Regulatory and Industry News Alerts from Armanino

CMS Proposes Rule for CY 2022 to Increase Price Transparency, Health Equity, Rural Health Access

by Ron Present
September 02, 2021

The Centers for Medicare & Medicaid Services (CMS) is proposing a rule for calendar year 2022 to improve the health equity gap, price transparency for healthcare services and emergency care access for rural communities and apply lessons learned from the pandemic to inform patient care and quality measurements. The proposed rule includes the actions outlined below.

Price Transparency

In accordance with President Biden’s Competition Executive Order on July 9, CMS is further strengthening its efforts to increase price transparency, holding hospitals accountable and ensuring consumers have the information they need to make fully informed decisions regarding their health care.According to, just 5.6% of U.S. hospitals are fully compliant with the CMS price disclosure rule that became effective on January 1, 2001.

To strengthen compliance, CMS is proposing to set a minimum civil monetary penalty of $300/day that would apply to smaller hospitals with a bed count of 30 or fewer and apply a penalty of $10/bed/day for hospitals with a bed count greater than 30, not to exceed a maximum daily dollar amount of $5,500. Under this proposed approach, for a full calendar year of noncompliance, the minimum total penalty amount would be $109,500 per hospital, and the maximum total penalty amount would be $2,007,500 per hospital, according to a U.S. Department of Health & Human Services press release. CMS is accepting comments until September 19.

Implications: Compliant providers will need to ensure their technology and communication systems are able to present consistent pricing with easy access by consumers. Additionally, providers need to have a strong communication plan in place to explain the price points to consumers which will have to address quality metrics.

Health Equity

CMS is seeking input on ways to make reporting of health disparities based on social risk factors and race and ethnicity more comprehensive and actionable. This includes soliciting comments on potential collection of data, and analysis and reporting of quality measure results by a variety of demographic data points including, but not limited to, race, Medicare/Medicaid dual eligible status, disability status, sexual orientation, gender identity and socioeconomic status.

Implications: The need for easily accessible data entry points for consumers is critical, and the assurance the information is confidential has never been more important. Providers need to create a “trusted advisor” relationship with their consumers. Additionally, the ability to analyze the data and create actionable metrics driven by artificial intelligence and predictive modeling is equally important. Health equity is a key component of a provider’s environmental, social and governance (ESG) strategy and must be incorporated as part of messaging to the public.

Access to Rural Healthcare

Since 2010, 138 rural hospitals have closed, disproportionately within communities with a higher proportion of people of color and higher poverty rates. Rural communities experience shorter life expectancy and higher mortality and have fewer local providers, leading to poorer health outcomes than in other communities.

To address these concerns, Congress enacted Section 125 of the Consolidated Appropriations Act of 2021 (CAA), which establishes a new provider type for Rural Emergency Hospitals (REHs). REHs will be required to furnish emergency department services and observation care and may provide other outpatient medical and health services as specified by the Secretary through rulemaking. In this proposed rule, CMS is requesting information to inform the development of requirements that would apply to REHs, which would become effective January 1, 2023.

In further support of rural healthcare, the Biden administration announced on August 18 an investment of over $19 million to expand telehealth and improve health in rural communities. HHS Secretary Xavier Becerra signaled his support for ongoing advancement saying, “Telehealth is crucial to providing convenient and sustained care for patients, including in rural and underserved communities.”

The funding will be distributed to several rural health programs, including but not limited to:

  1. Building sustainable telehealth programs in rural and underserved communities
  2. Development of regional and national Telehealth Resource Centers (TRCs)
  3. Support of programs to assess the effectiveness of telehealth care for patients
  4. Assessing telehealth strategies and services to improve health care in rural medically underserved areas that have high chronic disease prevalence and high poverty rates

Implications: Having input and following the developments related to REH regulations is critical. To offer these expanded services, many providers will require capital investments, which will then require financial modeling and an ROI analysis for long-term sustainability supported by quality outcomes. Providers will also have to develop a telehealth strategy that includes an assessment of their ability to offer telehealth services and to monitor the success of the telehealth program. The strategy will need to include the options for connecting to regional and national support centers while gaining access to government funding.

Inpatient vs. Outpatient

As ambulatory surgical centers (ASCs) are becoming more abundant, the level of acuity has been increasing for procedures provided. However, the agency is proposing to halt the phased elimination of the inpatient-only (IPO) list — procedures that Medicare will only make payment for when provided in the inpatient setting. There are some services designated as inpatient only that, given their clinical intensity, would not be expected to be performed in the outpatient setting. CMS adopted a policy for 2021 to eliminate this list over a phased period and removed musculoskeletal procedures from the list in 2021.

CMS is proposing to reverse some approved ASC procedures in 2022 and is seeking comment on whether to maintain the longer-term objective of eliminating the IPO list, maintaining it or clawing back ASC services. CMS is also proposing to reinstate the patient safety criteria it uses to evaluate whether a procedure should be payable in the ASC setting that was removed in 2021.

Implications: The goal to improve outcomes while reducing cost is an integral part of the diminishment of the IPO list and allows for more clinically complex services in an ASC. Recent and future capital investments in ASCs need to be evaluated with an ROI calculation based upon several different acuity scenarios.

For questions or to learn more about how Armanino can support you in this area, contact our healthcare experts.

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