Notice2021-25051
Medicare Program; CY 2022 Inpatient Hospital Deductible and Hospital and Extended Care Services Coinsurance Amounts
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Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
November 17, 2021
Effective
January 1, 2022
Issuing agencies
Health and Human Services DepartmentCenters for Medicare & Medicaid Services
Abstract
This notice announces the inpatient hospital deductible and the hospital and extended care services coinsurance amounts for services furnished in calendar year (CY) 2022 under Medicare's Hospital Insurance Program (Medicare Part A). The Medicare statute specifies the formulae used to determine these amounts. For CY 2022, the inpatient hospital deductible will be $1,556. The daily coinsurance amounts for CY 2022 will be: $389 for the 61st through 90th day of hospitalization in a benefit period; $778 for lifetime reserve days; and $194.50 for the 21st through 100th day of extended care services in a skilled nursing facility in a benefit period.
Full Text
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<title>Federal Register, Volume 86 Issue 219 (Wednesday, November 17, 2021)</title>
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[Federal Register Volume 86, Number 219 (Wednesday, November 17, 2021)]
[Notices]
[Pages 64217-64221]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-25051]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
[CMS-8077-N]
RIN 0938-AU46
Medicare Program; CY 2022 Inpatient Hospital Deductible and
Hospital and Extended Care Services Coinsurance Amounts
AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of
Health and Human Services (HHS).
ACTION: Notice.
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SUMMARY: This notice announces the inpatient hospital deductible and
the hospital and extended care services coinsurance amounts for
services furnished in calendar year (CY) 2022 under Medicare's Hospital
Insurance Program (Medicare Part A). The Medicare statute specifies the
formulae used to determine these amounts. For CY 2022, the inpatient
hospital deductible will be $1,556. The daily coinsurance amounts for
CY 2022 will be: $389 for the 61st through 90th day of hospitalization
in a benefit period; $778 for lifetime reserve days; and $194.50 for
the 21st through 100th day of extended care services in a skilled
nursing facility in a benefit period.
DATES: The deductible and coinsurance amounts announced in this notice
are effective on January 1, 2022.
FOR FURTHER INFORMATION CONTACT: Yaminee Thaker, (410) 786-7921 for
general information and case mix analysis.
SUPPLEMENTARY INFORMATION:
I. Background
Section 1813 of the Social Security Act (the Act) provides for an
inpatient hospital deductible to be subtracted from the amount payable
by Medicare for inpatient hospital services furnished to a beneficiary.
It also provides for certain coinsurance amounts to be subtracted from
the amounts payable by Medicare for inpatient hospital and extended
care services. Section 1813(b)(2) of the Act requires the Secretary of
the Department of Health and Human Services (the Secretary) to
determine and publish each year the
[[Page 64218]]
amount of the inpatient hospital deductible and the hospital and
extended care services coinsurance amounts applicable for services
furnished in the following calendar year (CY).
II. Computing the Inpatient Hospital Deductible for CY 2022
Section 1813(b) of the Act prescribes the method for computing the
amount of the inpatient hospital deductible. The inpatient hospital
deductible is an amount equal to the inpatient hospital deductible for
the preceding CY, adjusted by our best estimate of the payment-weighted
average of the applicable percentage increases (as defined in section
1886(b)(3)(B) of the Act) used for updating the payment rates to
hospitals for discharges in the fiscal year (FY) that begins on October
1 of the same preceding CY, and adjusted to reflect changes in real
case-mix. The adjustment to reflect real case-mix is determined on the
basis of the most recent case-mix data available. The amount determined
under this formula is rounded to the nearest multiple of $4 (or, if
midway between two multiples of $4, to the next higher multiple of $4).
