Spring always brings hope eternal for baseball fans’ favorite cellar dwelling team. For healthcare reimbursement, spring is the start of the Centers for Medicare and Medicaid Services (CMS) annual rule making process. During the next 30 days, CMS will publish a handful of annual rules that impact reimbursement rates in the near and long term. These federal healthcare policy initiatives will impact healthcare provider finances for future years, or at least until the next Presidential election.

CMS Annual Rule Making Process

Under the Administrative Procedures Act (APA), the Centers for Medicare and Medicaid Services (CMS) publishes updates in the Federal Register to various Medicare program reimbursement regulations. Typically, the updates include:

• A reimbursement rate increase to account for inflation,
• Updates to various quality reporting requirements,
• Implementation of new regulations required due to passage of Acts of Congress signed into law by the President of the United States,
• Adoption of new payment policies and,
• Occasionally revisions and changes to previous payment policies.

In all cases, CMS explains in detail the basis for adoption of the new regulations and methodology.

Under the APA, the regulations must be published as proposed regulations, followed by a 90-day comment period and then publication as final adopted regulations. CMS is required to respond to all timely-submitted commentary. By requiring a commentary period, Congress ensured that CMS and other Federal Agencies take into consideration public thoughts, concerns, and recommendations for more equitable and fair regulations. Often times, CMS does revise the proposed regulations and/or policies due persuasive comments submitted by healthcare providers, trade associations and other interested parties.

CMS Rule Making Publication Dates

Each rule is applicable to the specific reimbursement system the provider type is applicable too. CMS will publish proposed rules for inpatient providers and hospice providers and then final rules are published by May 1 and August 1 of each year. Proposed and then final rules applicable to outpatient type services are published by CMS by July 1 and November 1 of each year. Likewise, annual rules pertaining to physicians, non-physician practitioners and multiple other provider types subject to the Medicare physician fee schedules are published by July 1 and November 1 of each year. The chart below summarizes the major reimbursement rules published annually by CMS.

Usually, CMS is very timely and often publishes the rules via the CMS website two to three weeks prior to these deadlines. On occasion, they are tardy.

At a minimum, annual reimbursement rate increases are announced in each rule published by CMS. In some cases, depending upon Acts of Congress signed into law, policy revisions driven by a newly elected President or litigation, each rule can be extensive and have a direct impact on provider reimbursement amounts and broad ranging implications for provider patient care delivery and service delivery. Likewise, many states’ Medicaid plans, Medicare Advantage Plans and private insurance carriers piggyback on Medicare program reimbursement rates and payment policies.

CMS has already published the proposed rules for inpatient rehabilitation and psychiatric hospitals and units and the proposed rule for hospice providers. Future blogs will discuss the proposed rules, and then final rules, as published, and in some cases, in advance of expected publication dates.

For additional information, I encourage you to read part two of my blog, CMS: IPPS Proposed Rule: To Do List for Hospitals, and to join one of my educational webinars offered through Ovation Healthcare Learning Institute.