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CMS Releases Second IPPS Final Rule with Comment Period

A recently filed second final rule for the fiscal year 2022 Medicare Hospital Inpatient Prospective Payment System (IPPS) finalizes proposals on direct and indirect graduate medical education (GME) policies and solicits comments on other GME issues to inform future policymaking.

Of note to essential hospitals, the Centers for Medicare & Medicaid Services (CMS) finalized provisions that:

  • establish policies to distribute 1,000 new Medicare-funded physician residency slots to qualifying hospitals;
  • implement the Promoting Rural Hospital GME Funding Opportunity, which allows rural teaching hospitals participating in an accredited rural training track (RTT) to receive increases to their full-time employee (FTE) caps; and
  • implement policies related to Medicare GME treatment of hospitals establishing new medical residency training programs after hosting medical resident rotators for short durations in the past.

Further, CMS announced it will not move forward with proposed revisions to the regulatory treatment of Medicaid Section 1115 waiver days for the purposes of Medicare DSH adjustments. CMS also did not finalize organ acquisition payment policy proposals.

In addition to its finalized policies, CMS requested comments on:

  • how to account for health care provided outside a Health Professional Shortage Area (HPSA) to HPSA residents and feasible alternatives to HPSA scores as a proxy for health disparities in the prioritization of additional full-time equivalent (FTE) cap slots; and
  • the review process to determine eligibility for per-resident amount (PRA) or FTE cap resets in situations where a hospital disagrees with the information on cost reports that are no longer within the three-year reopening period.

America’s Essential Hospitals will provide more details in an Action Update in the new year. Visit the America’s Essential Hospitals coronavirus resource page for more information about the pandemic.

Contact Senior Director of Policy Erin O’Malley at or 202.585.0127 with questions.


About the Author

Abigail Painchaud is a policy associate at America's Essential Hospitals.

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