Under section 1886(b)(3)(B)(i)(XX) of the Act, the percentage
increase used to update the payment rates for FY 2022 for hospitals
paid under the inpatient prospective payment system is the market
basket percentage increase, otherwise known as the market basket
update, reduced by an adjustment based on changes in the economy-wide
productivity (the multifactor productivity (MFP) adjustment) (see
section 1886(b)(3)(B)(xi)(II) of the Act). Under section
1886(b)(3)(B)(viii) of the Act, for FY 2022, the applicable percentage
increase for hospitals that do not submit quality data as specified by
the Secretary is reduced by one quarter of the market basket update. We
are estimating that after accounting for those hospitals receiving the
lower market basket update in the payment-weighted average update, the
calculated deductible will not be affected, since the majority of
hospitals submit quality data and receive the full market basket
update. Section 1886(b)(3)(B)(ix) of the Act requires that any hospital
that is not a meaningful electronic health record (EHR) user (as
defined in section 1886(n)(3) of the Act) will have three-quarters of
the market basket update reduced by 100 percent for FY 2017 and each
subsequent FY. We are estimating that after accounting for these
hospitals receiving the lower market basket update, the calculated
deductible will not be affected, since the majority of hospitals are
meaningful EHR users and are expected to receive the full market basket
update.
Under section 1886 of the Act, the percentage increase used to
update the payment rates (or target amounts, as applicable) for FY 2022
for hospitals excluded from the inpatient prospective payment system is
as follows:
<bullet> The percentage increase for long term care hospitals is
the market basket percentage increase reduced by the MFP adjustment
(see section 1886(m)(3)(A) of the Act). In addition, these hospitals
may also be impacted by the quality reporting adjustments and the site-
neutral payment rates (see sections 1886(m)(5) and 1886(m)(6) of the
Act).
<bullet> The percentage increase for inpatient rehabilitation
facilities is the market basket percentage increase reduced by a
productivity adjustment in accordance with section 1886(j)(3)(C)(ii)(I)
of the Act. In addition, these hospitals may also be impacted by the
quality reporting adjustments (see section 1886(j)(7) of the Act).
<bullet> The percentage increase used to update the payment rate
for inpatient psychiatric facilities is the market basket percentage
increase reduced by the MFP adjustment (see section 1886(s)(2)(A)(i) of
the Act). In addition, these hospitals may also be impacted by the
quality reporting adjustments (see section 1886(s)(4) of the Act).
<bullet> The percentage increase used to update the target amounts
for other types of hospitals that are excluded from the inpatient
prospective payment system and that are paid on a reasonable cost
basis, subject to a rate-of-increase ceiling, is the inpatient
prospective payment system operating market basket percentage increase,
which is described at section 1886(b)(3)(B)(ii)(VIII) of the Act and 42
CFR 413.40(c)(3). These other types of hospitals include cancer
hospitals, children's hospitals, extended neoplastic disease care
hospitals, and hospitals located outside the 50 states, the District of
Columbia, and Puerto Rico.
The inpatient prospective payment system market basket percentage
increase for FY 2022 is 2.7 percent and the MFP adjustment is 0.7
percentage point, as announced in the final rule that appeared in the
Federal Register on August 13, 2021, entitled, ``Hospital Inpatient
Prospective Payment Systems for Acute Care Hospitals and the Long-Term
Care Hospital Prospective Payment System and Policy Changes and Fiscal
Year 2022 Rates; Quality Programs and Medicare Promoting
Interoperability Programs Requirements for Eligible Hospitals and
Critical Access Hospitals; Changes to Medicaid Provider Enrollment; and
Changes to the Medicare Shared Savings Programs'' (86 FR 45613).
Therefore, the percentage increase for hospitals paid under the
inpatient prospective payment system that submit quality data and are
meaningful EHR users is 2.0 percent (that is, the FY 2022 market basket
update of 2.7 percent less the MFP adjustment of 0.7 percentage point).
The average payment percentage increase for hospitals excluded from the
inpatient prospective payment system is 2.07 percent. This average
includes long term care hospitals, inpatient rehabilitation facilities,
and other hospitals excluded from the inpatient prospective payment
system. Weighting these percentages in accordance with payment volume,
our best estimate of the payment-weighted average of the increases in
the payment rates for FY 2022 is 2.01 percent.
