health Care.'' \174\ 
Furthermore, this measure supports the new Universal Foundation domain 
of ``Person-Centered Care.'' \175\
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    \173\ Centers for Medicare & Medicaid Services. Meaningful 
Measures 2.0: Moving from Measure Reduction to Modernization. 
Available at: https://www.cms.gov/meaningful-measures-20-moving-measure-reduction-modernization.
    \174\ CMS. (2022). CMS Behavioral Health Strategy. Available at 
https://www.cms.gov/cms-behavioral-health-strategy. Accessed on 
February 20, 2023.
    \175\ https://www.nejm.org/doi/full/10.1056/NEJMp2215539.
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b. Overview of Measure
    The PIX survey was developed by a team at the Yale University, Yale 
New Haven Psychiatric Hospital to address the gap in available 
experience of care surveys, specifically the lack of publicly 
available, minimally burdensome, psychometrically validated surveys 
specified for the IPF setting.\176\ The interdisciplinary team that 
developed this survey, including researchers and clinicians, conducted 
the following steps in developing the survey: (1)

[[Page 21289]]

literature review; (2) patient focus groups; (3) solicitation of input 
from a patient and family advisory council; (4) review of content 
validity with an expert panel; (5) development of survey; and (6) 
survey testing within the Yale New Haven Psychiatric Hospital 
system.\177\
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    \176\ Klemanski DH, Barnes T, Bautista C, Tancreti C, Klink B, 
Dix E. Development and Validation of the Psychiatric Inpatient 
Experience (PIX) Survey: A Novel Measure of Patient Experience 
Quality Improvement. Journal of Patient Experience. 2022;9. 
doi:10.1177/23743735221105671.
    \177\ Klemanski DH, Barnes T, Bautista C, Tancreti C, Klink B, 
Dix E. Development and Validation of the Psychiatric Inpatient 
Experience (PIX) Survey: A Novel Measure of Patient Experience 
Quality Improvement. Journal of Patient Experience. 2022;9. 
doi:10.1177/23743735221105671.
---------------------------------------------------------------------------

    The resulting survey contains 23 items in four domains. Patients 
can respond to each of the 23 items using a five-point Likert scale 
(that is, strongly disagree, somewhat disagree, neutral, somewhat 
agree, strongly agree) or choose that the item does not apply. The four 
domains are:
     Relationship with Treatment Team;
     Nursing Presence;
     Treatment Effectiveness; and
     Healing Environment.\178\
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    \178\ Klemanski DH, Barnes T, Bautista C, Tancreti C, Klink B, 
Dix E. Development and Validation of the Psychiatric Inpatient 
Experience (PIX) Survey: A Novel Measure of Patient Experience 
Quality Improvement. Journal of Patient Experience. 2022;9. 
doi:10.1177/23743735221105671.
---------------------------------------------------------------------------

    The PIX survey is distributed to patients by administrative staff 
at a time beginning 24 hours prior to planned discharge. The survey, 
which is available in both English and Spanish, can be completed prior 
to discharge using either a paper copy of the survey or an electronic 
version of the survey via tablet computer.\179\ For a complete list of 
survey questions, including which questions are elements of each 
domain, we refer readers to the description of the survey in the 
Journal of Patient Experience: https://journals.sagepub.com/doi/full/10.1177/23743735221105671.
---------------------------------------------------------------------------

    \179\ Klemanski DH, Barnes T, Bautista C, Tancreti C, Klink B, 
Dix E. Development and Validation of the Psychiatric Inpatient 
Experience (PIX) Survey: A Novel Measure of Patient Experience 
Quality Improvement. Journal of Patient Experience. 2022;9. 
doi:10.1177/23743735221105671.
---------------------------------------------------------------------------

(1) Measure Calculation
(a) Cohort
    The cohort for this measure is all patients discharged from an IPF 
during the reporting period who do not meet one of the following 
exclusions: (1) patients who are under 13 years of age at time of 
discharge, and (2) patients who are unable to complete the survey due 
to cognitive or intellectual limitations. Our proposed sampling 
procedures that IPFs could apply to the PIX survey measure are 
described in section V.I.6 of the preamble of this proposed rule.
(b) Calculation
    The measure would be reported as five separate rates, one for each 
of the four domains of the PIX survey and one overall rate. Each of 
these rates would be calculated from patient responses on the PIX 
survey and then publicly reported on the Care Compare website (or 
successor CMS website). We would report the mean rates for each domain 
as well the overall mean rate on the Care Compare website (or successor 
CMS website). To calculate the mean scores, we would assign a numerical 
value ranging from 1 (Strongly Disagree) to 5 (Strongly Agree). We 
would then calculate the average response by adding the values of all 
responses and dividing that value by the number of responses, excluding 
questions that were omitted or to which the patient selected ``Does Not 
Apply.''
(2) Review by the Measure Applications Partnership (MAP)
    We included the PIX survey measure on the publicly available ``List 
of Measures Under Consideration for December 1, 2022'' (MUC List), a 
list of measures under consideration for use in various Medicare 
programs.\180\ The CBE-convened Measure Applications Partnership (MAP) 
reviewed the MUC List and discussed the potential use of the PIX survey 
for the IPFQR Program.
---------------------------------------------------------------------------

    \180\ Centers for Medicare & Medicaid Services. List of Measures 
Under Consideration for December 1, 2022. Available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
---------------------------------------------------------------------------

    The MAP Health Equity Advisory Group agreed that well-constructed 
patient experience of care measures are an important indicator of 
quality care. Overall, the MAP Health Equity Advisory Group expressed 
that this measure is a ``step in the right direction for behavioral 
health.'' \181\
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    \181\ Centers for Medicare & Medicaid Services. 2022-2023 MAP 
Final Recommendations. Available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
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    In addition, on December 8 through 9, 2022, the MAP Rural Health 
Workgroup reviewed the 2022 MUC List and expressed support for this 
measure, with patient support being especially strong. Some members of 
the MAP Rural Health Advisory Group were concerned about operational 
challenges, specifically costs related to implementation and 
maintenance and potential bias if the surveying occurs prior to 
discharge.\182\
---------------------------------------------------------------------------

    \182\ Centers for Medicare & Medicaid Services. 2022-2023 MAP 
Final Recommendations. Available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
---------------------------------------------------------------------------

    The MAP Hospital workgroup reviewed the 2022 MUC List on December 
13 through 14, 2022. The MAP Hospital workgroup conditionally supported 
the measure for rulemaking, while emphasizing the importance of 
including patient reported experience of care data in the IPFQR 
Program. The MAP Hospital workgroup's conditions for support included 
endorsement by the CBE and additional testing data for this measure, 
specifically: (1) data from testing of the measure in a variety of 
settings (including urban, rural, safety net providers, and others), 
(2) data regarding survey results depending on the timing of survey 
administration (pre- versus post-discharge), (3) data regarding patient 
factors (for example, voluntary versus involuntary admissions), and (4) 
data regarding of mode of administration (for example, email versus 
mail) that may affect performance.\183\ Thereafter, the MAP 
Coordinating Committee deliberated on January 24 through 25, 2023 and 
ultimately voted to uphold the Hospital Workgroup's recommendation to 
conditionally support the PIX survey measure for rulemaking pending the 
same conditions as the MAP Hospital workgroup.\184\
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    \183\ Centers for Medicare & Medicaid Services. 2022-2023 MAP 
Final Recommendations. Available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \184\ Centers for Medicare & Medicaid Services. 2022-2023 MAP 
Final Recommendations. Available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
---------------------------------------------------------------------------

    We believe that the testing that has been conducted on the PIX 
survey demonstrates that it is a valid and reliable tool for measuring 
patient experience of care in IPFs, and that the results from this 
initial testing are generalizable across IPFs. However, we agree with 
the MAP Hospital workgroup that additional testing of this measure 
could help better understand measure results, including any differences 
in measure results that were not analyzed during the PIX survey's 
initial testing. Therefore, we intend to conduct additional testing of 
the PIX survey prior to public reporting of the measure data, and we 
are proposing two years of voluntary reporting before beginning 
mandatory reporting of the PIX survey.
(3) CBE Endorsement
    The measure developer has not submitted this measure for CBE 
endorsement at this time. The developer does intend to submit this 
measure for endorsement in the future, following additional testing as 
recommended by the MAP Hospital workgroup. Although

[[Page 21290]]

section 1886(s)(4)(D)(i) of the Act generally requires that measures 
specified by the Secretary shall be endorsed by the entity with a 
contract under section 1890(a) of the Act, section 1886(s)(4)(D)(ii) of 
the Act states that in the case of a specified area or medical topic 
determined appropriate by the Secretary for which a feasible and 
practical measure has not been endorsed by the entity with a contract 
under section 1890(a) of the Act, the Secretary may specify a measure 
that is not so endorsed as long as due consideration is given to a 
measure that has been endorsed or adopted by a consensus organization 
identified by the Secretary.
    We reviewed CBE-endorsed measures and were unable to identify any 
other CBE-endorsed measures on this topic. We did identify the 
Experience of Care and Health Outcomes (ECHO) Survey measure (CBE 
#008); however, this measure has had its endorsement removed as of the 
spring 2020 cycle. Additionally, this survey was developed and tested 
for outpatient behavioral health, not the inpatient setting. 
Additionally, we identified the Patient Experience of Psychiatric Care 
as Measured by the Inpatient Consumer Survey (ICS) measure (CBE #0726). 
This measure has also had its endorsement removed as of the spring 2018 
cycle. As neither of these two measures are endorsed at this time, we 
believe the exception in section 1886(s)(4)(D)(ii) of the Act applies.
(c) Data Collection, Submission and Reporting
    IPFs would be responsible for administering the survey and 
collecting data on survey responses because the PIX survey is 
administered beginning 24 hours prior to a patient's planned discharge. 
Therefore, IPFs would collect the data in a manner similar to the 
collection of data for chart-abstracted measures or other patient 
screening measures. That is, the IPFs would collect data in the 
facility and then report these data to CMS using the methods described 
in section V.I.4 of this proposed rule, that is ``Data Submission 
Requirements'' under ``Procedural Requirements.''
    Because we anticipate that many IPFs, which already administer 
different patient experience of care survey instruments to their 
patients, would need to transition to the PIX survey, we are proposing 
a voluntary reporting period beginning with data from CY 2025, which 
would be reported to CMS in CY 2026. We would then require IPFs to 
report data for the PIX survey measure beginning with data collected 
during CY 2026, to be reported to CMS during CY 2027 and affect the FY 
2028 payment determination.
    We invite comments on our proposal.

E. Proposed Modification of the COVID-19 Vaccination Coverage Among 
Healthcare Personnel (HCP) Measure Beginning With the Quarter 4 CY 2023 
Reporting Period/FY 2025 Payment Determination

1. Background
    On January 31, 2020, the Secretary of the Department of Health and 
Human Services declared a public health emergency (PHE) for the United 
States in response to the global outbreak of SARS-COV-2, a novel (new) 
coronavirus that causes a disease named ``coronavirus disease 2019'' 
(COVID-19).\185\ Subsequently, multiple quality reporting programs 
including the Hospital IQR Program (86 FR 45374) and the IPFQR Program 
(86 FR 42633 through 42640) adopted the COVID-19 Vaccination Coverage 
among Healthcare Personnel (HCP) measure. The COVID-19 Vaccination 
Coverage Among Healthcare Personnel (HCP) measure adopted in the IPFQR 
Program in the FY 2022 IPF PPS final rule (86 FR 42633 through 42650) 
requires each IPF to calculate the percentage of HCP eligible to work 
in the IPF for at least one day during the reporting period, excluding 
persons with contraindications to the COVID-19 vaccine, who have 
received a complete vaccination course against SARS-CoV-2 (86 FR 42633 
through 42640).
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    \185\ U.S. Dept of Health and Human Services, Office of the 
Assistant Secretary for Preparedness and Response. (2020). 
Determination that a Public Health Emergency Exists. Available at: 
https://www.phe.gov/emergency/news/healthactions/phe/Pages/2019-nCoV.aspx.
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    COVID-19 has continued to spread domestically and around the world 
with more than 102.7 million cases and 1.1 million deaths in the United 
States as of February 13, 2023.\186\ In recognition of the ongoing 
significance and complexity of COVID-19, the Secretary has renewed the 
PHE on April 21, 2020, July 23, 2020, October 2, 2020, January 7, 2021, 
April 15, 2021, July 19, 2021, October 15, 2021, January 14, 2022, 
April 12, 2022, July 15, 2022, October 13, 2022, January 11, and 
February 9, 2023.\187\ The President has announced that the PHE will 
end on May 11, 2023,\188\ and HHS has stated that the public health 
response to COVID-19 remains a public health priority with a whole of 
government approach to combatting the virus, including through 
vaccination efforts.\189\
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    \186\ Centers for Disease Control and Prevention. COVID Data 
Tracker. Accessed February 13, 2023. Available at: https://covid.cdc.gov/covid-data-tracker/#datatracker-home.
    \187\ U.S. Dept. of Health and Human Services. Office of the 
Assistant Secretary for Preparedness and Response. (2023). Renewal 
of Determination that a Public Health Emergency Exists. Available 
at: https://aspr.hhs.gov/legal/PHE/Pages/covid19-11Jan23.aspx.
    \188\ https://www.whitehouse.gov/wp-content/uploads/2023/01/SAP-H.R.-382-H.J.-Res.-7.pdf.
    \189\ U.S. Dept. of Health and Human Services. Fact Sheet: 
COVID-19 Public Health Emergency Transition Roadmap. February 9, 
2023. Available at: https://www.hhs.gov/about/news/2023/02/09/fact-sheet-covid-19-public-health-emergency-transition-roadmap.html.
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    In the FY 2022 IPF PPS final rule (86 FR 42633 through 42635) and 
in our Revised Guidance for Staff Vaccination Requirements,\190\ we 
stated that vaccination is a critical part of the nation's strategy to 
effectively counter the spread of COVID-19. We continue to believe it 
is important to incentivize and track HCP vaccination through quality 
measurement across care settings, including IPFs, in order to protect 
HCP, patients, and caregivers, and to help sustain the ability of HCP 
to continue serving their communities throughout the PHE and beyond.
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    \190\ Centers for Medicare & Medicaid Services. Revised Guidance 
for Staff Vaccination Requirements QSO-23-02-ALL. October 26, 2022. 
Available at: https://www.cms.gov/files/document/qs0-23-02-all.pdf.
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    At the time we issued the FY 2022 IPF PPS final rule, the Food and 
Drug Administration (FDA) had issued emergency use authorizations 
(EUAs) for initial and primary adult vaccines manufactured by Pfizer-
BioNTech,\191\ Moderna,\192\ and Janssen.\193\ On August 23, 2021, the 
FDA issued an approval for the Pfizer-BioNTech vaccine, now marketed as 
Comirnaty.\194\ The FDA issued approval for the Moderna vaccine, 
marketed as Spikevax, on

[[Page 21291]]

January 31, 2022 \195\ and an EUA for the Novavax adjuvanted vaccine on 
July 13, 2022.\196\ The FDA also issued EUAs for COVID-19 single 
vaccine booster doses in September 2021 \197\ and October 2021 \198\ 
for certain populations and in November 2021 \199\ for all individuals 
18 years of age and older. EUAs were subsequently issued for a second 
vaccine booster dose in March 2022 \200\ and for bivalent or 
``updated'' booster doses in August 2022.\201\
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    \191\ Food and Drug Administration. (December 2020). FDA Takes 
Key Action in Fight Against COVID-19 By Issuing Emergency Use 
Authorization for First COVID-19 Vaccine. Available at: https://www.fda.gov/news-events/press-announcements/fda-takes-key-action-fight-against-covid-19-issuing-emergency-use-authorization-first-covid-19.
    \192\ Food and Drug Administration. (December 2020). FDA Takes 
Additional Action in Fight Against COVID-19 By Issuing Emergency Use 
Authorization for Second COVID-19 Vaccine. Available at: https://www.fda.gov/news-events/press-announcements/fda-takes-additional-action-fight-against-covid-19-issuing-emergency-use-authorization-second-covid.
    \193\ Food and Drug Administration. (February 2021). FDA Issues 
Emergency Use Authorization for Third COVID-19 Vaccine. Available 
at: https://www.fda.gov/news-events/press-announcements/fda-issues-emergency-use-authorization-third-covid-19-vaccine.
    \194\ Food and Drug Administration. (August 2021). FDA Approves 
First COVID-19 Vaccine. Available at: https://www.fda.gov/news-events/press-announcements/fda-approves-first-covid-19-vaccine.
    \195\ Food and Drug Administration. (January 2022). Coronavirus 
(COVID-19) Update: FDA Takes Key Action by Approving Second COVID-19 
Vaccine. Available at: https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-takes-key-action-approving-second-covid-19-vaccine.
    \196\ Food and Drug Administration. (July 2022). Coronavirus 
(COVID-19) Update: FDA Authorizes Emergency Use of Novavax COVID-19 
Vaccine, Adjuvanted. Available at: https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-authorizes-emergency-use-novavax-covid-19-vaccine-adjuvanted.
    \197\ Food and Drug Administration. (September 2021). FDA 
Authorizes Booster Dose of Pfizer-BioNTech COVID-19 Vaccine for 
Certain Populations. Available at: https://www.fda.gov/news-events/press-announcements/fda-authorizes-booster-dose-pfizer-biontech-covid-19-vaccine-certain-populations.
    \198\ Food and Drug Administration. (October 2021). Coronavirus 
(COVID-19) Update: FDA Takes Additional Actions on the Use of a 
Booster Dose for COVID-19 Vaccines. Available at: https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-takes-additional-actions-use-booster-dose-covid-19-vaccines.
    \199\ Food and Drug Administration. (November 2021). Coronavirus 
(COVID-19) Update: FDA Expands Eligibility for COVID-19 Vaccine 
Boosters. Available at: https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-expands-eligibility-covid-19-vaccine-boosters.
    \200\ Food and Drug Administration. (March 2022). Coronavirus 
(COVID-19) Update: FDA Authorizes Second Booster Dose of Two COVID-
19 Vaccines for Older and Immunocompromised Individuals. Available 
at: https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-authorizes-second-booster-dose-two-covid-19-vaccines-older-and.
    \201\ Food and Drug Administration. (August 2022). Coronavirus 
(COVID-19) Update: FDA Authorizes Moderna, Pfizer-BioNTech Bivalent 
COVID-19 Vaccines for Use as a Booster Dose. Available at: https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-authorizes-moderna-pfizer-biontech-bivalent-covid-19-vaccines-use.
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    In the FY 2022 IPF PPS final rule, we stated that data 
demonstrating the effectiveness of COVID-19 vaccines to prevent 
asymptomatic infection or transmission of SARS-COV-2, the novel (new) 
coronavirus that causes COVID-19, were limited (86 FR 42634). While the 
impact of COVID-19 vaccines on asymptomatic infection and transmission 
was not yet fully known at the time of the FY 2022 IPF PPS final rule, 
there were robust data available on COVID-19 vaccine effectiveness 
across multiple populations against symptomatic infection, 
hospitalization, and death. Two-dose COVID-19 vaccines from Pfizer-
BioNTech and Moderna had been found to be 88 percent and 93 percent 
effective against hospitalization for COVID-19, respectively, over 6 
months for adults over age 18 without immunocompromising conditions. 
\202\ During a SARS-COV-2 surge in the spring and summer of 2021, 92 
percent of COVID-19 hospitalizations and 91 percent of COVID-19-
associated deaths were reported among persons not fully 
vaccinated.\203\ Real-world studies of population-level vaccine 
effectiveness indicated similarly high rates of effectiveness in 
preventing SARS-COV-2 infection among frontline workers in multiple 
industries, with a 90 percent effectiveness in preventing symptomatic 
and asymptomatic infection from December 2020 through August 2021.\204\ 
Vaccines have also been highly effective in real-world conditions (that 
is, vaccines have continued to be highly effective in conditions other 
than clinical trials) at preventing COVID-19 in HCP with up to 96 
percent effectiveness for fully vaccinated HCP, including those at risk 
for severe infection and those in racial and ethnic groups 
disproportionately affected by COVID-19.\205\ In the presence of high 
community prevalence of COVID-19, residents of nursing homes with low 
staff vaccination coverage had cases of COVID-19-related deaths 195 
percent higher than those among residents of nursing homes with high 
staff vaccination coverage.\206\ Currently available data demonstrate 
that COVID-19 vaccines are effective and prevent severe disease, 
including hospitalization, and death.
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    \202\ Centers for Disease Control and Prevention. (September 24, 
2021). Morbidity and Mortality Weekly Report (MMWR). Comparative 
Effectiveness of Moderna, Pfizer-BioNTech, and Janssen (Johnson & 
Johnson) Vaccines in Preventing COVID-19 Hospitalizations Among 
Adults Without Immunocompromising Conditions--United States, March-
August 2021. Available at: https://cdc.gov/mmwr/volumes/70/wr/mm7038e1.htm?s_cid=mm7038e1_w.
    \203\ Centers for Disease Control and Prevention. (September 10, 
2021). Morbidity and Mortality Weekly Report (MMWR). Monitoring 
Incidence of COVID-19 Cases, Hospitalizations, and Deaths, by 
Vaccination Status--13 U.S. Jurisdictions, April 4-July 17, 2021. 
Available at: https://cdc.gov.mmwr/volumes/70/wr/mm7037e1.htm?s_cid=mm7037e1_w.
    \204\ Centers for Disease Control and Prevention. (August 27, 
2021). Morbidity and Mortality Weekly Report (MMWR). Effectiveness 
of COVID-19 Vaccines in Preventing SARS-COV-2 Infection Among 
Frontline Workers Before and During B.1.617.2 (Delta) Variant 
Predominance--Eight U.S. Locations, December 2020-August 2021. 
Available at: https://cdc.gov/mmwr/volume/70/wr/mm7034e4.htm?s_cid=mm7034e4_w.
    \205\ Pilishivi, T. et al. (December 2022). Effectiveness of 
mRNA Covid-19 Vaccine among U.S. Health Care Personnel. New England 
Journal of Medicine. 2021 Dec 16;385(25):e90. Available online at: 
https://pubmed.ncbi.nlm.nih.gov/34551224/.
    \206\ McGarry BE et al. (January 2022). Nursing Home Staff 
Vaccination and Covid-19 Outcomes. New England Journal of Medicine. 
2022 Jan 27;386(4):397-398. Available online at: https://pubmed.ncbi.nlm.nih.gov/34879189/.
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    As SARS-COV-2 persists and evolves, our COVID-19 vaccination 
strategy must remain responsive. When we adopted the COVID-19 
Vaccination Coverage Among HCP measure in the FY 2022 IPF PPS final 
rule, we stated that the need for booster doses of the COVID-19 vaccine 
had not been established and no additional doses had been recommended 
(86 FR 42639). We also stated that we believed the numerator was 
sufficiently broad to include potential future boosters as part of a 
``complete vaccination course'' and that the measure was sufficiently 
specified to address boosters (86 FR 42639). Since we adopted the 
COVID-19 Vaccination Coverage Among HCP measure in the FY 2022 IPF PPS 
final rule, new variants of SARS-COV-2 have emerged around the world 
and within the United States. Specifically, the Omicron variant (and 
its related subvariants) is listed as a variant of concern by the 
Centers for Disease Control and Prevention (CDC) because it spreads 
more easily than earlier variants.\207\ Vaccine manufacturers have 
responded to the Omicron variant by developing bivalent COVID-19 
vaccines, which include a component of the original virus strain to 
provide broad protection against COVID-19 and a component of the 
Omicron variant to provide better protection against COVID-19 caused by 
the Omicron variant.\208\ These booster doses of the bivalent COVID-19 
vaccine have been shown to increase immune response to SARS-COV-2 
variants, including Omicron, particularly in individuals who are more 
than 6 months removed from receipt of their primary series.\209\ The 
FDA issued EUAs for two bivalent COVID-19 vaccine booster doses, one 
from Pfizer-BioNTech \210\ and one from

[[Page 21292]]

Moderna,\211\ and strongly encourages anyone who is eligible to 
consider receiving a booster dose with a bivalent COVID-19 vaccine to 
provide better protection against currently circulating variants.\212\ 
COVID-19 booster doses are associated with a greater reduction in 
infections among HCP and their patients relative to those who only 
received primary series vaccination. One study showed a rate of 
breakthrough infections among HCP who received only the two-dose 
regimen of the COVID-19 vaccine of 21.4 percent compared to a rate of 
0.7 percent among HCP who received a third dose of the COVID-19 
vaccine.\213\
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    \207\ Centers for Disease Control and Prevention. (August 2021). 
Variants of the Virus. Available at: https://www.cdc.gov/coronavirus/2019-ncov/variants/.
    \208\ Food and Drug Administration. (November 2022). COVID-19 
Bivalent Vaccine Boosters.
    \209\ Chalkias, S et al. (October 2022). A Bivalent Omicron-
Containing Booster Vaccine against Covid-19. N Engl J Med 2022; 
387:1279-1291. Available online at: https://www.nejm.org/doi/full/10.1056/NEJMoa2208343.
    \210\ Food and Drug Administration. (November 2022). Pfizer-
BioNTech COVID-19 Vaccines. Available at: https://www.fda.gov/emergency-preparedness-and-response/coronavirus-disease-2019-Covid-19/pfizer-biontech-covid-19-vaccines.
    \211\ Food and Drug Administration. (November 2022). Moderna 
COVID-19 Vaccines. Available at: https://www.fda.gov/emergency-preparedness-and-response/coronavirus-disease-2019-covid-19/moderna-covid-19-vaccines.
    \212\ Food and Drug Administration. (August 2022). Coronavirus 
(COVID-19) Update: FDA Authorizes Moderna, Pfizer-BioNTech Bivalent 
COVID-19 Vaccines for Use as a Booster Dose. Available at: https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-authorizes-moderna-pfizer-biontech-bivalent-covid-19-vaccines-use.
    \213\ Oster Y et al. (May 2022). The effect of a third BNT162b2 
vaccine on breakthrough infections in health care workers: a cohort 
analysis. Clin Microbiol Infect. 2022 May;28(5):735.e1-735.e3. 
Available online at: https://pubmed.ncbi.nlm.nih.gov/35143997/.
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    Despite the efficacy of COVID-19 vaccination generally, data 
submitted to the CDC via the National Health Safety Network (NHSN) 
demonstrate clinically significant variation in booster dose 
vaccination rates across facilities, including IPFs. During the first 
quarter of 2022, IPFs reported a median coverage rate of booster or 
additional dose(s) of 19.1 percent, with an interquartile range of 8.7 
percent to 37.9 percent. These data, which show a performance gap in 
booster coverage, indicate that there is opportunity to improve booster 
vaccination coverage among HCP in IPFs.\214\
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    \214\ Measure Applications Partnership (MAP) Hospital Workgroup 
Preliminary Analyses. Available at: https://mmshub.cms.gov/sites/default/files/map-hospital-measure-specifications-manual-2022.pdf.
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    We believe that vaccination remains the most effective means to 
prevent the worst consequences of COVID-19, including severe illness, 
hospitalization, and death. Given the availability of vaccine efficacy 
data, EUAs issued by the FDA for bivalent boosters, the continued 
presence of SARS-COV-2 in the United States, and variance among rates 
of booster dose vaccination, it is important to modify the COVID-19 
Vaccination Coverage Among HCP measure to reflect recent guidance that 
explicitly specifies for HCP to receive primary series and booster 
vaccine doses in a timely manner. Given the persistent spread of COVID-
19, we continue to believe that monitoring and surveillance is 
important and provides patients, beneficiaries, and their caregivers 
with information to support informed decision-making.
    Beginning with the fourth quarter of the CY 2023 reporting period/
FY 2025 payment determination, we propose to modify the COVID-19 
Vaccination Coverage Among HCP measure to replace the term ``complete 
vaccination course'' with the term ``up-to-date'' in the HCP 
vaccination definition. We also propose to update the numerator to 
specify the time frames within which an HCP is considered ``up-to-
date'' with recommended COVID-19 vaccines, including booster doses.
    In the FY 2022 IPF PPS final rule (86 FR 42638), we stated, and 
reiterate now, that the COVID-19 Vaccination Coverage Among HCP measure 
is a process measure that assesses HCP vaccination coverage rates. 
Unlike outcome measures, process measures do not assess a particular 
outcome.

2. Overview of Measure

    The proposed COVID-19 Vaccination Coverage Among HCP measure is a 
process measure developed by the CDC to track COVID-19 vaccination 
coverage among HCP in settings such as acute care facilities, including 
IPFs, and post-acute care facilities.
    We refer readers to the FY 2022 IPF PPS final rule (86 FR 42635 
through 42636) for more information on the initial review of the 
current COVID-19 Vaccination Coverage Among HCP measure by the Measure 
Applications Partnership (MAP). We included an updated version of the 
proposed modification of the COVID-19 Vaccination Coverage Among HCP 
measure on the list of measures under consideration (MUC List), which 
is published annually on behalf of CMS by the CBE with which the 
Secretary must contract as required by section 1890(a) of the Act, for 
the 2022 to 2023 pre-rulemaking cycle for consideration by the MAP.
    In December 2022, the MAP Hospital Workgroup discussed the proposed 
modification of the COVID-19 Vaccination Coverage Among HCP measure. 
The MAP Hospital Workgroup stated that the proposed modification of the 
current measure captures ``up-to-date'' vaccination information in 
accordance with the CDC's recommendations, which have been updated 
since their initial development. Additionally, the MAP Hospital 
Workgroup appreciated that the proposed modified measure's denominator 
is broader and simplified from seven categories of healthcare personnel 
to four.\215\
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    \215\ Centers for Medicare & Medicaid Services. 2022-2023 MAP 
Final Recommendations. Available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
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    During review on December 6 and 7, 2022, the MAP Health Equity 
Advisory Group highlighted the importance of COVID-19 measures and 
asked whether the proposed modified measure excludes individuals with 
contraindications to Food and Drug Administration (FDA) authorized or 
approved COVID-19 vaccines, and whether the measure will be stratified 
by demographic factors.\216\ The CDC, the measure developer for this 
measure, responded to the question regarding individuals with 
contraindications by confirming that HCP with contraindications to the 
vaccines are excluded from the measure denominator. The CDC further 
explained that the proposed modified measure will not be stratified 
since the data are submitted at an aggregate rather than an individual 
level.
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    \216\ Centers for Medicare & Medicaid Services. 2022-2023 MAP 
Final Recommendations. Available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
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    During review on December 8 through 9, 2022, the MAP Rural Health 
Advisory Group expressed concerns about data collection burden, citing 
that collection is performed manually and that small rural hospitals 
may not have employee health software.\217\ The measure developer (that 
is, the CDC) acknowledged the challenge of getting adequate 
documentation and emphasized the goal to ensure the measure does not 
present a burden on providers. The measure developer also noted that 
the model used for this measure is based on the Influenza Vaccination 
Coverage Among HCP measure (CBE #0431), and it intends to utilize a 
similar approach to the modified COVID-19 Vaccination Coverage Among 
HCP measure if vaccination strategy becomes seasonal. The proposed 
modified COVID-19 Vaccination Coverage Among HCP measure received 
conditional support for rulemaking pending testing indicating the 
measure is reliable and valid, and endorsement by the CBE. The MAP 
noted that the previous version of

[[Page 21293]]

the measure received endorsement from the CBE (CBE #3636) \218\ and 
that the CDC intends to submit the proposed updated measure for 
endorsement.
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    \217\ Centers for Medicare & Medicaid Services. 2022-2023 MAP 
Final Recommendations. Available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \218\ Centers for Medicare & Medicaid Services. 2022-2023 MAP 
Final Recommendations. Available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports. 
and CMS Measures Inventory Tool. Available at: https://cmit.cms.gov/cmit/#/MeasureView?variantId=5273§ionNumber=1.
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a. Measure Specifications
    The proposed modification of the COVID-19 Vaccination Coverage 
Among HCP measure would require that IPFs collect data at least one 
week each month for each of the three months in a quarter.
    The denominator would be the number of HCP eligible to work in the 
facility for at least one day during the reporting period, excluding 
persons with contraindications to COVID-19 vaccination that are 
described by the CDC.\219\ There are not any proposed changes to the 
denominator exclusions for the current COVID-19 Vaccination Coverage 
Among HCP measure, and the proposed modified COVID-19 Vaccination 
Coverage Among HCP measure would continue to exclude otherwise 
denominator-eligible HCPs with contraindications as defined by the 
CDC.\220\ IPFs report the following four categories of HCP to NHSN; 
\221\ the first three categories are included in the measure 
denominator:
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    \219\ Centers for Disease Control and Prevention. (2022). 
Contraindications and precautions. Available at: https://www.cdc.gov/vaccines/covid-19/clinical-considerations/interim-considerations-us.html#contraindications.
    \220\ Centers for Disease Control and Prevention. (2022). 
Contraindications and precautions. Available at: https://www.cdc.gov/vaccines/covid-19/clinical-considerations/interim-considerations-us.html#contraindications.
    \221\ https://www.cdc.gov/nhsn/pdfs/nqf/covid-vax-hcpcoverage-rev-2023-508.pdf.
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    1. Employees: This category includes all persons who receive a 
direct paycheck from the IPF (that is, on the IPF's payroll), 
regardless of clinical responsibility or patient contact.
    2. Licensed independent practitioners (LIPs): This category 
includes physicians (MD, DO), advanced practice nurses, and physician 
assistants who are affiliated with the IPF but are not directly 
employed by it (that is, they do not receive a paycheck from the IPF), 
regardless of clinical responsibility or patient contact. Post-
residency fellows are also included in this category if they are not on 
the IPF's payroll.
    3. Adult students/trainees and volunteers: This category includes 
medical, nursing, or other health professional students, interns, 
medical residents, or volunteers aged 18 or older who are affiliated 
with the healthcare facility, but are not directly employed by it (that 
is, they do not receive a paycheck from the facility), regardless of 
clinical responsibility or patient contact.
    4. Other contract personnel: Contract personnel are defined as 
persons providing care, treatment, or services at the IPF through a 
contract who do not fall into any of the previously discussed 
denominator categories. Please note that this also includes vendors 
providing care, treatment, or services at the facility who may or may 
not be paid through a contract. Facilities are required to enter data 
on other contract personnel for submission in the NHSN application, but 
reporting for this category is not included in the COVID-19 Vaccination 
Coverage Among HCP measure.
    The numerator would be the cumulative number of HCP in the 
denominator population who are ``up-to-date'' with CDC recommended 
COVID-19 vaccines. IPFs should refer to the CDC's guidance, to 
determine the then-applicable definition of ``up-to-date,'' as of the 
first day of the applicable reporting quarter. The CDC's guidance can 
be found at: https://www.cdc.gov/nhsn/pdfs/hps/covidvax/UpToDateGuidance-508.pdf. For purposes of NHSN surveillance, the CDC 
used the following definition of ``up-to-date'' during the fourth 
quarter of CY 2022 surveillance period (September 26, 2022 through 
December 25, 2022):
    1. Individuals who received an updated bivalent \222\ booster dose, 
or
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    \222\ The updated (bivalent) Moderna and Pfizer-BioNTech 
boosters target the most recent Omicron subvariants. The updated 
(bivalent) boosters were recommended by the CDC on 9/2/2022. As of 
this date, the original, monovalent mRNA vaccines are no longer 
authorized as a booster dose for people ages 12 years and older.
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    2a. Individuals who received their last booster dose less than 2 
months ago, or
    2b. Individuals who completed their primary series \223\ less than 
2 months ago.
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    \223\ Completing a primary series means receiving a two-dose 
series of a COVID-19 vaccine or a single dose of Janssen/J&J COVID-
19 vaccine.
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    We refer readers to https://www.cdc.gov/nhsn/nqf/ for 
more details on the proposed modified measure specifications.
    We propose that public reporting of the modified version of the 
COVID-19 Vaccination Coverage Among HCP measure would begin with the 
October 2024 Care Compare refresh, or as soon as technically feasible 
after that refresh.
b. CBE Endorsement
    The current version of the COVID-19 Vaccination Coverage Among HCP 
measure received CBE endorsement (CBE #3636, ``Quarterly Reporting of 
COVID-19 Vaccination Coverage among Healthcare Personnel'') on July 26, 
2022.\224\
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    \224\ CMS Measures Inventor Tool. COVDI-19 Vaccination Coverage 
among Healthcare Personnel. Available at: https://cmit.cms.gov/cmit/#/MeasureView?variantId=5273§ionNumber=1.
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    Although section 1886(s)(4)(D)(i) of the Act generally requires 
that measures specified by the Secretary shall be endorsed by the 
entity with a contract under section 1890(a) of the Act, section 
1886(s)(4)(D)(ii) of the Act states that in the case of a specified 
area or medical topic determined appropriate by the Secretary for which 
a feasible and practical measure has not been endorsed by the entity 
with a contract under section 1890(a) of the Act, the Secretary may 
specify a measure that is not so endorsed as long as due consideration 
is given to a measure that has been endorsed or adopted by a consensus 
organization identified by the Secretary.
    We reviewed CBE-endorsed measures and were unable to identify any 
other CBE-endorsed measures on this topic; therefore, we believe the 
exception in section 1886(s)(4)(D)(ii) of the Act applies. The CDC, as 
the measure developer, is currently pursuing endorsement for the 
modified version of the measure as the current version of the measure 
has already received endorsement.
3. Data Collection, Submission, and Reporting
    We refer readers to the FY 2022 IPF PPS final rule (86 FR 42636 
through 42640) for information on data submission and reporting of the 
current COVID-19 Vaccination Coverage Among HCP measure. While we do 
not propose any changes to the data submission or reporting process, we 
propose that reporting of the updated measure would begin with the 
fourth quarter of CY 2023 reporting period for FY 2025 payment 
determination. Beginning with the FY 2026 payment determination, we 
propose that IPFs would be required to submit data for the entire 
calendar year.
    Under the data submission and reporting process, IPFs would collect 
the numerator and denominator for the COVID-19 Vaccination Coverage 
Among HCP measure for at least one self-selected week during each month 
of the reporting quarter and submit the data to the CDC's National 
Health Safety Network (NHSN) Healthcare Personal Safety (HPS) Component 
before the quarterly deadline. If an IPF submits more than one week of 
data in a month, the CDC would use most recent week's

[[Page 21294]]

data to calculate the measure results which would be publicly reported. 
Each quarter, the CDC would calculate a single quarterly COVID-19 HCP 
vaccination coverage rate for each IPF, which would be calculated by 
taking the average of the data from the three weekly rates submitted by 
the IPF for that quarter. CMS would publicly report each quarterly 
COVID-19 HCP vaccination coverage rate as calculated by the CDC based 
on the data IPFs submit to the NHSN (86 FR 42636 through 42640).
    We invite public comment on this proposal.