To develop the adjustment to reflect changes in real case-mix, we
first calculated an average case-mix for each hospital that reflects
the relative costliness of that hospital's mix of cases compared to
those of other hospitals. We then computed the change in average case-
mix for hospitals paid under the Medicare inpatient prospective payment
system in FY 2021 compared to FY 2020. (We excluded from this
calculation hospitals whose payments are not based on the inpatient
prospective payment system because their payments are based on
alternate prospective payment systems or reasonable costs.) We used
Medicare bills from prospective payment hospitals that we received as
of August 2021. These bills represent a total of about 6.4 million
Medicare discharges for FY 2021 and provide the most recent case-mix
data available at this time. Based on these bills, the change in
average case-mix in FY 2021 is 2.9 percent. Based on these bills and
past experience, we expect the overall case mix change to be 2.9
percent as the year progresses and more FY 2021 data become available.
Section 1813 of the Act requires that the inpatient hospital
deductible be adjusted only by that portion of the case mix change that
is determined to be real. Real case-mix is that portion of case-mix
that is due to changes in the mix of cases in the hospital and not due
to coding optimization. COVID-19 has complicated the determination of
real case-mix increase. COVID 19 cases typically have higher-weighted
MS DRGs which would cause a real increase in case-mix while hospitals
have experienced a reduction in lower-weighted cases which would also
cause a real increase in case-mix. In addition, care that was deferred
in 2020 could be
[[Page 64219]]
more costly in 2021 causing an increase in real case-mix. Due to the
uncertainty we are assuming that all of the recently observed care is
not due to coding optimization and hence all of the 2.9 percent is
real.
Thus, the estimate of the payment-weighted average of the
applicable percentage increases used for updating the payment rates is
2.01 percent, and the real case-mix adjustment factor for the
deductible is 2.9 percent. Therefore, using the statutory formula as
stated in section 1813(b) of the Act, we calculate the inpatient
hospital deductible for services furnished in CY 2022 to be $1,556.
This deductible amount is determined by multiplying $1,484 (the
inpatient hospital deductible for CY 2021 (85 FR 71916)) by the
payment-weighted average increase in the payment rates of 1.0201
multiplied by the increase in real case-mix of 1.029, which equals
$1,558 and is rounded to $1,556.
III. Computing the Inpatient Hospital and Extended Care Services
Coinsurance Amounts for CY 2022
The coinsurance amounts provided for in section 1813 of the Act are
defined as fixed percentages of the inpatient hospital deductible for
services furnished in the same CY. The increase in the deductible
generates increases in the coinsurance amounts. For inpatient hospital
and extended care services furnished in CY 2022, in accordance with the
fixed percentages defined in the law, the daily coinsurance for the
61st through 90th day of hospitalization in a benefit period will be
$389 (one-fourth of the inpatient hospital deductible as stated in
section 1813(a)(1)(A) of the Act); the daily coinsurance for lifetime
reserve days will be $778 (one-half of the inpatient hospital
deductible as stated in section 1813(a)(1)(B) of the Act); and the
daily coinsurance for the 21st through 100th day of extended care
services in a skilled nursing facility (SNF) in a benefit period will
be $194.50 (one-eighth of the inpatient hospital deductible as stated
in section 1813(a)(3) of the Act).
IV. Cost to Medicare Beneficiaries
Table 1 summarizes the deductible and coinsurance amounts for CYs
2021 and 2022, as well as the number of each that is estimated to be
paid.
Table 1--Medicare Part A Deductible and Coinsurance Amounts for CYs 2021 and 2022
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Value Number paid (in millions)
Type of cost sharing ---------------------------------------------------------------
2021 2022 2021 2022
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Inpatient hospital deductible................... $1,484 $1,556 6.11 6.43
Daily coinsurance for 61st-90th day............. 371 389 1.37 1.44
Daily coinsurance for lifetime reserve days..... 742 778 0.69 0.72
SNF coinsurance................................. 185.50 194.50 29.69 28.63
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The estimated total increase in costs to beneficiaries is about
$1,100 million (rounded to the nearest $10 million) due to: (1) The
increase in the deductible and coinsurance amounts; and (2) the
increase in the number of deductibles and daily coinsurance amounts
paid. We determine the increase in cost to beneficiaries by calculating
the difference between the 2021 and 2022 deductible and coinsurance
amounts multiplied by the estimated increase in the number of
deductible and coinsurance amounts paid.
V. Waiver of Proposed Rulemaking
We ordinarily publish a notice of proposed rulemaking in the
Federal Register and invite public comment prior to a rule taking
effect in accordance with section 1871 of the Act and section 553(b) of
the Administrative Procedure Act (APA). Section 1871(a)(2) of the Act
provides that no rule, requirement, or other statement of policy (other
than a national coverage determination) that establishes or changes a
substantive legal standard governing the scope of benefits, the payment
for services, or the eligibility of individuals, entities, or
organizations to furnish or receive services or benefits under Medicare
shall take effect unless it is promulgated through notice and comment
rulemaking. Unless there is a statutory exception, section 1871(b)(1)
of the Act generally requires the Secretary to provide for notice of a
proposed rule in the Federal Register and provide a period of not less
than 60 days for public comment before establishing or changing a
substantive legal standard regarding the matters enumerated by the
statute. Similarly, under 5 U.S.C. 553(b) of the APA, the agency is
required to publish a notice of proposed rulemaking in the Federal
Register before a substantive rule takes effect. Section 553(d) of the
APA and section 1871(e)(1)(B)(i) of the Act usually require a 30-day
delay in effective date after issuance or publication of a rule,
subject to exceptions. Sections 553(b)(B) and 553(d)(3) of the APA
provide for exceptions from the advance notice and comment requirement
and the delay in effective date requirements. Sections 1871(b)(2)(C)
and 1871(e)(1)(B)(ii) of the Act also provide exceptions from the
notice and 60-day comment period and the 30-day delay in effective
date. Section 553(b)(B) of the APA and section 1871(b)(2)(C) of the Act
expressly authorize an agency to dispense with notice and comment
rulemaking for good cause if the agency makes a finding that notice and
comment procedures are impracticable, unnecessary, or contrary to the
public interest.
The annual inpatient hospital deductible and the hospital and
extended care services coinsurance amounts announcement set forth in
this notice does not establish or change a substantive legal standard
regarding the matters enumerated by the statute or constitute a
substantive rule which would be subject to the notice requirements in
section 553(b) of the APA. However, to the extent that an opportunity
for public notice and comment could be construed as required for this
notice, we find good cause to waive this requirement.
Section 1813(b)(2) of the Act requires publication of the inpatient
hospital deductible and the hospital and extended care services
coinsurance amounts between September 1 and September 15 of the year
preceding the year to which they will apply. Further, the statute
requires that the agency determine and publish the inpatient hospital
deductible and hospital and extended care services coinsurance amounts
for each CY in accordance with the statutory formulae, and we are
simply notifying the public of the changes to the deductible and
coinsurance amounts for CY 2022. We have calculated the inpatient
hospital deductible and hospital and extended
[[Page 64220]]
care services coinsurance amounts as directed by the statute; the
statute establishes both when the deductible and coinsurance amounts
must be published and the information that the Secretary must factor
into the deductible and coinsurance amounts, so we do not have any
discretion in that regard. We find notice and comment procedures to be
unnecessary for this notice and we find good cause to waive such
procedures under section 553(b)(B) of the APA and section 1871(b)(2)(C)
of the Act, if such procedures may be construed to be required at all.
Through this notice, we are simply notifying the public of the updates
to the inpatient hospital deductible and the hospital and extended care
services coinsurance amounts, in accordance with the statute, for CY
2022. As such, we also note that even if notice and comment procedures
were required for this notice, for the reasons stated above, we would
find good cause to waive the delay in effective date of the notice, as
additional delay would be contrary to the public interest under section
1871(e)(1)(B)(ii) of the Act. Publication of this notice is consistent
with section 1813(b)(2) of the Act, and we believe that any potential
delay in the effective date of the notice, if such delay were required
at all, could cause unnecessary confusion both for the agency and
Medicare beneficiaries.
VI. Collection of Information Requirements
This document does not impose information collection requirements,
that is, reporting, recordkeeping or third-party disclosure
requirements. Consequently, there is no need for review by the Office
of Management and Budget (OMB) under the authority of the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501 et seq.).