F. Removal or Retention of IPFQR Program Measures

1. Background
    In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38463 through 38465) 
and FY 2019 IPF PPS final rule (83 FR 38591 through 38593), we adopted 
several considerations for removing or retaining measures within the 
IPFQR Program.
    Specifically, we have adopted eight factors that we consider when 
evaluating whether to propose a measure for removal from the IPFQR 
Program. These factors are: (1) measure performance among IPFs is so 
high and unvarying that meaningful distinctions and improvements in 
performance can no longer be made (``topped out'' measures); (2) 
measure does not align with current clinical guidelines or practice; 
(3) measure can be replaced by a more broadly applicable measure 
(across setting or populations) or a measure that is more proximal in 
time to desired patient outcomes for the particular topic; (4) measure 
performance or improvement does not result in better patient outcomes; 
(5) measure can be replaced by a measure more strongly associated with 
desired patient outcomes for the particular topic; (6) measure 
collection or public reporting leads to negative intended consequences 
other than patient harm; (7) measure is not feasible to implement as 
specified; and (8) the costs associated with a measure outweigh the 
benefit of its continued use in the program. For measure removal factor 
one, we specified that a measure is ``topped out'' if it meets the 
following criteria: (1) statistically indistinguishable performance at 
the 75th and 90th percentiles; and (2) the truncated coefficient of 
variation is less than or equal to 0.10.
    We also adopted three factors for consideration in determining 
whether to retain a measure in the IPFQR Program, even if the measure 
meets one or more factors for removal. These retention factors are: (1) 
measure aligns with other CMS and HHS policy goals, such as those 
delineated in the National Quality Strategy and CMS Quality Strategy; 
(2) measure aligns with other CMS programs, including other quality 
reporting programs; and (3) measure supports efforts to move IPFs 
towards reporting electronic measures. In the FY 2018 IPPS/LTCH PPS 
final rule (82 FR 38464), we stated that these removal and retention 
factors are considerations that we take into account in balancing the 
benefits and drawbacks of removing or retaining measures on a case-by-
case basis.
    Since adoption, we have not proposed any changes to these policies 
for removal or retention and refer readers to the FY 2018 IPPS/LTCH PPS 
final rule (82 FR 38463 through 38465) and the FY 2019 IPF PPS final 
rule (83 FR 38591 through 38593) for more information. We do not 
propose any updates to these measure retention and removal policies. We 
propose to codify these previously adopted policies at Sec.  
412.433(e).
    We welcome comments on this proposal.
2. Proposed Measures for Removal
    We continue to evaluate our measure set against these removal and 
retention factors on an ongoing basis. In this continual evaluation of 
the IPFQR Program measure set under our Meaningful Measures Framework 
and according to our measure removal and retention factors, we 
identified two measures that we believe are appropriate to propose 
removing from the IPFQR Program beginning with the FY 2025 payment 
determination. Our discussion of these measures follows.
a. Proposed Removal of the Patients Discharged on Multiple 
Antipsychotic Medications With Appropriate Justification (HBIPS-5) 
(Previously Endorsed Under CBE #0560) Measure Beginning With FY 2025 
Payment Determination
    As we assessed our existing measure set to ensure that it remains 
appropriate for the IPFQR Program, we determined that measure removal 
factor two (that is, measure does not align with current clinical 
guidelines or practice) applies to the Patients Discharged on Multiple 
Antipsychotic Medications with Appropriate Justification (HBIPS-5) (CBE 
#560) measure due to the American Psychiatric Association's (APA's) 
updated guidelines for patients with schizophrenia.
    We adopted the HBIPS-5 measure in the FY 2013 IPPS/LTCH PPS final 
rule as part of a set with the Patients Discharged on Multiple 
Antipsychotic Medications (HBIPS-4) (previously endorsed under CBE 
#0552) measure because of the belief that these two measures would help 
reduce unnecessary use of multiple antipsychotics, which would lead to 
better clinical outcomes and reduced side effects for patients (77 FR 
53649 through 53650). We subsequently removed the HBIPS-4 measure in 
the FY 2016 IPF PPS final rule (80 FR 46695 through 46696). As we 
described in that final rule, following our adoption of these measures, 
some experts, including the CBE, provided input that the HBIPS-4 
measure did not provide meaningful information about the quality of 
care received by IPF patients. This led to the removal of the HBIPS-4 
measure's CBE endorsement in January 2014. During the CBE's review of 
the HBIPS-4 measure in 2014, the CBE observed that the HBIPS-4 and 
HBIPS-5 measures could be collected and reported separately and 
expressed that the HBIPS-5 measure should be retained in the IPFQR 
Program as it continued to provide meaningful quality of care 
information (80 FR 046695 through 46696).
    Evidence supporting development and adoption of the HBIPS-5 measure 
included the APA Workgroup on Schizophrenia's 2004 Practice Guideline 
for the Treatment of Patients with Schizophrenia. These guidelines 
stated that the ``combinations of antipsychotics . . . should be 
justified by strong documentation that the patient is not equally 
benefited by monotherapy.'' \225\ In December 2019, the APA Board of 
Trustees approved updated guidelines for treatment of patients with 
schizophrenia.\226\ The updated guidelines are based on evolving 
clinical knowledge and have increased focus and specificity of 
recommendations for the use of pharmacotherapy; they also underscore 
the importance of patient preference and shared-decision making.\227\ 
These guidelines no longer contain the recommendation that combinations 
of antipsychotics should be justified by strong documentation that 
patients are not equally benefited by monotherapy. Therefore, the 
guidelines that originally supported the HBIPS-5 measure have changed 
substantially, and the HBIPS-

[[Page 21295]]

5 measure is no longer aligned with current clinical guidelines and 
practice.
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    \225\ https://www.researchgate.net/publication/298561608_Practice_guideline_for_the_treatment_of_patients_with_schizophrenia_second_edition.
    \226\ https://ajp.psychiatryonline.org/doi/10.1176/appi.ajp.2020.177901.
    \227\ The American Psychiatric Association. Practice Guideline 
for the Treatment of Patients with Schizophrenia, Third Edition. 
Available at: https://psychiatryonline.org/doi/book/10.1176/appi.books.9780890424841. Accessed on February 15, 2023.
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    Furthermore, the HBIPS-5 measure is no longer supported by the 
measure steward (that is, The Joint Commission), who withdrew it from 
the CBE endorsement process in 2019. As a result, the HBIPS-5 measure 
lost its CBE endorsement in October 2019.\228\ Subsequent to this, the 
CBE-convened MAP's discussion of measure set removal for 2021-2022 
included a discussion of this measure. Because the HBIPS-5 measure no 
longer aligns with clinical guidelines and is no longer CBE endorsed 
due to lack of support from the measure developer, the MAP recommended 
that the measure should be removed from the IPFQR Program.\229\
---------------------------------------------------------------------------

    \228\ CMS Measures Inventory Tool. Patients Discharged on 
multiple antipsychotic medications with appropriate justification. 
Available at: https://cmit.cms.gov/cmit/#/MeasureView?variantId=1141§ionNumber=1.
    \229\ MAP 2021-2022 Considerations for Implementing Measures in 
Federal Programs. Available at: https://mmshub.cms.gov/sites/default/files/map_2021-2022_considerations_for_implementing_measures_in_federal_programs_final_report.pdf.
---------------------------------------------------------------------------

    We agree with the MAP's assessment that the measure no longer 
aligns with clinical guidelines and therefore propose to remove the 
measure from the IPFQR Program beginning with FY 2025 payment 
determination. We note that data for the FY 2024 payment determination 
represents care provided in CY 2022 and will be reported to CMS prior 
to the publication of the FY 2024 IPF PPS final rule; therefore, the FY 
2025 payment determination is the first period for which we can remove 
this measure.
    We invite comments on our proposal.
b. Proposed Removal of the Tobacco Use Brief Intervention Provided or 
Offered and Tobacco Use Brief Intervention (TOB-2/2a) for FY 2025 and 
Subsequent Years
    We adopted the Tobacco Use Brief Intervention Provided or Offered 
and Tobacco Use Brief Intervention (TOB-2/2a) measure in the FY 2015 
IPF PPS final rule (79 FR 45971 through 45972) because of our belief 
that it is important to address the common comorbidity of tobacco use 
among IPF patients. The TOB-2/2a measure requires IPFs to chart-
abstract measure data on a sample of IPF patient records, in accordance 
with established sampling policies (80 FR 46717 through 46719). When we 
introduced the TOB-2/2a measure to the IPFQR Program, the benefits of 
this measure were high because IPF performance was not consistent with 
respect to, and there were no other measures addressing, provision of 
tobacco use cessation counseling or treatment. At the time, the TOB-2/
2a measure provided a means of distinguishing IPF performance 
regarding, and incentivized facilities to improve rates of, treatment 
for this common comorbidity. To further address tobacco use, we 
subsequently adopted the Tobacco Use Treatment Provided or Offered at 
Discharge and Tobacco Use Treatment at Discharge (TOB-3/3a) measure in 
the FY 2016 IPF PPS final rule (80 FR 46696 through 46699).
    In the FY 2022 IPF PPS proposed rule, we proposed to remove the 
Tobacco Use Brief Intervention Provided or Offered and Tobacco Use 
Brief Intervention (TOB-2/2a) measure from the IPFQR Program beginning 
with the FY 2024 payment determination under our measure removal factor 
8, the costs associated with a measure outweigh the benefit of its 
continued use in the program (86 FR 19508 through 19509). We expressed 
our belief that the quality improvement benefits from the TOB-2/2a 
measure had greatly diminished because performance had leveled off, 
that is overall performance on the measure was no longer improving. We 
took this to mean that most IPFs routinely offer tobacco use brief 
interventions.
    In the FY 2022 IPF PPS proposed rule, we also expressed our belief 
that the costs of maintaining this measure are high because costs are 
multi-faceted and include not only the IPFs' burden associated with 
reporting, but also our costs associated with implementing and 
maintaining the measure (86 FR 19508 through 19509). Additionally, we 
must expend resources in maintaining information collection systems, 
analyzing reported data, and providing public reporting of the 
collected information. We expressed that, for this measure, IPF 
information collection burden and related costs associated with 
reporting this measure to CMS were high because the measure is a chart-
abstracted measure. Furthermore, we observed CMS incurs costs 
associated with the program oversight of the measure for public 
display.
    However, in the FY 2022 IPF PPS final rule, we did not finalize our 
proposal to remove the Tobacco Use Brief Intervention Provided or 
Offered and Tobacco Use Brief Intervention (TOB-2/2a) measure (86 FR 
42648 through 42651). We stated that, following review of the public 
comments we received, we believed the benefits of continuing to 
encourage facilities to offer tobacco use brief interventions were 
greater than we had estimated. We noted that these benefits included 
the potential for IPFs to continue improving performance on the TOB-2/
2a measure, the importance of tobacco use interventions due to 
increased tobacco use during the COVID-19 pandemic, and this measure's 
potential influence on other quality improvement activities related to 
tobacco use.
    In our continual evaluation of the IPFQR Program measure set under 
our Meaningful Measures Framework and according to our measure removal 
and retention factors, we observed that having two measures addressing 
tobacco use, which are both associated with relatively high information 
collection burden, may not appropriately balance costs and benefits 
within the program. While we believe that both the TOB-2/2a measure and 
the TOB-3/3a measure address clinically important interventions to 
address smoking in this population, we believe that the overall cost 
associated with retaining both of these measures outweighs the benefit 
of having two measures to address treatment for the same comorbidity 
among the same patient population.
    Both measures capture information about tobacco cessation 
counseling and FDA-approved tobacco cessation medications. The 
difference between the measures is that the TOB-2/2a measure captures 
whether the tobacco cessation counseling and FDA-approved tobacco 
cessation medications were offered or refused during the inpatient 
stay, while the TOB-3/3a measure captures whether a referral to 
outpatient tobacco cessation counseling and FDA-approved tobacco 
cessation medications were offered or refused at the time of the 
patient's discharge.
    As we considered each of these measures, we determined that it 
would be more appropriate to retain the TOB-3/3a measure in the IPFQR 
Program, that is, to propose to remove the TOB-2/2a measure instead of 
the TOB-3/3a measure, because there is more opportunity for improvement 
on the TOB-3/3a measure. Specifically, the performance on the TOB-3/3a 
measure is lower than performance on the TOB-2/2a measure. National 
performance on TOB-2 and 2a measure and TOB-3 and 3a measure for the 
last five payment determination years in the IPFQR Program is presented 
in Table 19. Given the relatively high performance on the TOB-2/2a 
measure compared to the TOB-3/3a measure, we believe that retaining the 
TOB-3/3a measure, and

[[Page 21296]]

removing the TOB-2/2a measure, would provide more opportunity to drive 
improvement among IPFs; therefore, would potentially impact more 
patients.

      Table 19--National Performance on TOB-2 and TOB-2A and TOB-3 and TOB-3A From CY 2017 Through CY 2022
----------------------------------------------------------------------------------------------------------------
                                                       TOB-2          TOB-2a           TOB-3          TOB-3a
           Payment determination year               performance     performance     performance     performance
                                                        (%)             (%)             (%)             (%)
----------------------------------------------------------------------------------------------------------------
FY 2019.........................................            79.7            44.9            54.1            15.0
FY 2020.........................................            81.0            46.2            57.5            17.8
FY 2021.........................................            82.0            46.8            59.9            21.6
FY 2022.........................................            80.4            44.9            60.7            21.7
FY 2023.........................................            72.2            39.0            57.4            18.3
----------------------------------------------------------------------------------------------------------------

    As described earlier in this section V.F.2.b of this proposed rule, 
because the TOB-2/2a measure has a high cost (especially due to its 
high information collection burden), we believe that these high costs 
are no longer greater than the benefits of retaining this measure. 
Therefore, we believe measure removal factor 8 (that is, the costs 
associated with a measure outweigh the benefit of its continued use in 
the IPFQR Program), applies to the TOB-2/2a measure.
    Furthermore, the TOB-2/2a measure is no longer supported by the 
measure steward (that is, the Joint Commission), who withdrew it from 
the CBE endorsement process in 2018. Therefore, the TOB-2/2a measure 
has not been CBE endorsed since October 2018.\230\ Subsequent to this, 
the CBE-convened MAP's discussion of measure set removal for 2021and 
2022 included a discussion of this measure. Because the TOB-2/2a 
measure is a high-cost measure and is no longer CBE endorsed, the MAP 
recommended that we remove the measure from the IPFQR Program.\231\
---------------------------------------------------------------------------

    \230\ CMS Measures Inventory Tool. Tobacco Use Treatment 
Provided or Offered. Available at: https://cmit.cms.gov/cmit/#/MeasureView?variantId=1818§ionNumber=1.
    \231\ MAP 2021-2022 Considerations for Implementing Measures in 
Federal Programs. Available at: https://mmshub.cms.gov/sites/default/files/map_2021-2022_considerations_for_implementing_measures_in_federal_programs_final_report.pdf.
---------------------------------------------------------------------------

    We agree with the MAP that this is a high-cost measure. 
Furthermore, we recognize that it is similar to the other tobacco use 
measure in the IPFQR Program measure set (that is, the TOB-3/3a 
measure) which we do not propose to remove. Therefore, we propose to 
remove Tobacco Use Brief Intervention Provided or Offered and Tobacco 
Use Brief Intervention (TOB-2/2a) measure under our measure removal 
factor 8, ``the costs associated with a measure outweigh the benefit of 
its continued use in the program,'' beginning with FY 2025 payment 
determination. We note that data for the FY 2024 payment determination 
represents care provided in CY 2022 and will be reported to CMS prior 
to the publication of the FY 2024 IPF PPS final rule; therefore, the FY 
2025 payment determination is the first period for which we can remove 
this measure.
    We welcome public comment on this proposal.

G. Summary of IPFQR Program Measures

1. IPFQR Program Measures for the FY 2024 Payment Determination
    We do not propose any changes to our measure set for the FY 2024 
payment determination. The 14 measures which will be in the program for 
FY 2024 payment determination are shown in Table 20.

                    Table 20--IPFQR Program Measure Set for the FY 2024 Payment Determination
----------------------------------------------------------------------------------------------------------------
           CBE No.                               Measure ID                                 Measure
----------------------------------------------------------------------------------------------------------------
0640.........................  HBIPS-2.......................................  Hours of Physical Restraint Use.
0641.........................  HBIPS-3.......................................  Hours of Seclusion Use.
0560 *.......................  HBIPS-5.......................................  Patients Discharged on Multiple
                                                                                Antipsychotic Medications with
                                                                                Appropriate Justification.
N/A..........................  FAPH..........................................  Follow-Up After Psychiatric
                                                                                Hospitalization.
N/A *........................  SUB-2 and SUB-2a..............................  Alcohol Use Brief Intervention
                                                                                Provided or Offered and SUB-2a
                                                                                Alcohol Use Brief Intervention.
N/A *........................  SUB-3 and SUB-3a..............................  Alcohol and Other Drug Use
                                                                                Disorder Treatment Provided or
                                                                                Offered at Discharge and SUB-3a
                                                                                Alcohol and Other Drug Use
                                                                                Disorder Treatment at Discharge.
N/A *........................  TOB-2 and TOB-2a..............................  Tobacco Use Treatment Provided or
                                                                                Offered and TOB-2a Tobacco Use
                                                                                Treatment.
N/A *........................  TOB-3 and TOB-3a..............................  Tobacco Use Treatment Provided or
                                                                                Offered at Discharge and TOB-3a
                                                                                Tobacco Use Treatment at
                                                                                Discharge.
1659.........................  IMM-2.........................................  Influenza Immunization.
N/A *........................  N/A...........................................  Transition Record with Specified
                                                                                Elements Received by Discharged
                                                                                Patients (Discharges from an
                                                                                Inpatient Facility to Home/Self
                                                                                Care or Any Other Site of Care).
N/A..........................  N/A...........................................  Screening for Metabolic
                                                                                Disorders.
2860.........................  N/A...........................................  Thirty-Day All-Cause Unplanned
                                                                                Readmission Following
                                                                                Psychiatric Hospitalization in
                                                                                an Inpatient Psychiatric
                                                                                Facility.
3205.........................  Med Cont......................................  Medication Continuation Following
                                                                                Inpatient Psychiatric Discharge.

[[Page 21297]]

 
3636.........................  N/A...........................................  COVID-19 Healthcare Personnel
                                                                                (HCP) Vaccination Measure.
----------------------------------------------------------------------------------------------------------------
* Measure is no longer endorsed by the CBE but was endorsed at the time of adoption. We note that although
  section 1886(s)(4)(D)(i) of the Act generally requires measures specified by the Secretary be endorsed by the
  entity with a contract under section be endorsed by the entity with a contract under section 1890(a) of the
  Act, section 1886(s)(4)(D)(ii) states that in the case of a specified area or medical topic determined
  appropriate by the Secretary for which a feasible and practical measure has not been endorsed by the entity
  with a contract under section 1890(a) of the Act, the Secretary may specify a measure that is not so endorsed
  as long as due consideration is given to measures that have been endorsed or adopted by a consensus
  organization identified by the Secretary. We attempted to find available measures for each of these clinical
  topics that have been endorsed or adopted by a consensus organization and found no other feasible and
  practical measures on the topics for the IPF setting.

2. IPFQR Program Measures for the FY 2025 Payment Determination
    In this proposed rule, we propose to remove two measures for the FY 
2025 payment determination and subsequent years. We also propose to 
modify one measure for the FY 2025 payment determination and subsequent 
years. The 12 measures, which would be in the program for FY 2025 
payment determination if we finalize these proposals, are shown Table 
21.

   Table 21--IPFQR Program Measure Set for the FY 2025 Payment Determination if Proposals To Modify and Remove
                                             Measures Are Finalized
----------------------------------------------------------------------------------------------------------------
           CBE No.                               Measure ID                                 Measure
----------------------------------------------------------------------------------------------------------------
0640.........................  HBIPS-2.......................................  Hours of Physical Restraint Use.
0641.........................  HBIPS-3.......................................  Hours of Seclusion Use.
N/A..........................  FAPH..........................................  Follow-Up After Psychiatric
                                                                                Hospitalization.
1659.........................  IMM-2.........................................  Influenza Immunization.
N/A *........................  SUB-2 and SUB-2a..............................  Alcohol Use Brief Intervention
                                                                                Provided or Offered and SUB-2a
                                                                                Alcohol Use Brief Intervention.
N/A *........................  SUB-3 and SUB-3a..............................  Alcohol and Other Drug Use
                                                                                Disorder Treatment Provided or
                                                                                Offered at Discharge and SUB-3a
                                                                                Alcohol and Other Drug Use
                                                                                Disorder Treatment at Discharge.
N/A *........................  TOB-3 and TOB-3a..............................  Tobacco Use Treatment Provided or
                                                                                Offered at Discharge and TOB-3a
                                                                                Tobacco Use Treatment at
                                                                                Discharge.
N/A *........................  N/A...........................................  Transition Record with Specified
                                                                                Elements Received by Discharged
                                                                                Patients (Discharges from an
                                                                                Inpatient Facility to Home/Self
                                                                                Care or Any Other Site of Care).
N/A..........................  N/A...........................................  Screening for Metabolic
                                                                                Disorders.
2860.........................  N/A...........................................  Thirty-Day All-Cause Unplanned
                                                                                Readmission Following
                                                                                Psychiatric Hospitalization in
                                                                                an Inpatient Psychiatric
                                                                                Facility.
3205.........................  Med Cont......................................  Medication Continuation Following
                                                                                Inpatient Psychiatric Discharge.
N/A..........................  N/A...........................................  Modified COVID-19 Vaccination
                                                                                Coverage Among Healthcare
                                                                                Personnel (HCP)\1\.
----------------------------------------------------------------------------------------------------------------
* Measure is no longer endorsed by the CBE but was endorsed at the time of adoption. We note that although
  section 1886(s)(4)(D)(i) of the Act generally requires measures specified by the Secretary be endorsed by the
  entity with a contract under section 1890(a) of the Act, section 1886(s)(4)(D)(ii) states that in the case of
  a specified area or medical topic determined appropriate by the Secretary for which a feasible and practical
  measure has not been endorsed by the entity with a contract under section 1890(a) of the Act, the Secretary
  may specify a measure that is not so endorsed as long as due consideration is given to measures that have been
  endorsed or adopted by a consensus organization identified by the Secretary. We attempted to find available
  measures for each of these clinical topics that have been endorsed or adopted by a consensus organization and
  found no other feasible and practical measures on the topics for the IPF setting.
\1\ We have proposed updates to the COVID-19 HCP measure in section V.E. of this proposed rule.

3. IPFQR Program Measures for the FY 2026 Payment Determination
    If we finalize our proposals for the FY 2026 payment determination 
and subsequent years, the measure set would include 13 required and two 
voluntary measures. This includes the 12 required measures discussed in 
section V.G.2 of this proposed rule for the FY 2025 payment 
determination and subsequent years, as well as the one required measure 
and two voluntary measures we proposed for the FY 2026 payment 
determination and subsequent years. The measures which would be in the 
program for FY 2026 payment determination if we finalize these four 
proposals are shown Table 22.

Table 22--IPFQR Program Measure Set for the FY 2026 Payment Determination if Proposals To Adopt New Required and
                                        Voluntary Measures Are Finalized
----------------------------------------------------------------------------------------------------------------
           CBE No.                               Measure ID                                 Measure
----------------------------------------------------------------------------------------------------------------
                                                Required Measures
----------------------------------------------------------------------------------------------------------------
0640.........................  HBIPS-2.......................................  Hours of Physical Restraint Use.
0641.........................  HBIPS-3.......................................  Hours of Seclusion Use.
N/A..........................  FAPH..........................................  Follow-Up After Psychiatric
                                                                                Hospitalization.
1659.........................  IMM-2.........................................  Influenza Immunization.
N/A *........................  SUB-2 and SUB-2a..............................  Alcohol Use Brief Intervention
                                                                                Provided or Offered and SUB-2a
                                                                                Alcohol Use Brief Intervention.
N/A *........................  SUB-3 and SUB-3a..............................  Alcohol and Other Drug Use
                                                                                Disorder Treatment Provided or
                                                                                Offered at Discharge and SUB-3a
                                                                                Alcohol and Other Drug Use
                                                                                Disorder Treatment at Discharge.

[[Page 21298]]

 
N/A *........................  TOB-3 and TOB-3a..............................  Tobacco Use Treatment Provided or
                                                                                Offered at Discharge and TOB-3a
                                                                                Tobacco Use Treatment at
                                                                                Discharge.
N/A *........................  N/A...........................................  Transition Record with Specified
                                                                                Elements Received by Discharged
                                                                                Patients (Discharges from an
                                                                                Inpatient Facility to Home/Self
                                                                                Care or Any Other Site of Care).
N/A..........................  N/A...........................................  Screening for Metabolic
                                                                                Disorders.
2860.........................  N/A...........................................  Thirty-Day All-Cause Unplanned
                                                                                Readmission Following
                                                                                Psychiatric Hospitalization in
                                                                                an Inpatient Psychiatric
                                                                                Facility.
3205.........................  Med Cont......................................  Medication Continuation Following
                                                                                Inpatient Psychiatric Discharge.
N/A..........................  N/A...........................................  Modified COVID-19 Vaccination
                                                                                Coverage Among Healthcare
                                                                                Personnel (HCP).\1\
N/A..........................  Facility Commitment...........................  Facility Commitment to Health
                                                                                Equity.\2\
----------------------------------------------------------------------------------------------------------------
                                               Voluntary Measures
----------------------------------------------------------------------------------------------------------------
N/A..........................  Screening for SDOH............................  Screening for Social Drivers of
                                                                                Health.\3\
N/A..........................  Screen Positive...............................  Screen Positive Rate for Social
                                                                                Drivers of Health.\4\
----------------------------------------------------------------------------------------------------------------
* Measure is no longer endorsed by the CBE but was endorsed at time of adoption. We note that although section
  1886(s)(4)(D)(i) of the Act generally requires measures specified by the Secretary be endorsed by the entity
  with a contract under section 1890(a) of the Act, section 1886(s)(4)(D)(ii) states that in the case of a
  specified area or medical topic determined appropriate by the Secretary for which a feasible and practical
  measure has not been endorsed by the entity with a contract under section 1890(a) of the Act, the Secretary
  may specify a measure that is not so endorsed as long as due consideration is given to measures that have been
  endorsed or adopted by a consensus organization identified by the Secretary. We attempted to find available
  measures for each of these clinical topics that have been endorsed or adopted by a consensus organization and
  found no other feasible and practical measures on the topics for the IPF setting.
\1\ We have proposed updates to the COVID-HCP measure in section V.E. of this proposed rule.
\2\ We have proposed adoption of the Facility Commitment measure in section V.D.2. of this proposed rule.
\3\ We have proposed voluntary reporting of the Screening for SDOH measure in section V.D.3. of this proposed
  rule.
\4\ We have proposed voluntary reporting of the Screen Positive Rate for SDOH measure in section V.D.4 of this
  proposed rule.

4. IPFQR Program Measures for the FY 2027 IPFQR Program's Payment 
Determination
    If we finalize our proposals for the FY 2027 payment determination 
and subsequent years, the measure set would include 15 required 
measures and one voluntary measure. This includes the 13 required 
measures discussed in section V.G.3 of this proposed rule for the FY 
2026 payment determination and subsequent years, as well as the two 
measures which we proposed to require for the FY 2027 payment 
determination and subsequent years. It also includes the one new 
voluntary measure proposed in section V.D.5. of this proposed rule. The 
measures which would be in the program for the FY 2027 payment 
determination and subsequent years if we finalize these proposals are 
shown Table 23.

Table 23--IPFQR Program Measure Set for the FY 2027 Payment Determination if Proposals To Adopt New Required and
                                        Voluntary Measures Are Finalized
----------------------------------------------------------------------------------------------------------------
           CBE No.                               Measure ID                                 Measure
----------------------------------------------------------------------------------------------------------------
                                                Required Measures
----------------------------------------------------------------------------------------------------------------
0640.........................  HBIPS-2.......................................  Hours of Physical Restraint Use.
0641.........................  HBIPS-3.......................................  Hours of Seclusion Use.
N/A..........................  FAPH..........................................  Follow-Up After Psychiatric
                                                                                Hospitalization.
1659.........................  IMM-2.........................................  Influenza Immunization.
N/A *........................  SUB-2 and SUB-2a..............................  Alcohol Use Brief Intervention
                                                                                Provided or Offered and SUB-2a
                                                                                Alcohol Use Brief Intervention.
N/A *........................  SUB-3 and SUB-3a..............................  Alcohol and Other Drug Use
                                                                                Disorder Treatment Provided or
                                                                                Offered at Discharge and SUB-3a
                                                                                Alcohol and Other Drug Use
                                                                                Disorder Treatment at Discharge.
N/A *........................  TOB-3 and TOB-3a..............................  Tobacco Use Treatment Provided or
                                                                                Offered at Discharge and TOB-3a
                                                                                Tobacco Use Treatment at
                                                                                Discharge.
N/A *........................  N/A...........................................  Transition Record with Specified
                                                                                Elements Received by Discharged
                                                                                Patients (Discharges from an
                                                                                Inpatient Facility to Home/Self
                                                                                Care or Any Other Site of Care).
N/A..........................  N/A...........................................  Screening for Metabolic
                                                                                Disorders.
2860.........................  N/A...........................................  Thirty-Day All-Cause Unplanned
                                                                                Readmission Following
                                                                                Psychiatric Hospitalization in
                                                                                an Inpatient Psychiatric
                                                                                Facility.
3205.........................  Med Cont......................................  Medication Continuation Following
                                                                                Inpatient Psychiatric Discharge.
N/A..........................  N/A...........................................  Modified COVID-19 Vaccination
                                                                                Coverage Among Healthcare
                                                                                Personnel (HCP).\1\
N/A..........................  Facility Commitment...........................  Facility Commitment to Health
                                                                                Equity.\2\
N/A..........................  Screening for SDOH............................  Screening for Social Drivers of
                                                                                Health.\3\
N/A..........................  Screen Positive...............................  Screen Positive Rate for Social
                                                                                Drivers of Health.\4\
----------------------------------------------------------------------------------------------------------------

[[Page 21299]]

 
                                                Voluntary Measure
----------------------------------------------------------------------------------------------------------------
N/A..........................  PIX...........................................  Psychiatric Inpatient Experience
                                                                                Survey.\5\
----------------------------------------------------------------------------------------------------------------
* Measure is no longer endorsed by the CBE but was endorsed at time of adoption. Although section
  1886(s)(4)(D)(i) of the Act generally requires that any measures specified by the Secretary shall be endorsed
  by the entity with a contract under section 1890(a) of the Act, section 1886(s)(4)(D)(ii) states that in the
  case of a specified area or medical topic determined appropriate by the Secretary for which a feasible and
  practical measure has not been endorsed by the entity with a contract under section 1890(a) of the Act, the
  Secretary may specify a measure that is not so endorsed as long as due consideration is given to measures that
  have been endorsed or adopted by a consensus organization identified by the Secretary. We attempted to find
  available measures for each of these clinical topics that have been endorsed or adopted by a consensus
  organization and found no other feasible and practical measures on the topics for the IPF setting.
\1\ We have proposed updates to the COVID-HCP measure in Section V.E. of this proposed rule.
\2\ We have proposed adoption of the Facility Commitment measure in section V.D.2. of this proposed rule.
\3\ We have proposed adoption of the Screening for SDOH measure in section V.D.3. of this proposed rule.
\4\ We have proposed adoption of the Screen Positive measure in section V.D.4. of this proposed rule.
\5\ We have proposed voluntary reporting of the Psychiatric Inpatient Experience measure in section V.D.5. of
  this proposed rule.

5. IPFQR Program Measures for the FY 2028 Payment Determination
    If we finalize our proposals for the FY 2028 payment determination 
and subsequent years, the measure set would include 16 required 
measures. This includes the 15 required measures discussed in section 
V.G.4 and V.G.5 of this proposed rule for the FY 2027 payment 
determination as well as the measure which we proposed to require 
beginning with the FY 2028 payment determination. The measures which 
would be in the program beginning with the FY 2028 payment 
determination if we finalize these proposals are shown Table 24.

Table 24--IPFQR Program Measure Set for the FY 2029 Payment Determination if Proposals To Adopt New Required and
                                        Voluntary Measures Are Finalized
----------------------------------------------------------------------------------------------------------------
           CBE No.                               Measure ID                                 Measure
----------------------------------------------------------------------------------------------------------------
0640.........................  HBIPS-2.......................................  Hours of Physical Restraint Use.
0641.........................  HBIPS-3.......................................  Hours of Seclusion Use.
N/A..........................  FAPH..........................................  Follow-Up After Psychiatric
                                                                                Hospitalization.
1659.........................  IMM-2.........................................  Influenza Immunization.
N/A*.........................  SUB-2 and SUB-2a..............................  Alcohol Use Brief Intervention
                                                                                Provided or Offered and SUB-2a
                                                                                Alcohol Use Brief Intervention.
N/A*.........................  SUB-3 and SUB-3a..............................  Alcohol and Other Drug Use
                                                                                Disorder Treatment Provided or
                                                                                Offered at Discharge and SUB-3a
                                                                                Alcohol and Other Drug Use
                                                                                Disorder Treatment at Discharge.
N/A*.........................  TOB-3 and TOB-3a..............................  Tobacco Use Treatment Provided or
                                                                                Offered at Discharge and TOB-3a
                                                                                Tobacco Use Treatment at
                                                                                Discharge.
N/A*.........................  N/A...........................................  Transition Record with Specified
                                                                                Elements Received by Discharged
                                                                                Patients (Discharges from an
                                                                                Inpatient Facility to Home/Self
                                                                                Care or Any Other Site of Care).
N/A..........................  N/A...........................................  Screening for Metabolic
                                                                                Disorders.
2860.........................  N/A...........................................  Thirty-Day All-Cause Unplanned
                                                                                Readmission Following
                                                                                Psychiatric Hospitalization in
                                                                                an Inpatient Psychiatric
                                                                                Facility.
3205.........................  Med Cont......................................  Medication Continuation Following
                                                                                Inpatient Psychiatric Discharge.
N/A..........................  N/A...........................................  Modified COVID-19 Vaccination
                                                                                Coverage Among Healthcare
                                                                                Personnel (HCP).\1\
N/A..........................  Facility Commitment...........................  Facility Commitment to Health
                                                                                Equity.\2\
N/A..........................  Screening for SDOH............................  Screening for Social Drivers of
                                                                                Health.\3\
N/A..........................  Screen Positive...............................  Screen Positive Rate for Social
                                                                                Drivers of Health.\4\
N/A..........................  PIX...........................................  Psychiatric Inpatient Experience
                                                                                Survey.\5\
----------------------------------------------------------------------------------------------------------------
* Measure is no longer endorsed by the CBE but was endorsed at time of adoption. Although section
  1886(s)(4)(D)(i) of the Act generally requires that any measures specified by the Secretary shall be endorsed
  by the entity with a contract under section 1890(a) of the Act, section 1886(s)(4)(D)(ii) states that in the
  case of a specified area or medical topic determined appropriate by the Secretary for which a feasible and
  practical measure has not been endorsed by the entity with a contract under section 1890(a) of the Act, the
  Secretary may specify a measure that is not so endorsed as long as due consideration is given to measures that
  have been endorsed or adopted by a consensus organization identified by the Secretary. We attempted to find
  available measures for each of these clinical topics that have been endorsed or adopted by a consensus
  organization and found no other feasible and practical measures on the topics for the IPF setting.
\1\ We have proposed updates to the COVID-HCP measure in Section V.E. of this proposed rule.
\2\ We have proposed adoption of the Facility Commitment measure in section V.D.2. of this proposed rule.
\3\ We have proposed adoption of the Screening for SDOH measure in section V.D.3. of this proposed rule.
\4\ We have proposed adoption of the Screen Positive measure in section V.D.4. of this proposed rule.
\5\ We have proposed required reporting of the Psychiatric Inpatient Experience measure in section V.D.5. of
  this proposed rule.

H. Public Display and Review Requirements

    In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53653 through 
53654), we adopted procedures for making data submitted under the IPFQR 
Program available to the public, after an IPF has the opportunity to 
review such data prior to public display, as required by section 
1886(s)(4)(E) of the Act. We adopted modifications to these procedural 
requirements in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50897 
through 50898), and the FY 2017 IPPS/LTCH PPS final rule (81 FR 57248 
through 57249).
    Specifically, the IPFQR Program adopted a policy to provide IPFs a 
30-day period to review their data, and submit corrections to errors 
resulting

[[Page 21300]]

from CMS calculations, prior to public display on a CMS website. The 
IPFQR Program notifies IPFs of the exact timeframes for this preview 
period and public display through subregulatory guidance. We do not 
propose any changes to these requirements.
    We propose to codify the procedural requirements for public 
reporting of IPFQR Program data at Sec.  412.433(g). If finalized, 
paragraph (g) would provide that IPFs will have a period of 30 days to 
review data on quality measures that CMS received under the IPFQR 
Program, and submit corrections to errors resulting from CMS 
calculations, prior to CMS publishing this data on a CMS website.
    We welcome comments on our proposals to codify these policies.