VII. Regulatory Impact Analysis
Although this notice does not constitute a substantive rule, we
nevertheless prepared this Regulatory Impact Analysis section in the
interest of ensuring that the impacts of this notice are fully
understood.
A. Statement of Need
This notice announces the Medicare Part A inpatient hospital
deductible and associated coinsurance amounts for hospital and extended
care services applicable for care provided in CY 2022, as required by
section 1813 of the Act. It also responds to section 1813(b)(2) of the
Act, which requires the Secretary to provide for publication of these
amounts in the Federal Register between September 1 and September 15 of
the year preceding the year to which they will apply. As this statutory
provision prescribes a detailed methodology for calculating these
amounts, we do not have the discretion to adopt an alternative approach
on these issues.
B. Overall Impact
We have examined the impacts of this notice 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 (also
referred to as ``economically significant''); (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 economically significant effects ($100 million or more in any 1
year). Although we do not consider this notice to constitute a
substantive rule, based on our estimates, OMB's Office of Information
and Regulatory Affairs has determined this rulemaking is ``economically
significant'' as measured by the $100 million threshold, and hence also
a major rule under Subtitle E of the Small Business Regulatory
Enforcement Fairness Act of 1996 (also known as the Congressional
Review Act). As stated in section IV of this notice, we estimate that
the total increase in costs to beneficiaries associated with this
notice is about $1,100 million due to: (1) The increase in the
deductible and coinsurance amounts; and (2) the increase in the number
of deductibles and daily coinsurance amounts paid.
C. Accounting Statement and Table
As required by OMB Circular A-4 (available at <a href="http://www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A4/a-4.pdf">www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A4/a-4.pdf</a>), in Table 2, we
have prepared an accounting statement showing the estimated total
increase in costs to beneficiaries of about $1,100 million, which is
due to the increase in the deductible and coinsurance amounts, and the
increase in the number of deductibles and daily coinsurance amounts
paid. As stated in section IV of this notice, we determined the
increase in cost to beneficiaries by calculating the difference between
the 2021 and 2022 deductible and coinsurance amounts multiplied by the
estimated increase in the number of deductible and coinsurance amounts
paid.
Table 2--Estimated Transfers for CY 2022 Deductible and Coinsurance
Amounts
------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers............ $1,100 million.
From Whom to Whom......................... Beneficiaries to Providers.
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D. 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 hospitals and most other health care
providers and suppliers are small entities, either by being nonprofit
organizations or by meeting the Small Business Administration's
definition of a small business (having revenues of less than $8.0
million to $41.5 million in any 1 year). Individuals and states are not
included in the definition of a small entity. This annual notice
announces the Medicare Part A deductible and coinsurance amounts for CY
2022 and will have an impact on the Medicare beneficiaries. As a
result, we are not preparing an analysis for the RFA because the
Secretary has certified that
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this notice will not have a significant economic 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 604 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. This annual notice
announces the Medicare Part A deductible and coinsurance amounts for CY
2022 and will have an impact on the Medicare beneficiaries. As a
result, we are not preparing an analysis for section 1102(b) of the Act
because the Secretary has certified that this notice will not have a
significant impact on the operations of a substantial number of small
rural hospitals.
E. Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates Reform Act of 1995 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 2021, that
threshold is approximately $158 million. This notice does not impose
mandates that will have a consequential effect of $158 million or more
on state, local, or tribal governments or on the private sector.
F. Federalism
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on state
and local governments, preempts state law, or otherwise has Federalism
implications. This notice will not have a substantial direct effect on
state or local governments, preempt state law, or otherwise have
federalism implications.
G. Congressional Review
This final action is subject to the Congressional Review Act
provisions of the Small Business Regulatory Enforcement Fairness Act of
1996 (5 U.S.C. 801 et seq.) and has been transmitted to the Congress
and the Comptroller General for review.
Chiquita Brooks-LaSure, Administrator of the Centers for Medicare &
Medicaid Services, approved this document on November 10, 2021.
Dated: November 12, 2021.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2021-25051 Filed 11-12-21; 5:00 pm]
BILLING CODE 4120-01-P
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