I. Form, Manner, and Timing of Quality Data Submission for the FY 2024 
Payment Determination and Subsequent Years

Procedural Requirements for the FY 2024 Payment Determination and 
Subsequent Years
    We refer readers to the FY 2013 IPPS/LTCH PPS final rule (77 FR 
53654 through 53655), the FY 2014 IPPS/LTCH PPS final rule (78 FR 50898 
through 50899), the FY 2018 IPPS/LTCH PPS final rule (82 FR 38471 
through 38472), and the FY 2022 IPF PPS final rule (86 FR 42656 through 
42657) for our previously finalized procedural requirements for 
participation in, and withdrawal from, the IPFQR Program, as well as 
data submission requirements. We do not propose any changes to our 
previously finalized procedural requirements.
    We propose to codify these procedural requirements for 
participation in the IPFQR Program at Sec.  412.433(b) through (d). If 
finalized, paragraphs (b) through (d) would set forth the procedural 
requirements for an IPF to register for, or withdraw from, 
participation in the IPFQR Program and to submit the required data on 
measures in a form and manner and time specified by CMS.
    We welcome comments on our proposal to codify these policies.
2. Data Submission Requirements for the FY 2025 Payment Determination 
and Subsequent Years
    We refer readers to the FY 2013 IPPS/LTCH PPS final rule (77 FR 
53655 through 53657), the FY 2014 IPPS/LTCH PPS final rule (78 FR 50899 
through 50900), the FY 2018 IPPS/LTCH PPS final rule (82 FR 38472 
through 38473), and the FY 2022 IPF PPS final rule (86 FR 42657 through 
42661) for our previously finalized data submission requirements.
    The measure we propose to modify beginning with the FY 2025 payment 
determination--the COVID-19 Vaccination Coverage Among HCP measure--
requires facilities to report data on the number of HCP who have 
received a complete vaccination course of a COVID-19 vaccine through 
the Centers for Disease Control and Prevention's (CDC's) National 
Healthcare Safety Network (NHSN). We propose to update this measure to 
no longer refer to ``complete vaccination course'' but instead to refer 
to ``up-to-date'' vaccination, as described in section V.E. of this 
proposed rule.
    We do not propose any updates to the form, manner, and timing of 
data submission for the COVID-19 Vaccination Coverage Among HCP measure 
and refer readers to the FY 2022 IPF PPS final rule (86 FR 42657) for 
these policies.
3. Data Submission Requirements for the FY 2026 Payment Determination 
and Subsequent Years
    In sections V.D 3 and V.D.4 of this proposed rule, we propose to 
adopt measures for voluntary reporting for the FY 2026 IPFQR Program 
and required reporting for the FY 2027 IPFQR Program's payment 
determination and subsequent years. These measures are the Screening 
for Social Drivers of Health measure and Screen Positive Rate for 
Social Drivers of Health measure. We propose that our previously 
finalized data submission requirements, specifically, our previously 
finalized data submission requirements for aggregate data reporting 
described in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38472 through 
38473) would apply to these measures.
    We invite public comment on this proposal.
4. Data Submission Requirements for the FY 2027 Payment Determination 
and Subsequent Years
    In section V.D.5. of this proposed rule, we are proposing to adopt 
one patient-reported measure, Psychiatric Inpatient Experience (PIX) 
measure for voluntary reporting beginning in the FY 2027 program year 
and required reporting beginning with the FY 2028 payment 
determination. Because, unlike other patient experience of care 
measures, this measure is collected by facilities prior to discharge, 
we are proposing that facilities would report these data using the 
patient-level data reporting described in the FY 2022 IPF PPS final 
rule (86 FR 42658 through 42661).
5. Proposed Data Validation Pilot Beginning With Data Submitted in 2025
    As discussed in the FY 2019 IPF PPS final rule (83 FR 28607) and in 
the FY 2022 IPF PPS final rule (86 FR 42661), we are concerned that the 
ability to detect error is lower for aggregate measure data reporting 
than for patient-level data reporting (that is, data regarding each 
patient included in a measure and, for example, whether the patient was 
included in the numerator and denominator of the measure). In the FY 
2022 IPF PPS final rule, we noted that adoption of patient-level data 
requirements would enable us to adopt a data validation policy for the 
IPFQR Program in the future (86 FR 42661). We believe that it would be 
appropriate to develop such a policy incrementally through adoption of 
a data validation pilot prior to national implementation of data 
validation within the IPFQR Program. We sought public input on a 
potential data validation pilot, and many commenters supported the 
concept of data validation following implementation of patient-level 
reporting (86 FR 42661). In the FY 2022 IPF PPS final rule, we adopted 
required patient-level reporting beginning with data submitted in CY 
2023 affecting the FY 2024 payment determination and reflecting care 
provided during CY 2022 (86 FR 42658 through 42661).
    We now propose a data validation pilot beginning with data 
submitted in CY 2024 (reflecting care provided during CY 2023). When we 
sought public comment on a data validation pilot in the FY 2022 IPF PPS 
proposed rule (86 FR 19515), we requested input on potential elements 
of such a pilot, including the number of measures and the number of 
participating IPFs. As summarized in the FY 2022 IPF PPS final rule (86 
FR 42661), one commenter recommended selecting two measures and 200 
IPFs for this pilot. We considered that recommendation; however, to 
align with validation policies in our other quality reporting programs, 
we decided to request a specific number of charts. Specifically, we are 
proposing to request eight charts per quarter from each IPF as opposed 
to requesting all of the charts that each facility used to calculate 
one or more specific measures. We also decided to initiate our pilot 
with fewer IPFs than the commenter recommended to limit the burden 
associated with this pilot.
    We also reviewed the validation policies of other quality reporting 
programs. We specifically reviewed the Hospital IQR Program's chart-
abstracted

[[Page 21301]]

measure validation policies described in the FY 2017 IPPS/LTCH PPS 
final rule (81 FR 57179 through 57180), the Hospital IQR Program's 
pilot for eCQM validation described in the FY 2015 IPPS/LTCH PPS final 
rule (79 FR 50262 through 50273), the Hospital Outpatient Quality 
Reporting (OQR) Program's planned pilot of data validation as described 
in the CY 2009 OPPS/ASC final rule (73 FR 68502), and the Hospital OQR 
Program's finalized validation policies as described in the CY 2012 
OPPS/ASC final rule (76 FR 74485) and the CY 2018 OPPS/ASC final rule 
(82 FR 59441 through 5944) because these programs are also pay-for-
reporting programs, like the IPFQR Program.
    Following our review of the validation policies within these 
programs, we propose a validation pilot in which we would randomly 
select on an annual basis up to 100 IPFs and request each selected IPF 
to provide to CMS eight charts per quarter, a total of 32 charts per 
year, used to calculate all chart-based measures beginning with data 
submitted in CY 2025. We believe that randomly selecting up to 100 IPFs 
would provide a sufficiently large set of IPFs to meaningfully test our 
validation procedures while minimizing burden for IPFs. We would 
specify the timeline and mechanism for submitting data in our data 
requests to individual IPFs that have been selected to participate in 
the validation pilot. We note that consistent with the Hospital IQR 
Program, we would reimburse IPFs for the cost of submitting charts for 
validation at a rate of $3.00 per chart (85 FR 58949).
    Because this is a voluntary pilot, we recognize that some selected 
IPFs would not participate; however, we believe that this pilot would 
be beneficial for IPFs that do participate as an opportunity to receive 
education and feedback on the data they submit prior to future proposal 
and adoption of a validation requirement in the IPFQR Program.
    We invite comment on our proposal.
6. Quality Measure Sampling Requirements
    We refer readers to the FY 2013 IPPS/LTCH PPS final rule (77 FR 
53657 through 53658), the FY 2014 IPPS/LTCH PPS final rule (78 FR 50901 
through 50902), the FY 2016 IPF PPS final rule (80 FR 46717 through 
46719), and the FY 2019 IPF PPS final rule (83 FR 38607 through 38608) 
for discussions of our previously finalized sampling policies.
    Because the Facility Commitment to Health Equity measure proposed 
in section V.D.2 of this proposed rule is a structural attestation 
measure, these policies would not apply to that measure. Additionally, 
because the Screening for Social Drivers of Health measure (described 
in section V.D.3 of this proposed rule) would apply to all patients and 
the Screen Positive Rate for Social Drivers of Health measure 
(described in section V.D.4 of this proposed rule) would apply to all 
patients who had been screened for health-related social needs (HRSNs), 
our previously finalized sampling policies would not apply to these two 
measures. As described in the FY 2022 IPF PPS final rule, our sampling 
policies do not apply to the COVID-19 Vaccination Coverage Among 
Healthcare Personnel measure because the denominator is all healthcare 
personnel (86 FR 42661).
    Generally, we have applied our sampling procedures to chart-
abstracted measures, where appropriate (that is, where the measure does 
not require application to the entire patient population). However, 
because the PIX survey measure is a patient reported measure, we have 
considered whether our sampling procedures for chart-abstracted 
measures are appropriate for this measure. After consideration of our 
current sampling procedures and sampling for patient reported measures 
in other quality reporting programs (specifically, the requirements for 
reporting the HCAHPS measure), we are proposing that the PIX survey 
measure (described in section V.D.5 of this proposed rule) would be 
eligible for sampling but would not be included in the global sample. 
Instead, we are proposing that sampling for this measure would align 
with sampling for the HCAHPS survey measure in acute care hospitals and 
the Hospital IQR Program as described in the HCAHPS Quality Assurance 
Guidelines.\232\ Specifically, we are proposing to require IPFs to 
develop sampling plans that ensure that IPFs are able to submit data 
for 300 completed PIX surveys per year. IPFs would be required to 
sample from every month throughout the entire reporting period and not 
stop sampling or curtail ongoing interview activities once a certain 
number of completed surveys has been attained. IPFs that are unable to 
reach 300 completed surveys through sampling would be required to 
submit data on survey results for all eligible patient discharges.
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    \232\ HCHAPS Quality Assurance Guidelines, Version 17.0. March 
2022. Available at: https://hcahpsonline.org/globalassets/hcahps/quality-assurance/2022_qag_v17.0.pdf.
---------------------------------------------------------------------------

    We invite public comment on our proposal.
7. Non-Measure Data Collection
    We refer readers to the FY 2015 IPF PPS final rule (79 FR 45973), 
the FY 2016 IPF PPS final rule (80 FR 46717), and the FY 2019 IPF PPS 
final rule (83 FR 38608) for our previously finalized non-measure data 
collection policies. We do not propose any changes to these policies.
8. Accuracy and Completeness Acknowledgement (DACA) Requirements
    We refer readers to the FY 2013 IPPS/LTCH PPS final rule (77 FR 
53658) for our previously finalized DACA requirements. We do not 
propose any changes to these policies.

J. Reconsideration and Appeals Procedures

    We refer readers to 42 CFR 412.434 for the IPFQR Program's 
reconsideration and appeals procedures. We do not propose any changes 
to these policies.

K. Extraordinary Circumstances Exceptions (ECE) Policy

    We refer readers to the FY 2013 IPPS/LTCH PPS final rule (77 FR 
53659 through 53660), the FY 2014 IPPS/LTCH PPS final rule (78 FR 
50903), the FY 2015 IPF PPS final rule (79 FR 45978), and the FY 2018 
IPPS/LTCH PPS final rule (82 FR 38473 through 38474) for our previously 
finalized Extraordinary Circumstances Exceptions policies. We do not 
propose any changes to these policies.
    We propose to codify the ECE policies at Sec.  412.433(f). If 
finalized, paragraph (f) would provide that we may grant an exception 
to one or more data submission deadlines and requirements in the event 
of extraordinary circumstances beyond the control of the IPF either in 
response to a request by the IPF or at our discretion if we determine 
an extraordinary circumstance occurred.
    We welcome comments on our proposal to codify these policies.

VI. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et 
seq.), we are required to provide 60-day notice in the Federal Register 
and solicit public comment before a ``collection of information'' 
requirement is submitted to the Office of Management and Budget (OMB) 
for review and approval. For the purposes of the PRA and this section 
of the preamble, collection of information is defined under 5 CFR 
1320.3(c) of the PRA's implementing regulations.
    To fairly evaluate whether an information collection should be

[[Page 21302]]

approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act 
of 1995 requires that we solicit comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    We are soliciting public comment (see section VI.C of this proposed 
rule) on each of these issues for the following sections of this 
document that contain information collection requirements. Comments, if 
received, will be responded to within the subsequent final rule.

A. Wage Estimates

    To derive average costs, we used data from the U.S. Bureau of Labor 
Statistics' (BLS') May 202/1 National Occupational Employment and Wage 
Estimates for all salary estimates (https://www.bls.gov/oes/current/oes_nat.htm). In this regard, Table 25 presents BLS' mean hourly wage 
for Medical Records and Health Information Technicians (the occupation 
title that we have estimated is appropriate for completing data 
collection and reporting under the IPFQR Program), our estimated cost 
of fringe benefits and other indirect costs (calculated at 100 percent 
of salary), and our adjusted hourly wage.

                                Table 25--Wage Assumptions for the IPFQR Program
----------------------------------------------------------------------------------------------------------------
                                                                                                       Adjusted
                                                     Occupation    Median hourly    Fringe benefits     hourly
                 Occupation title                       code       wage ($/hr.)   and other indirect   wage ($/
                                                                                     costs ($/hr.)       hr.)
----------------------------------------------------------------------------------------------------------------
Medical Records and Health Information Technician.      29-2071           22.43               22.43       44.86
----------------------------------------------------------------------------------------------------------------

    As indicated, we are adjusting our hourly wage estimates by a 
factor of 100 percent. This is necessarily a rough adjustment, both 
because fringe benefits and other indirect costs vary significantly 
from employer to employer, and because methods of estimating these 
costs vary widely from study to study. Nonetheless, we believe that 
doubling the hourly wage to estimate the total cost is a reasonably 
accurate estimation method.
    In the FY 2022 IPF PPS final rule (86 FR 42662), which was the most 
recent rule in which we adopted updates to the IPFQR Program, we 
estimated that reporting measures for the IPFQR Program could be 
accomplished by a Medical Records and Health Information Technician 
(BLS Occupation Code: 29-2071) with a median hourly wage of $20.50/hour 
(BLS, May 2019). While we are not changing the respondent's occupation 
title or occupation code, we are proposing to adjust our cost estimates 
using BLS' May 2021 median wage rate figure of $22.43/hour, an increase 
of $1.93/hour ($22.43/hour-$20.50/hour). When factoring in our overhead 
and other indirect cost adjustments, the wage is increased by $3.86/
hour ($44.86/hour-$41.00/hour).
    We have also estimated the average hourly cost for beneficiaries 
undertaking administrative and other tasks on their own time. Based on 
recommendations from the Valuing Time in U.S. Department of Health and 
Human Services Regulatory Impact Analyses \233\ guidance we have 
estimated a post-tax wage of $20.71/hr. The Valuing Time in U.S. 
Department of Health and Human Services Regulatory Impact Analyses: 
Conceptual Framework and Best Practices identifies the approach for 
valuing time when individuals undertake activities on their own time. 
To derive the costs for beneficiaries, a measurement of the usual 
weekly earnings of wage and salary workers of $998, divided by 40 hours 
to calculate an hourly pre-tax wage rate of $24.95/hours. This rate is 
adjusted downwards by an estimate of the effective tax rate for median 
income households of about 17 percent, resulting in the post-tax hourly 
wage rate of $20.71/hour. Unlike our State and private sector wage 
adjustments, we are not adjusting beneficiary wages for fringe benefits 
and other indirect costs since the individuals' activities, if any, 
would occur outside the scope of their employment.
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    \233\ https://aspe.hhs.gov/sites/default/files/private/pdf/257746/VOT.pdf.
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B. Proposed Information Collection Requirements (ICRs) Regarding the 
IPFQR Program

    The following proposed requirement and burden changes will be 
submitted to OMB for review under control number 0938-1171 (CMS-10432). 
We are not proposing changes that will affect any of data collection 
instruments that are currently approved under that control number. In 
section VI.B.1 of this proposed rule, we restate our currently approved 
burden estimates. In section VI.B.2 of this proposed rule, we estimate 
the changes in burden associated with the policies proposed in this 
rule and updated estimates for wage rates, facility counts, and case 
counts. Then in section VI.B.3 of this proposed rule, we provide an 
overview of the total estimated burden.
1. Currently Approved Burden
    For a detailed discussion of the burden for the IPFQR Program 
requirements that we have previously adopted, we refer readers to the 
following rules:
     The FY 2013 IPPS/LTCH PPS final rule (77 FR 53673);
     The FY 2014 IPPS/LTCH PPS final rule (78 FR 50964);
     The FY 2015 IPF PPS final rule (79 FR 45978 through 
45980);
     The FY 2016 IPF PPS final rule (80 FR 46720 through 
46721);
     The FY 2017 IPPS/LTCH PPS final rule (81 FR 57265 through 
57266);
     The FY 2018 IPPS/LTCH PPS final rule (82 FR 38507 through 
38508);
     The FY 2019 IPF PPS final rule (83 FR 38609 through 
38612);
     The FY 2020 IPF PPS final rule (84 FR 38468 through 
38476); and
     The FY 2022 IPF PPS final rule (86 FR 42661 through 
42672).
    Table 26 provides an overview of our currently approved burden 
estimates.

[[Page 21303]]



                                            TABLE 26--Currently Approved Burden OMB Control Number 0938-1171
                                                                       [CMS-10432]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Number        Estimated      Total       Time per     Annual time      Total
            Measure/response description               respondents     responses      annual      response    per facility   annual time   Total annual
                                                      (facilities)   per facility   responses     (hours)        (hours)       (hours)       cost ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Hours of Physical Restraint Use....................           1,634         1,346    2,199,364         0.25          336.50      549,841      22,543,481
Hours of Seclusion Use.............................           1,634         1,346    2,199,364         0.25          336.50      549,841      22,543,481
Patients Discharged on Multiple Antipsychotic                 1,634         * 609      995,106         0.25          152.25    248,776.5   10,199,836.50
 Medications with Appropriate Justification........
Alcohol Use Brief Intervention Provided or Offered            1,634         * 609      995,106         0.25          152.25    248,776.5   10,199,836.50
 (SUB-2 and SUB-2a)................................
Alcohol and Other Drug Use Disorder Treatment                 1,634         * 609      995,106         0.25          152.25    248,776.5   10,199,836.50
 Provided or Offered at Discharge and Alcohol and
 Other Drug Use Disorder Treatment at Discharge
 (SUB-3 and SUB-3a)................................
Tobacco Use Treatment Provided or Offered and                 1,634         * 609      995,106         0.25          152.25    248,776.5   10,199,836.50
 Tobacco Use Treatment (TOB-2 and TOB-2a)..........
Tobacco Use Treatment Provided or Offered at                  1,634         * 609      995,106         0.25          152.25    248,776.5   10,199,836.50
 Discharge and Tobacco Use Treatment at Discharge
 (TOB-3 and TOB-3a)................................
Influenza Immunization.............................           1,634         * 609      995,106         0.25          152.25    248,776.5   10,199,836.50
Transition Record with Specified Elements Received            1,634         * 609      995,106         0.25          152.25    248,776.5   10,199,836.50
 by Discharged Patients (Discharges from an
 Inpatient Facility to Home/Self Care or Any Other
 Site of Care).....................................
Screening for Metabolic Disorders..................           1,634         * 609      995,106         0.25          152.25    248,776.5   10,199,836.50
Thirty-day all-cause unplanned readmission                        0          ** 0            0            0               0            0               0
 following psychiatric hospitalization in an IPF...
Medication Continuation Following Inpatient                       0          ** 0            0            0               0            0               0
 Psychiatric Discharge.............................
COVID-19 Vaccination Rate Among Healthcare                        0         *** 0            0            0               0            0               0
 Personnel.........................................
Follow-Up After Psychiatric Hospitalization........               0          ** 0            0            0               0            0               0
                                                    ----------------------------------------------------------------------------------------------------
    Subtotal.......................................           1,634         7,564   12,359,576          N/A           1,891    3,089,894     126,685,654
--------------------------------------------------------------------------------------------------------------------------------------------------------
Non-Measure Data Collection and Reporting..........           1,634             4        6,536          0.5             2.0        3,268         133,988
                                                    ----------------------------------------------------------------------------------------------------
    Total..........................................           1,634         7,568   12,366,112       Varies           1,893    3,093,162     126,819,642
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Under our previously finalized ``global sample'' (80 FR 46717 through 46718) we allow facilities to apply the same sampling methodology to all
  measures eligible for sampling. In the FY 2016 IPF PPS final rule (80 FR 46718), we finalized that facilities with between 609 and 3,056 cases that
  choose to participate in the global sample would be required to report data for 609 cases. Because facilities are only required to submit data on a
  number specified by the global sampling methodology, rather than abstracting data for all patients or applying measure specific sampling
  methodologies, we believe that the number of cases under the global sample is a good approximation of facility burden associated with these measures.
  Therefore, for the average IPF discharge rate of 1,346 discharges the global sample requires abstraction of 609 records.
** CMS will collect these data using Medicare Part A and Part B claims; therefore, these measures will not require facilities to submit data on any
  cases.
*** The COVID-19 HCP measure will be calculated using data submitted to the CDC under a separate OMB control number (0920-1317).

2. Adjustments Due to Changes in This Proposed Rule
    In this proposed rule, we propose provisions that impact policies 
beginning with the FY 2025 through FY 2028 payment determinations. For 
the purposes of calculating burden, we attribute the costs to the year 
in which the costs begin. For example, data submission for the measures 
that affect the FY 2025 payment determination occurs during CY 2024 and 
generally reflects are provided during CY 2023. The following 
discussion describes the burden changes for proposals attributed to the 
year in which the costs begin. For the proposals in this proposed rule, 
those years are CY 2023 through CY 2027.
    Additionally, in the FY 2022 IPF PPS final rule (86 FR 42661 
through 42672), which is the most recent rule that updated the IPFQR 
Program policies, we estimated that there were 1,634 participating IPFs 
and that (for measures that require reporting on the entire patient 
population) these IPFs will report on an average of 1,346 cases per 
IPF. In this FY 2024 IPF PPS proposed rule, we are proposing to adjust 
our IPF count and case estimates by using the most recent data 
available. Specifically, we estimate that there are now approximately 
1,596 facilities (a decrease of 38 facilities) and an average of 1,261 
cases per facility (a decrease of 85 cases per facility). We will 
update our estimates, as applicable, using these revised estimates in 
the following subsections.
a. Proposals Affecting Data Reporting Beginning in CY 2023
    In section V.E of this proposed rule, we propose to modify the 
COVID-19 Vaccination Coverage Among Healthcare Personnel measure 
beginning with data reflecting the fourth quarter of CY 2023 affecting 
the FY 2025 payment determination. We do not believe that the proposed 
modification (that is, a change in terminology to refer to ``up-to-
date'' instead of ``complete vaccination course'') would impact our 
currently approved IPF information collection requirements or reporting 
burden. Furthermore, the modified COVID-19 Vaccination Coverage Among 
HCP measure would be calculated using data submitted to the CDC for 
healthcare safety surveillance under the CDC's OMB control number 0920-
1317. In this regard, the CDC owns the requirements and burden that 
fall under that control number.
b. Proposals Affecting Burden Beginning With CY 2024
(1) Proposed Updates Affecting Facility Reporting Burden
    In section V.F.2 of this proposed rule, we propose to remove two 
measures beginning with the FY 2025 payment determination. Data for 
these measures would be submitted in CY 2024, so we are estimating the 
reduced burden to occur in CY 2024. These two measures are:
     Patients Discharged on Multiple Antipsychotic Medications 
with

[[Page 21304]]

Appropriate Justification (HBIPS-5); and
     Tobacco Use Treatment Provided or Offered and Tobacco Use 
Treatment (TOB-2 and TOB-2a).
    Using our currently approved burden estimates, the change in total 
burden associated with these proposed measure removals would be minus 
1,990,212 responses, minus 497,553 hours, and minus $20,339,673 as 
depicted in Table 27.

                                          Table 27--Updates to Burden Associated With Proposed Measure Removals
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                          Number         Estimated                       Time per       Annual time
    Measure/response description        respondents    responses per   Total annual      response      per facility    Total annual    Total annual cost
                                       (facilities)      facility        responses        (hours)         (hours)      time (hours)           ($)
                                                 (a)             (b)     (c) = (a) x             (d)     (e) = (b) x     (f) = (a) x  (g) = (f) x $41.00/
                                                                                 (b)                             (d)             (e)                  hr
--------------------------------------------------------------------------------------------------------------------------------------------------------
Patients Discharged on Multiple                1,634         (* 609)       (995,106)            0.25        (152.25)     (248,776.5)     (10,199,836.50)
 Antipsychotic Medications with
 Appropriate Justification..........
Tobacco Use Treatment Provided or              1,634         (* 609)       (995,106)            0.25        (152.25)     (248,776.5)     (10,199,836.50)
 Offered and Tobacco Use Treatment
 (TOB-2 and TOB-2a).................
                                     -------------------------------------------------------------------------------------------------------------------
  Total.............................           1,634         (1,218)     (1,990,212)            0.25         (304.5)       (497,553)        (20,339,673)
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Under our previously finalized ``global sample'' (80 FR 46717 through 46718) we allow facilities to apply the same sampling methodology to all
  measures eligible for sampling. In the FY 2016 IPF PPS final rule (80 FR 46718), we finalized that facilities with between 609 and 3,056 cases that
  choose to participate in the global sample would be required to report data for 609 cases. Because facilities are only required to submit data on a
  number specified by the global sampling methodology, rather than abstracting data for all patients or applying measure specific sampling
  methodologies, we believe that the number of cases under the global sample is a good approximation of facility burden associated with these measures.
  Therefore, for the average IPF discharge rate of 1,346 discharges the global sample requires abstraction of 609 records.

    Additionally, we are applying our updated wage rate, case count, 
and facility counts to the remaining measure set and program 
requirements for data submission in CY 2024. See Table 28 and 29 for 
information on the effects of these updates. Specifically, we estimate 
that there are now approximately 1,596 facilities (a decrease of 38 
facilities) and an average of 1,261 cases per facility (a decrease of 
85 cases per facility). We also estimate a wage increase of $3.86/hour 
as described in section VI.A of this proposed rule. Our previous 
estimate shows that the two measures which do not allow sampling had 
1,346 cases per measure and the six remaining measures which do allow 
sampling require 609 cases per measure per facility. We have estimated 
that these measures would take 0.25 hours per case. The effects of the 
updated wage rate are depicted in Table 28.

                                                         Table 28--Effects of Updated Wage Rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                             Number of                                                    Change in cost
                                                                             estimated     Total number                    Total effort    per facility
                  Data collection type                       Number of       cases per     of cases per     Effort per     per facility     ($(effort *
                                                             measures       measure per      facility      case (hours)       (hours)     3.86/hour wage
                                                                             facility                                                         change)
--------------------------------------------------------------------------------------------------------------------------------------------------------
No-sampling measures....................................               2           1,346           2,692            0.25             673        2,597.78
Sampling measures.......................................               6             609           3,654            0.25           913.5        3,526.11
Non-Measure Data........................................               1               4               4             0.5               2            7.72
                                                         -----------------------------------------------------------------------------------------------
    Total Change per Facility...........................  ..............  ..............  ..............  ..............  ..............        6,131.61
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The remaining calculations will use the updated wage rate to 
calculate the effects of other updates.
    We have previously estimated 1,346 cases for measures which do not 
allow sampling. Based on more recent data, we are updating our estimate 
for measures that do not allow sampling to 1,261 cases per IPF (a 
change of +85 cases for each of these 2 measures). This is equivalent 
to 138,890 cases across the 1,634 IPFs (85 cases * 1,634 IPFs) in our 
previous estimate for each measure. We are not changing our estimated 
case counts for measures that allow sampling. We continue to assume an 
average of 0.25 hours of effort per case. Therefore, this change in 
cases reflects a total annual effort of 42.5 hours per facility (2 
measures * 85 cases per measure * 0.25 hours per case) at a cost of 
$1,906.55 (42.5 hours * $44.86/hour).
    As indicated above we estimate a reduction of 38 facilities based 
on updated numbers. Table 29 shows the effects of this reduction in 
facilities on the reporting burden associated with each measure type.

                                                      Table 29--Effects of Updated Facility Counts
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                         Change in     Change in annual
                                                   Number of                                                           annual effort      effort for
        Measure type             Number of      estimated cases      Cases per      Effort per case     Effort per     for removing       removing 38
                                 measures      (per measure per      facility                            facility      38 facilities      facilities
                                                   facility)                                                              (hours)          (dollars)
--------------------------------------------------------------------------------------------------------------------------------------------------------
No Sampling.................               2  1,261.............           2,522  0.25..............           630.5        (23,959)      (1,074,800.74)
Sampling....................               6  609...............           3,654  0.25..............           913.5        (34,713)      (1,557,225.18)

[[Page 21305]]

 
Non-Measure Data Collection.               1  4.................               4  0.5...............               2            (76)          (3,409.36)
                             ---------------------------------------------------------------------------------------------------------------------------
    Total...................               9  Varies............           6,180  Varies............           1,546        (58,748)      (2,635,435.28)
--------------------------------------------------------------------------------------------------------------------------------------------------------

    We note that at 6,180 cases per facility, removing 38 facilities 
from our estimate removes a total of 234,840 cases (6,180 cases per 
facility * 38 facilities).
    The total effects of changes for the CY 2024 calendar year on our 
burden estimates are summarized in Table 30.

                     Table 30--Total CY 2024 Facility Information Collection Burden Changes
----------------------------------------------------------------------------------------------------------------
                                                                   Total       Total annual    Total annual cost
                                                                 responses     time (hours)           ($)
----------------------------------------------------------------------------------------------------------------
Remove Two Measures.........................................     (1,990,212)       (497,553)        (20,339,673)
Update Wage Estimate........................................             N/A             N/A        8,253,147.06
Update Case Estimate........................................       (277,280)        (69,445)      (3,115,302.70)
Update Facility Estimate....................................       (234,840)        (58,748)      (2,635,435.28)
                                                             ---------------------------------------------------
    Total...................................................     (2,502,332)       (625,746)     (17,837,263.92)
----------------------------------------------------------------------------------------------------------------

(b) Proposed Updates Affecting Patient Survey Burden
    In section V.D.3 of this proposed rule, we propose to adopt the 
Screening for Social Drivers of Health measure beginning with a 
voluntary data submission in CY 2025 (reflecting care provided in CY 
2024). In this regard, IPFs would be able to collect data and report 
the measure via multiple methods. For additional information on these 
methods, we refer readers to section V.D.3.c of this proposed rule. We 
believe that most IPFs would likely collect data during the patient 
intake process. Because this measure reflects care provided in CY 2024, 
the burden for administering the screening to patients would occur 
during CY 2024.
    The Hospital IQR Program, which adopted the Screening for Social 
Drivers of Health measure, estimated the information collection burden 
associated with patients responding to the selected screening 
instrument would require two minutes per patient to complete the 
screening in the FY 2022 IPPS/LTCH PPS final rule (87 FR 49385 through 
49386) under OMB Control Number 0938-1022 (CMS-10210). The Hospital IQR 
Program also estimated that during the voluntary reporting period 
roughly 50 percent of hospitals would survey 50 percent of patients (87 
FR 49385 through 49386).
    We agree with these estimates and believe that a similar proportion 
of IPFs will participate in the voluntary reporting period. As 
described in section VI.A of this proposed rule, we estimate the cost 
of patients' time for completing surveys to be $20.71/hour. Using these 
estimates, we believe that during the voluntary reporting period the 
annual burden of surveying IPF patients would be 16,603.59 hours 
[(1,596 facilities x 50 percent of facilities) x (1,261 patients per 
facility x 50 percent of patients) x 0.033 hours/response] at a cost of 
$343,860.29 (16,603.59 hours x 20.71/hour). These estimates are 
summarized in Table 31.

                              Table 31--Total CY 2024 Patient Survey Burden Changes
----------------------------------------------------------------------------------------------------------------
                                                                                  Total annual     Total annual
                                                               Total responses    time (hours)       cost ($)
----------------------------------------------------------------------------------------------------------------
Screening for SDOH...........................................         503,139        16,603.59       343,860.29
----------------------------------------------------------------------------------------------------------------

(c) Proposals Affecting Burden Beginning with CY 2025
(1) Proposed Updates Affecting Facility Reporting Burden
    In section V.D.2. of this proposed rule, we propose to adopt the 
Facility Commitment to Health Equity measure beginning with the FY 2026 
payment determination. Data for this attestation measure would be 
submitted during CY 2025. Consistent with our burden estimate from the 
Hospital IQR Program, when we adopted the similar Hospital Commitment 
to Health Equity measure in the FY 2023 IPPS/LTCH PPS final rule, we 
estimate an average of 10 minutes per facility for a medical records 
and health information technician to collect and report this 
information (87 FR 49385). We recognize that some IPFs may take more 
than 10 minutes to collect this information, especially in the first 
year of reporting; however, we believe that many IPFs would require 
less than 10 minutes. In addition, we believe that many IPFs will be 
able to submit similar responses in future years. Using the estimate of 
10 minutes per IPF per year at $44.86/hour for a medical records and 
health information technician, we estimate that this policy would 
result in a total annual burden increase of 267 hours across all 
participating IPFs (0.167 hours x 1,596 IPFs) at a cost of $11,956.63 
(267 hours x $44.86/hour).

[[Page 21306]]

    In sections V.D.3 and V.D.4 of this proposed rule, we propose to 
adopt the Screening for Social Drivers of Health measure and the 
associated Screen Positive Rate for Social Drivers of Health measure 
beginning with a voluntary data submission in CY 2025 (reflecting care 
provided in CY 2024). We described our anticipated burden for 
administering the screening in the previous section because this burden 
would accrue during CY 2024. The burden associated with reporting each 
of these measures to CMS would occur during CY 2025. We anticipate that 
the burden for reporting the two measures would be consistent with the 
burden for other web-based submissions, such as the Facility Commitment 
to Health Equity measure described previously in this section and for 
similar measures adopted in the Ambulatory Surgical Center Quality 
Reporting (ASCQR) Program (OMB control number 0938-1270; CMS-10530), 
which we have estimated to have a reporting burden of 0.167 hours per 
IPF. We note that for the voluntary reporting year we have estimated 
only 50 percent of IPFs would report these data. Therefore, we estimate 
the burden associated with reporting of each of these measures to be 
133 hours (0.167 hr. x 798 IPFs) at a cost of $5,966 (133 hr. x $44.86/
hr. for a medical records and health information technician) for the 
voluntary reporting period. These estimates are summarized in Table 32.
    A summary of our estimated changes in information collection burden 
for CY 2025 is shown in Table 32.

                                         Table 32--Total CY 2025 Facility Information Collection Burden Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              Number         Estimated                       Time per       Annual time
      Measure/response description          respondents    responses per   Total annual      response      per facility    Total annual    Total annual
                                           (facilities)      facility        responses        (hours)         (hours)      time (hours)      cost  ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Facility Commitment to Health Equity....           1,596               1           1,596           0.167           0.167             267       11,956.63
Screening for Social Drivers of.........             798               1             798           0.167           0.167             133        5,966.38
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                         Health
--------------------------------------------------------------------------------------------------------------------------------------------------------
Screen Positive Rate for Social Drivers              798               1             798           0.167           0.167             133        5,966.38
 of Health..............................
                                         ---------------------------------------------------------------------------------------------------------------
    Totals..............................           1,596               3           3,192           0.167           0.167             533       23,889.39
--------------------------------------------------------------------------------------------------------------------------------------------------------

(2) Proposed Updates Affecting Patient Survey Burden
    Beginning with CY 2025, IPFs would need to screen 100 percent of 
their patients to prepare for required reporting of the Screening for 
SDOH measure in CY 2026 (for the FY 2027 payment determination). 
Therefore, we estimate that 100 percent of IPFs would screen 100 
percent of their patients. We recognize that this may be an 
overestimate as some IPFs may choose not to participate and some 
patients may opt out of screening or be unable to provide responses; 
however, we believe that the numbers of IPFs and patients opting out 
will be relatively small and therefore 100 percent will be a reasonable 
approximation.
    Using the facility counts, patient counts, and average hourly 
earnings described previously, we estimate the burden of surveying IPF 
patients for health-related social needs (HRSNs) under the Screening 
for Social Drivers of Health and Screen Positive Rate for Social 
Drivers of Health measures will be 66,414 hours (1,596 facilities x 
1,261 patients per facility x 0.033 hours) at a cost of $1,375,433.94 
(66,414 hours x $20.71/hour). We note that 16,603.59 hours and 
$343,960.29 of this burden was previously accounted for in our analysis 
of the burden of the voluntary reporting period. Therefore, the 
incremental burden of switching to required reporting is 49,810.41 
hours and $1,031,473.65.
    Additionally, in section V.D.5 of this proposed rule, we are 
proposing to adopt the Psychiatric Inpatient Experience (PIX) survey 
measure beginning with voluntary data submission in CY 2026. To prepare 
for data submission in 2026, IPFs would begin administering this survey 
in CY 2025. We believe 50 percent of IPFs would begin collecting these 
data for the voluntary data submission period. We note that we have 
proposed to allow IPFs with more than 300 eligible discharges to 
sample, which would require these facilities to survey 300 patients. 
Because the questions on the PIX survey are similar in content and 
response options to the questions on the Hospital Consumer Assessment 
of Healthcare Providers and Systems (HCAHPS) survey, we believe that it 
would take patients a similar amount of time to respond to these 
questions. In the Information Collection Request associated with OMB 
control number 0938-0981 (CMS-10102), we have estimated this time to be 
7.25 minutes.
    Therefore, we believe that the burden associated with conducting 
the PIX survey in CY 2025 would be 28,967.4 hours (50 percent of 1,596 
facilities x 300 patients/facility x 0.121 hours) at a cost of 
$599,914.85 (28,967.4hours x $20.71/hour).
    Our estimates for the CY 2025 total patient survey burden changes 
are summarized in Table 33.

                              Table 33--Total CY 2025 Patient Survey Burden Changes
----------------------------------------------------------------------------------------------------------------
                                                                       Total       Total annual    Total annual
                                                                     responses     time (hours)      cost  ($)
----------------------------------------------------------------------------------------------------------------
Screening for SDOH..............................................       1,509,417       49,810.41    1,031,473.65
PIX.............................................................         239,400        28,967.4      599,914.85
                                                                 -----------------------------------------------
    Totals......................................................       1,748,817       78,777.81     1,631,388.5
----------------------------------------------------------------------------------------------------------------


[[Page 21307]]

(d) Proposals Affecting Burden Beginning With CY 2026
(1) Proposed Updates Affecting Facility Reporting Burden
    Beginning with CY 2026 data submission (affecting the FY 2027 
payment determination), we estimate that 100 percent of IPFs would 
submit data on the Screening for Social Drivers of Health measure and 
Screen Positive Rate for Social Drivers of Health measure. Because we 
have already accounted for 50 percent of facilities submitting 
voluntary data on these measures, the incremental burden is the burden 
associated with the remaining 50 percent of facilities submitting data; 
that is, we estimate this burden to be 266 hours at a cost of 
$11,932.76. We also believe that 50 percent of facilities will submit 
data on the PIX measure for the voluntary reporting period in CY 2025. 
Because the data for this measure would require calculating an average 
of scores across a sample of patient surveys, we anticipate that the 
information collection and reporting burden for this measure would be 
approximately 15 minutes (0.25 hours) per patient for whom they are 
reporting data. The burden associated with reporting the Screening for 
Social Drivers of Health measure, the Screen Positive Rate for Social 
Drivers of Health measure, and the PIX survey measure to CMS is 
described in Table 34.

                                         Table 34--Total CY 2026 Facility Information Collection Burden Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              Number         Estimated                       Time per       Annual time
      Measure/response description          respondents    responses per   Total annual      response      per facility    Total annual    Total annual
                                           (facilities)      facility        responses        (hours)         (hours)      time (hours)      cost  ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Screening for Social Drivers of Health..             798               1             798           0.167           0.167             133        5,966.38
Screen Positive Rate for Social `Drivers             798               1             798           0.167           0.167             133        5,966.38
 of Health..............................
PIX Survey..............................             798             300         239,400            0.25              75          59,850    2,684,871.00
                                         ---------------------------------------------------------------------------------------------------------------
    Totals..............................             798             302         240,996          Varies           75.33          60,116    2,696,803.76
--------------------------------------------------------------------------------------------------------------------------------------------------------

(2) Proposed Updates Affecting Patient Survey Burden
    Because reporting the PIX measure would be required for FY 2028 
payment determination, the remaining 50 percent of facilities (those 
which did not participate in the voluntary reporting period) would 
begin surveying patients in CY 2026. To prepare for data submission of 
the PIX survey measure in CY 2027, IPFs that had not previously begun 
administering the PIX survey would begin administering this survey in 
CY 2026. The incremental burden of these 50 percent of facilities 
administering the survey would be equivalent to the burden associated 
with the 50 percent of facilities that participated in the voluntary 
reporting in CY 2025. These estimates are summarized in Table 35.

                              Table 35--Total CY 2026 Patient Survey Burden Changes
----------------------------------------------------------------------------------------------------------------
                                                                    Total         Total annual     Total annual
                                                                  responses      time  (hours)      cost  ($)
----------------------------------------------------------------------------------------------------------------
PIX..........................................................         239,400         28,967.4       599,914.85
----------------------------------------------------------------------------------------------------------------

(e.) Proposals Affecting Facility Reporting Burden Beginning With CY 
2027
    For data submission occurring in CY 2027, submission on the PIX 
survey measure would be required, therefore, we believe that an 
additional 50 percent of facilities would report the measure (that is, 
the 50 percent of facilities not previously accounted for under the 
voluntary reporting period). Therefore, we estimate that the 
incremental increase in burden for IPFs associated with this 
requirement would be reporting by the 50 percent of facilities that had 
not previously reported the PIX survey measure. This burden is depicted 
in Table 36.

                                         Table 36--Total CY 2027 Facility Information Collection Burden Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                        Number         Estimated                          Time per     Annual time per
   Measure/response description      respondents     responses per     Total annual       response         facility       Total annual     Total annual
                                     (facilities)       facility        responses         (hours)          (hours)       time  (hours)      cost  ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
PIX Survey.......................             798              300          239,400             0.25               75           59,850     2,684,871.00
--------------------------------------------------------------------------------------------------------------------------------------------------------

3. Overall Burden Summary
    Table 37 summarizes the incremental changes in burden for IPFs 
associated with proposed policies for data collection and submission in 
CYs 2024 through 2027 as well as updates to our estimated wage rate, 
facility counts, and case counts.

                            Table 37--Proposed Incremental Changes in Facility Burden
----------------------------------------------------------------------------------------------------------------
                                                                       Total       Total annual    Total annual
                                                                     responses     time  (hours)     cost  ($)
----------------------------------------------------------------------------------------------------------------
Changes Associated with CY 2024 Updates.........................     (2,502,332)       (625,746)    (17,837,264)

[[Page 21308]]

 
Changes Associated with CY 2025 Updates.........................           3,192             533          23,889
Changes Associated with CY 2026 Updates.........................         240,996          60,116       2,696,804
Changes Associated with CY 2027 Updates.........................         239,400          59,850       2,684,871
                                                                 -----------------------------------------------
    Total.......................................................     (2,018,744)       (505,247)    (12,431,700)
----------------------------------------------------------------------------------------------------------------

    Table 38 summarizes the incremental changes in burden for patients 
due to data collection associated with proposed policies for data 
collection and submission in CYs 2024 through CY 2026.

                      Table 38--Proposed Incremental Changes in Survey Burden for Patients
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Changes Associated with CY 2024 Updates.........................         503,139          16,604         343,860
Changes Associated with CY 2025 Updates.........................       1,748,817          78,778       1,631,339
Changes Associated with CY 2026 Updates.........................         239,400          28,967         599,915
                                                                 -----------------------------------------------
    Totals......................................................       2,491,356         124,349       2,575,114
----------------------------------------------------------------------------------------------------------------

C. Submission of PRA-Related Comments

    We have submitted a copy of this proposed rule's information 
collection requirements to OMB for their review. The requirements are 
not effective until they have been approved by OMB.
    To obtain copies of the supporting statement and any related forms 
for the proposed collections discussed above, please visit the CMS 
website at https://www.cms.gov/regulations-and-guidance/legislation/paperworkreductionactof1995/pra-listing, or call the Reports Clearance 
Office at 410-786-1326.
    We invite public comments on these potential information collection 
requirements. If you wish to comment, please submit your comments 
electronically as specified in the DATES and ADDRESSES sections of this 
proposed rule and identify the rule (CMS-1783-P), the ICR's CFR 
citation, and OMB control number.

VII. Response to Comments

    Because of the large number of public comments, we normally receive 
on Federal Register documents, we are not able to acknowledge or 
respond to them individually. We will consider all comments we receive 
by the date and time specified in the DATES section of this preamble, 
and, when we proceed with a subsequent document, we will respond to the 
comments in the preamble to that document.

VIII. Regulatory Impact Analysis

A. Statement of Need

    This rule proposes updates to the prospective payment rates for 
Medicare inpatient hospital services provided by IPFs for discharges 
occurring during FY 2024 (October 1, 2023 through September 30, 2024). 
We propose to apply the proposed 2021-based IPF market basket increase 
of 3.2 percent, less the productivity adjustment of 0.2 percentage 
point as required by 1886(s)(2)(A)(i) of the Act for a proposed total 
FY 2024 payment rate update of 3.0 percent. In this proposed rule, we 
propose to update the outlier fixed dollar loss threshold amount, 
update the IPF labor-related share, and update the IPF wage index to 
reflect the FY 2024 hospital inpatient wage index.

B. Overall Impact

    We have examined the impacts of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 13563 on Improving Regulation and Regulatory Review 
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 
1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, 
section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 
1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 
1999), and the Congressional Review Act (5 U.S.C. 804(2)).
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Section 
3(f) of Executive Order 12866 defines a ``significant regulatory 
action'' as an action that is likely to result in a rule: (1) having an 
annual effect on the economy of $100 million or more in any 1 year, or 
adversely and materially affecting a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or State, local or Tribal governments or communities; (2) 
creating a serious inconsistency or otherwise interfering with an 
action taken or planned by another agency; (3) materially altering the 
budgetary impacts of entitlement grants, user fees, or loan programs or 
the rights and obligations of recipients thereof; or (4) raising novel 
legal or policy issues arising out of legal mandates, the President's 
priorities, or the principles set forth in the Executive Order.
    A regulatory impact analysis (RIA) must be prepared for major rules 
with significant regulatory action/s and/or with significant effects as 
per section 3(f)(1) ($100 million or more in any 1 year). We estimate 
that the total impact of these changes for FY 2024 payments compared to 
FY 2023 payments will be a net increase of approximately $55 million. 
This reflects a $85 million increase from the update to the payment 
rates (+$90 million from the 4th quarter 2022 IGI forecast of the 
proposed 2021-based IPF market basket of 3.2 percent, and -$5 million 
for the productivity adjustment of 0.2 percentage point), as well as a 
$30 million decrease as a result of the update to the outlier threshold 
amount. Outlier payments are estimated to change from 3.0 percent in FY 
2023 to 2.0 percent of total estimated IPF payments in FY 2024.
    Based on our estimates, OMB's Office of Information and Regulatory 
Affairs has determined that this rulemaking is ``significant.'' '' per 
section 3(f)(1) as measured by the $100 million threshold

[[Page 21309]]

or more in any 1 year. Accordingly, we have prepared a Regulatory 
Impact Analysis that to the best of our ability presents the costs and 
benefits of the rulemaking. Therefore, OMB has reviewed these proposed 
regulations, and we have provided the following assessment of their 
impact.

C. Detailed Economic Analysis

    In this section, we discuss the historical background of the IPF 
PPS and the impact of this proposed rule on the Federal Medicare budget 
and on IPFs.
1. Budgetary Impact
    As discussed in the November 2004 and RY 2007 IPF PPS final rules, 
we applied a budget neutrality factor to the Federal per diem base rate 
and ECT payment per treatment to ensure that total estimated payments 
under the IPF PPS in the implementation period would equal the amount 
that would have been paid if the IPF PPS had not been implemented. This 
Budget neutrality factor included the following components: Outlier 
adjustment, stop loss adjustment, and the behavioral offset. As 
discussed in the RY 2009 IPF PPS notice (73 FR 25711), the stop-loss 
adjustment is no longer applicable under the IPF PPS.
    As discussed in section III.D.1 of this proposed rule, we propose 
to update the wage index and labor-related share in a budget neutral 
manner by applying a wage index budget neutrality factor to the Federal 
per diem base rate and ECT payment per treatment. Therefore, the 
budgetary impact to the Medicare program of this proposed rule would be 
due to the market basket update for FY 2024 of 3.2 percent (see section 
III.A.2 of this proposed rule) less the productivity adjustment of 0.2 
percentage point required by section 1886(s)(2)(A)(i) of the Act and 
the update to the outlier fixed dollar loss threshold amount.
    We estimate that the FY 2024 impact will be a net increase of $55 
million in payments to IPF providers. This reflects an estimated $85 
million increase from the update to the payment rates and a $30 million 
decrease due to the update to the outlier threshold amount to set total 
estimated outlier payments at 2.0 percent of total estimated payments 
in FY 2024. This estimate does not include the implementation of the 
required 2.0 percentage point reduction of the productivity-adjusted 
market basket update factor for any IPF that fails to meet the IPF 
quality reporting requirements (as discussed in section III.B.2. of 
this proposed rule).
2. Impact on Providers
    To show the impact on providers of the changes to the IPF PPS 
discussed in this proposed rule, we compare estimated payments under 
the proposed IPF PPS rates and factors for FY 2024 versus those under 
FY 2023. We determined the percent change in the estimated FY 2024 IPF 
PPS payments compared to the estimated FY 2023 IPF PPS payments for 
each category of IPFs. In addition, for each category of IPFs, we have 
included the estimated percent change in payments resulting from the 
proposed update to the outlier fixed dollar loss threshold amount; the 
updated wage index data including the proposed labor-related share; and 
the proposed market basket update for FY 2024, as reduced by the 
proposed productivity adjustment according to section 1886(s)(2)(A)(i) 
of the Act.
    To illustrate the impacts of the proposed FY 2024 changes in this 
proposed rule, our analysis begins with FY 2022 IPF PPS claims (based 
on the 2022 MedPAR claims, December 2022 update). We estimate FY 2024 
IPF PPS payments using these 2022 claims, the finalized FY 2023 IPF PPS 
Federal per diem base rates, and the finalized FY 2023 IPF PPS patient 
and facility level adjustment factors (as published in the FY 2023 IPF 
PPS final rule (87 FR 46846). We then estimate the FY 2024 outlier 
payments based on these simulated FY 2023 IPF PPS payments using the 
same methodology as the same methodology that we used to set the 
initial outlier threshold amount in the RY 2007 IPF PPS final rule (71 
FR 27072 and 27073), which is also the same methodology that we used to 
update the outlier threshold amounts for years 2008 through 2022, where 
total outlier payments are maintained at 2 percent of total estimated 
FY 2023 IPF PPS payments. We note that in the FY 2023 final rule (87 FR 
46862 through 46864) we excluded providers from our simulation of IPF 
PPS payments for FY 2022 and FY 2023 if their change in estimated 
average cost per day was outside 3 standard deviations from the mean. 
As discussed in section III.E.2 of this FY 2024 IPF PPS proposed rule, 
we are not proposing to apply this methodology for FY 2024.
    Each of the following changes is added incrementally to this 
baseline model in order for us to isolate the effects of each change:
     The proposed update to the outlier fixed dollar loss 
threshold amount.
     The proposed FY 2024 IPF wage index, and the proposed FY 
2024 labor-related share.
     The proposed market basket update for FY 2024 of 3.2 
percent less the proposed productivity adjustment of 0.2 percentage 
point in accordance with section 1886(s)(2)(A)(i) of the Act for a 
payment rate update of 3.0 percent.
    Our proposed column comparison in Table 39 illustrates the percent 
change in payments from FY 2023 (that is, October 1, 2022, to September 
30, 2023) to FY 2024 (that is, October 1, 2023, to September 30, 2024) 
including all the proposed payment policy changes.

                               Table 39--FY 2024 IPF PPS Proposed Payment Impacts
----------------------------------------------------------------------------------------------------------------
                                                                                    Wage index
                Facility by type                     Number of        Outlier     FY24, LRS, and   Total percent
                                                    facilities                        5% Cap         change\1\
(1)                                                          (2)             (3)             (4)             (5)
----------------------------------------------------------------------------------------------------------------
All Facilities..................................           1,481            -1.0             0.0             1.9
Total Urban.....................................           1,209            -1.1             0.1             2.0
    Urban unit..................................             695            -1.6             0.2             1.6
    Urban hospital..............................             514            -0.5             0.0             2.5
Total Rural.....................................             272            -0.6            -0.8             1.5
    Rural unit..................................             211            -0.6            -0.8             1.6
    Rural hospital..............................              61            -0.7            -0.9             1.3
----------------------------------------------------------------------------------------------------------------

[[Page 21310]]

 
                                              By Type of Ownership:
----------------------------------------------------------------------------------------------------------------
                                                Freestanding IPFs
----------------------------------------------------------------------------------------------------------------
Urban Psychiatric Hospitals
    Government..................................             117            -1.8             0.1             1.2
    Non-Profit..................................              98            -0.5             0.5             3.0
    For-Profit..................................             299            -0.3            -0.2             2.5
Rural Psychiatric Hospitals
    Government..................................              31            -1.3            -0.6             1.1
    Non-Profit..................................              13            -2.4            -0.2             0.3
    For-Profit..................................              17             0.0            -1.3             1.6
----------------------------------------------------------------------------------------------------------------
                                                    IPF Units
----------------------------------------------------------------------------------------------------------------
Urban
    Government..................................             100            -2.9             0.6             0.6
    Non-Profit..................................             455            -1.5             0.4             1.9
    For-Profit..................................             140            -0.7            -0.6             1.6
Rural
    Government..................................              51            -0.4            -0.7             1.9
    Non-Profit..................................             118            -0.7            -0.7             1.6
    For-Profit..................................              42            -0.4            -1.1             1.4
----------------------------------------------------------------------------------------------------------------
                                               By Teaching Status:
----------------------------------------------------------------------------------------------------------------
Non-teaching....................................           1,283            -0.8            -0.2             2.0
Less than 10% interns and residents to beds.....             101            -1.8             0.9             2.1
10% to 30% interns and residents to beds........              67            -2.4             0.4             1.0
More than 30% interns and residents to beds.....              30            -2.1             0.5             1.4
----------------------------------------------------------------------------------------------------------------
                                                   By Region:
----------------------------------------------------------------------------------------------------------------
New England.....................................             105            -1.4            -0.7             0.9
Mid-Atlantic....................................             204            -1.7             1.1             2.4
South Atlantic..................................             228            -0.6             0.1             2.5
East North Central..............................             243            -0.6            -0.3             2.1
East South Central..............................             149            -0.7            -0.8             1.4
West North Central..............................             105            -1.9            -0.3             0.7
West South Central..............................             215            -0.6            -0.1             2.3
Mountain........................................             106            -0.6            -0.9             1.4
Pacific.........................................             126            -1.3             0.4             2.1
----------------------------------------------------------------------------------------------------------------
                                                  By Bed Size:
----------------------------------------------------------------------------------------------------------------
Psychiatric Hospitals
    Beds: 0-24..................................              92            -0.8            -0.4             1.7
    Beds: 25-49.................................              84            -0.2            -0.8             2.1
    Beds: 50-75.................................              86            -0.1            -0.2             2.7
    Beds: 76+...................................             313            -0.6             0.1             2.5
Psychiatric Units
    Beds: 0-24..................................             487            -1.1            -0.3             1.6
    Beds: 25-49.................................             241            -1.2             0.3             2.1
    Beds: 50-75.................................             106            -1.8             0.0             1.1
    Beds: 76+...................................              72            -2.2             0.7             1.5
----------------------------------------------------------------------------------------------------------------
\1\ This column includes the impact of the updates in columns (3) through (4) above, and of the proposed IPF
  market basket update factor for FY 2024 (3.2 percent), reduced by 0.2 percentage point for the productivity
  adjustment as required by section 1886(s)(2)(A)(i) of the Act.

3. Impact Results
    Table 39 displays the results of our analysis. The table groups 
IPFs into the categories listed here based on characteristics provided 
in the Provider of Services file, the IPF PSF, and cost report data 
from the Healthcare Cost Report Information System:
     Facility Type.
     Location.
     Teaching Status Adjustment.
     Census Region.
     Size.
    The top row of the table shows the overall impact on the 1,481 IPFs 
included in the analysis. In column 2, we present the number of 
facilities of each type that had information available in the PSF, had 
claims in the MedPAR dataset for FY 2022.

[[Page 21311]]

    In column 3, we present the effects of the update to the outlier 
fixed dollar loss threshold amount. We estimate that IPF outlier 
payments as a percentage of total IPF payments are 3.0 percent in FY 
2023. Therefore, we propose to adjust the outlier threshold amount to 
set total estimated outlier payments equal to 2.0 percent of total 
payments in FY 2024. The estimated change in total IPF payments for FY 
2024, therefore, includes an approximate 1.0 percent decrease in 
payments because we would expect the outlier portion of total payments 
to decrease from approximately 3.0 percent to 2.0 percent.
    The overall impact of the estimated decrease to payments due to 
updating the outlier fixed dollar loss threshold (as shown in column 3 
of Table 3), across all hospital groups, is a 1.0 percent decrease. The 
largest decrease in payments due to this change is estimated to be 2.9 
percent for urban government unit IPFs.
    In column 4, we present the effects of the proposed budget-neutral 
update to the IPF wage index, the proposed Labor-Related Share (LRS), 
and the 5-percent cap on any decrease to a provider's wage index from 
its wage index in the prior year. This represents the effect of using 
the concurrent hospital wage data as discussed in section III.D.1.a of 
this proposed rule. That is, the impact represented in this column 
reflects the proposed update from the FY 2023 IPF wage index to the 
proposed FY 2024 IPF wage index, which includes basing the FY 2024 IPF 
wage index on the FY 2024 pre-floor, pre-reclassified IPPS hospital 
wage index data, applying a 5-percent cap on any decrease to a 
provider's wage index from its wage index in the prior year, and 
updating the LRS from 77.4 percent in FY 2023 to 78.5 percent in FY 
2024. We note that there is no projected change in aggregate payments 
to IPFs, as indicated in the first row of column 4; however, there 
would be distributional effects among different categories of IPFs. For 
example, we estimate the largest increase in payments to be 1.1 percent 
for Mid-Atlantic IPFs, and the largest decrease in payments to be 1.3 
percent for freestanding rural for-profit IPFs.
    Column 5 incorporates the proposed market basket update of 3.2 
percent reduced by 0.2 percentage point for the productivity adjustment 
as required by section 1886(s)(2)(A)(i) of the Act. This includes the 
proposal to rebase the IPF PPS market basket to reflect a 2021 base 
year.
    Overall, IPFs are estimated to experience a net increase in 
payments as a result of the updates in this proposed rule. IPF payments 
are estimated to increase by 2.0 percent in urban areas and 1.5 percent 
in rural areas. The largest payment increases are estimated at 3.0 
percent for freestanding urban non-profit IPFs.
4. Effect on Beneficiaries
    Under the FY 2024 IPF PPS, IPFs will continue to receive payment 
based on the average resources consumed by patients for each day. Our 
longstanding payment methodology reflects the differences in patient 
resource use and costs among IPFs, as required under section 124 of the 
BBRA. We expect that updating IPF PPS rates in this proposed rule will 
improve or maintain beneficiary access to high quality care by ensuring 
that payment rates reflect the best available data on the resources 
involved in inpatient psychiatric care and the costs of these 
resources. We continue to expect that paying prospectively for IPF 
services under the FY 2024 IPF PPS will enhance the efficiency of the 
Medicare program.
    As discussed in sections V.D.3 and V.D.4 of this proposed rule, we 
expect that additional proposed IPFQR Program measures will support 
improving care for patients with health-related social needs. We also 
believe that our proposed data validation pilot is an important step 
towards ensuring that the data beneficiaries and their caregivers 
access on Care Compare (or a successor CMS website) are accurate and 
reliable. Based on the input from patients and their caregivers 
regarding the importance of having a patient experience care measure 
for the IPF setting in which they note many benefits (including, but 
not limited to helping patients select facilities in which to receive 
care, providing patients an opportunity to be heard, and increasing 
alignment between general acute and acute psychiatric settings). We 
believe that our proposed PIX survey measure will have positive effects 
on patients and their caregivers. Therefore, we expect that the 
proposed updates to the IPFQR Program will improve quality for 
beneficiaries.
5. Effects of the Updates to the IPFQR Program
    In section V.D.3 of this proposed rule, we propose to adopt the 
Screening for Social Drivers of Health measure for the IPFQR Program 
beginning with voluntary reporting of CY 2024 data, and with required 
reporting of CY 2025 data for the FY 2027 payment determination. For 
IPFs that are not currently administering some screening mechanism and 
elect to begin doing so as a result of this policy, there will be some 
non-recurring costs associated with changes in workflow and information 
systems to collect the data. The extent of these costs is difficult to 
quantify as different facilities may utilize different modes of data 
collection (for example, paper-based, electronically patient-directed 
and clinician-facilitated). In addition, depending on the method of 
data collection utilized, the time required to complete the survey may 
add a negligible amount of time to patient visits.
    In section V.D.5 of this proposed rule, we are proposing to adopt 
the Psychiatric Inpatient Experience (PIX) survey measure. There may be 
some non-recurring costs associated with changes in workflow and 
information systems to administer this survey and collect the data. The 
extent of these costs is difficult to quantify as different facilities 
currently have different practices for surveying patients to gather 
information on their experiences of care.
    In addition, for the IPFQR Program, we propose to adopt the 
Facility Commitment to Health Equity measure and the Screen Positive 
for Social Drivers of Health measure, as well as to update the COVID-19 
Vaccination Coverage Among HCP measure. These updates would not impact 
providers workflows or information systems to collect or report the 
data, and because they represent processes of care or structural data 
that the IPFs would already have in place, we do not believe they would 
incur costs for providers beyond the recurring information collection 
costs (described in section VI.A of this proposed rule).
    Finally, we propose to remove two chart-abstracted measures from 
the IPFQR Program. We believe that the impact of removing the Tobacco 
Use Brief Intervention Provided or Offered and Tobacco Use Brief 
Intervention Provided (TOB-2/2a) measure would be minimal as we do not 
believe that IPFs would update their workflow to no longer provide 
brief tobacco cessation interventions to patients who use tobacco. 
However, we believe that there may be some simplification of workflows 
and clinical documentation associated with the removal of the Patients 
Discharged on Multiple Antipsychotic Medications with Appropriate 
Justification (HBIPS-5) measure because IPFs would no longer have to 
ensure the presence of appropriate documentation for the use of 
multiple antipsychotics. For more information on the updated clinical 
guidelines regarding polypharmacy for patients with schizophrenia, we 
refer

[[Page 21312]]

readers to section V.F.2.a of this proposed rule.
    As discussed in section III.B.2 of this proposed rule and in 
accordance with section 1886(s)(4)(A)(i) of the Act, we will apply a 2-
percentage point reduction to the FY 2024 market basket update for IPFs 
that have failed to comply with the IPFQR Program requirements for FY 
2024, including reporting on the required measures. In section III.B.2 
of this proposed rule, we discuss how the 2-percentage point reduction 
will be applied. For the FY 2023 payment determination, of the 1,596 
IPFs eligible for the IPFQR Program, 6 IPFs did not receive the full 
market basket update because of the IPFQR Program; 2 of these IPFs 
chose not to participate and 4 did not meet the requirements of the 
program. Thus, we estimate that the IPFQR Program will have a 
negligible impact on overall IPF payments for FY 2024.
    Based on the IPFQR Program proposals in this proposed rule, we 
estimate a total decrease in burden of 505,247 hours across all IPFs, 
resulting in a total decrease in information collection cost of 
$12,431,700 across all IPFs. Further information on these estimates can 
be found in section VI.A of this proposed rule.
    We intend to closely monitor the effects of the IPFQR Program on 
IPFs and help facilitate successful reporting outcomes through ongoing 
stakeholder education, national trainings, and a technical help desk.
6. Regulatory Review Costs
    If regulations impose administrative costs on private entities, 
such as the time needed to read and interpret this proposed rule, we 
should estimate the cost associated with regulatory review. Due to the 
uncertainty involved with accurately quantifying the number of entities 
that will be directly impacted and will review this proposed rule, we 
assume that the total number of unique commenters on the most recent 
IPF proposed rule will be the number of reviewers of this proposed 
rule. For this FY 2024 IPF PPS proposed rule, the most recent IPF 
proposed rule was the FY 2023 IPF PPS proposed rule, and we received 
396 unique comments on this proposed rule. We acknowledge that this 
assumption may understate or overstate the costs of reviewing this 
proposed rule. It is possible that not all commenters reviewed the FY 
2023 IPF proposed rule in detail, and it is also possible that some 
reviewers chose not to comment on that proposed rule. For these 
reasons, we thought that the number of commenters would be a fair 
estimate of the number of reviewers who are directly impacted by this 
proposed rule. We are soliciting comments on this assumption.
    We also recognize that different types of entities are in many 
cases affected by mutually exclusive sections of this proposed rule; 
therefore, for the purposes of our estimate, we assume that each 
reviewer reads approximately 50 percent of this proposed rule. Using 
the May, 2021 mean (average) wage information from the BLS for medical 
and health service managers (Code 11-9111), we estimate that the cost 
of reviewing this proposed rule is $115.22 per hour, including overhead 
and fringe benefits https://www.bls.gov/oes/current/oes119111.htm. 
Assuming an average reading speed of 250 words per minute, we estimate 
that it would take approximately 138 minutes (2.30 hours) for the staff 
to review half of this proposed rule (34,500), which contains a total 
of approximately 69,000 words. For each IPF that reviews the proposed 
rule, the estimated cost is (2.30 x $115.22) or $265.01. Therefore, we 
estimate that the total cost of reviewing this proposed rule is 
$104,943.96 ($265.01 x 396 reviewers).

D. Alternatives Considered

    The statute does not specify an update strategy for the IPF PPS and 
is broadly written to give the Secretary discretion in establishing an 
update methodology. We continue to believe it is appropriate to 
routinely update the IPF PPS so that it reflects the best available 
data about differences in patient resource use and costs among IPFs as 
required by the statute. Therefore, we propose to: Update the IPF PPS 
using the methodology published in the November 2004 IPF PPS final 
rule; apply the proposed 2021-based IPF PPS market basket update for FY 
2024 of 3.2 percent, reduced by the statutorily required proposed 
productivity adjustment of 0.2 percentage point along with the proposed 
wage index budget neutrality adjustment to update the payment rates; 
and use a FY 2024 IPF wage index which uses the FY 2024 pre-floor, pre-
reclassified IPPS hospital wage index as its basis.
    Lastly, we considered and are soliciting comments on alternative 
methodologies that could be appropriate for establishing the FY 2024 
outlier fixed dollar loss threshold.

E. Accounting Statement

    As required by OMB Circular A-4 (www.whitehous.gov/sites/whitehouse.gov/files/omb/circulars/A4/A-4/pdf), in Table 40, we have 
prepared an accounting statement showing the classification of the 
expenditures associated with the updates to the IPF wage index and 
payment rates in this proposed rule. Table 40 provides our best 
estimate of the increase in Medicare payments under the IPF PPS as a 
result of the changes presented in this proposed rule and is based on 
1,481 IPFs with data available in the PSF and with claims in our FY 
2022 MedPAR claims dataset. Lastly, Table 40 also includes our best 
estimate of the costs of reviewing and understanding this proposed 
rule.

                 Table 40--Accounting Statement: Classification of Estimated Costs and Transfers
----------------------------------------------------------------------------------------------------------------
                                              Primary                              Units
                                             estimate    -------------------------------------------------------
                Category                    ($million/
                                               year)             Year dollars               Period  covered
----------------------------------------------------------------------------------------------------------------
Regulatory Review Costs.................             .11  FY 2021...................  FY 2024.
Annualized Monetized Transfers from                   55  FY 2024...................  FY 2024.
 Federal Government to IPF Medicare
 Providers.
----------------------------------------------------------------------------------------------------------------

F. Regulatory Flexibility Act

    The RFA requires agencies to analyze options for regulatory relief 
of small entities if a rule has a significant impact on a substantial 
number of small entities. For purposes of the RFA, small entities 
include small businesses, nonprofit organizations, and small 
governmental jurisdictions. Most IPFs and most other providers and 
suppliers are small entities, either by nonprofit status or having 
revenues of $8 million to $41.5 million or less in any 1 year.

[[Page 21313]]

Individuals and states are not included in the definition of a small 
entity.
    Because we lack data on individual hospital receipts, we cannot 
determine the number of small proprietary IPFs or the proportion of 
IPFs' revenue derived from Medicare payments. Therefore, we assume that 
all IPFs are considered small entities.
    The Department of Health and Human Services generally uses a 
revenue impact of 3 to 5 percent as a significance threshold under the 
RFA. As shown in Table 39, we estimate that the overall revenue impact 
of this proposed rule on all IPFs is to increase estimated Medicare 
payments by approximately 1.9 percent. As a result, since the estimated 
impact of this proposed rule is a net increase in revenue across almost 
all categories of IPFs, the Secretary has determined that this proposed 
rule will have a positive revenue impact on a substantial number of 
small entities.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a rule may have a significant impact on 
the operations of a substantial number of small rural hospitals. This 
analysis must conform to the provisions of section 603 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside of a metropolitan 
statistical area and has fewer than 100 beds. As discussed in section 
VIII.C.2 of this proposed rule, the rates and policies set forth in 
this proposed rule will not have an adverse impact on the rural 
hospitals based on the data of the 211 rural excluded psychiatric units 
and 61 rural psychiatric hospitals in our database of 1,481 IPFs for 
which data were available. Therefore, the Secretary has determined that 
this proposed rule will not have a significant impact on the operations 
of a substantial number of small rural hospitals.

G. Unfunded Mandate Reform Act (UMRA)

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule whose mandates require spending in any 1 year of $100 
million in 1995 dollars, updated annually for inflation. In 2023, that 
threshold is approximately $177 million. This proposed rule does not 
mandate any requirements for State, local, or Tribal governments, or 
for the private sector. This proposed rule would not impose a mandate 
that will result in the expenditure by State, local, and Tribal 
governments, in the aggregate, or by the private sector, of more than 
$177 million in any 1 year.

H. Federalism

    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule that imposes 
substantial direct requirement costs on State and local governments, 
preempts State law, or otherwise has Federalism implications. This 
proposed rule does not impose substantial direct costs on State or 
local governments or preempt State law.
    Chiquita Brooks-LaSure, Administrator of the Centers for Medicare & 
Medicaid Services, approved this document on March 30, 2023.

List of Subjects in 42 CFR Part 412

    Administrative practice and procedure, Health facilities, Medicare, 
Puerto Rico, Reporting and recordkeeping requirements.
    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services proposes to amend 42 CFR part 412 as set forth 
below:

PART 412--PROSPECTIVE PAYMENT SYSTEMS PROSPECTIVE PAYMENT SYSTEMS 
FOR INPATIENT HOSPITAL SERVICES

0
1. The authority citation for part 412 continues to read as follows:

    Authority: 42 U.S.C. 1302 and 1395hh.

0
2. Section 412.25 is amended by revising paragraph (c)(2) to read as 
follows:


Sec.  412.25  Excluded hospital units: Common requirements.

* * * * *
    (c) * * *
    (2) The status of an IPF unit may be changed from not excluded to 
excluded or excluded to not excluded at any time during a cost 
reporting period, but only if the hospital notifies the fiscal 
intermediary and the CMS Regional Office in writing of the change at 
least 30 days before the date of the change, and maintains the 
information needed to accurately determine costs that are or are not 
attributable to the IPF unit. A change in the status of an IPF unit 
from not excluded to excluded or excluded to not excluded that is made 
during a cost reporting period must remain in effect for the rest of 
that cost reporting period.
* * * * *
0
3. Section 412.433 is added to read as follows:


Sec.  412.433  Procedural requirements under the IPFQR Program.

    (a) Statutory authority. Section 1886(s)(4) of the Act requires the 
Secretary to implement a quality reporting program for inpatient 
psychiatric hospitals and psychiatric units. Under section 1886(s)(4) 
of the act, for an IPF paid under the IPF PPS that fails to submit data 
required for the quality measures selected by the Secretary in a form 
and manner and at a time specified by the Secretary, we reduce the 
otherwise applicable annual update to the standard Federal rate by 2.0 
percentage points with respect to the applicable fiscal year.
    (b) Participation in the IPFQR Program. To participate in the IPFQR 
Program, an IPF (as defined under Sec.  412.402) that is paid under the 
IPF PPS must:
    (1) Register on the QualityNet website before beginning to report 
data;
    (2) Identify and register a QualityNet security official as part of 
the registration process under paragraph (b)(1) of this section; and
    (3) Submit a notice of participation (NOP).
    (c) Withdrawal from the IPFQR Program. An IPF may withdraw from the 
IPFQR Program by changing the NOP status in the secure portion of the 
QualityNet website. The IPF may withdraw at any time up to and 
including August 15 before the beginning of each respective payment 
determination year. A withdrawn IPF is subject to a reduced annual 
payment update as specified under paragraph (a) of this section and is 
required to renew participation as specified in paragraph (b) of this 
section in order to participate in any future year of the IPFQR 
Program.
    (d) Submission of IPFQR Program data. General rule. Except as 
provided in paragraph (f) of this section, IPFs that participate in the 
IPFQR Program must submit to CMS data on measures selected under 
section 1886(s)(4)(D) of the Act and specified non-measure data in a 
form and manner, and at a time specified by CMS.
    (e) Quality measure updates, retention, and removal. (1) CMS uses 
rulemaking to make substantive updates to the specifications of 
measures used in the IPFQR Program
    (2) General rule for the retention of Quality Measures. Quality 
measures adopted for the IPFQR Program measure set for a previous 
payment determination year are retained for use in subsequent payment 
determination years, except when they are removed, suspended, or 
modified as set forth in paragraph (3) of this section.

[[Page 21314]]

    (3) Measure removal, suspension, or modification through the 
rulemaking process. CMS will use the regular rulemaking process to 
remove, suspend, or modify quality measures in the IPFQR Program to 
allow for public comment.
    (i) Factors for consideration in removal or replacement of quality 
measures. CMS will weigh whether to remove or modify measures based on 
the following factors:
    (A) Factor 1: Measure performance among IPFs is so high and 
unvarying that meaningful distinctions and improvements in performance 
can no longer be made;
    (B) Factor 2: Measure does not align with current clinical 
guidelines or practice;
    (C) Factor 3: Measure can be replaced by a more broadly applicable 
measure (across settings or populations) or a measure that is more 
proximal in time to desired patient outcomes for the particular topic;
    (D) Factor 4: Measure performance or improvement does not result in 
better patient outcomes;
    (E) Factor 5: Measure can be replaced by a measure that is more 
strongly associated with desired patient outcomes for the particular 
topic;
    (F) Factor 6: Measure collection or public reporting leads to 
negative unintended consequences other than patient harm;
    (G) Factor 7: Measure is not feasible to implement as specified; 
and
    (H) Factor 8: The costs associated with a measure outweigh the 
benefit of its continued use in the program.
    (ii) Retention. CMS may retain a quality measure that meets one or 
more of the measure removal factors described in paragraph (i) of this 
subsection if the continued collection of data on the quality measure 
would align with other CMS and HHS policy goals, align with other CMS 
programs, or support efforts to move IPFs toward reporting electronic 
measures.
    (f) Extraordinary circumstances exception. CMS may grant an 
exception to one or more data submissions deadlines and requirements in 
the event of extraordinary circumstances beyond the control of the IPF, 
such as when an act of nature affects an entire region or locale or a 
systemic problem with one of CMS's data collection systems directly or 
indirectly affects data submission. CMS may grant an exception as 
follows:
    (1) Upon request by the IPF.
    (2) At the discretion of CMS. CMS may grant exceptions to IPFs that 
have not requested them when CMS determines that an extraordinary 
circumstance has occurred.
    (g) Public reporting of IPFQR Program data. Data that an IPF 
submits to CMS for the IPFQR Program will be made publicly available on 
a CMS website after providing the IPF an opportunity to review the data 
to be made public. IPFs will have a period of 30 days to review and 
submit corrections to errors resulting from CMS calculations prior to 
the data being made public.

    Dated: March 31, 2023.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2023-07122 Filed 4-4-23; 4:15 pm]
BILLING CODE 4120-01-P