CMS Releases Inpatient Proposals for FY2022; Includes AI Hospital Software as a New Tech Add-On

The evening of April 27, 2020, CMS released its proposed hospital rule changes for FY2022.

• See early coverage at RevCycle here.  AHA here.
• Reports 22 technologies applying for add-on payments; public comment requested.
• See p. 287ff.
• See discussion of "alternative new tech pathway," p.292ff.
• See mention of Council on Technology and Innovation p. 298ff.
• See recordings of the December New Tech applicants' meeting here.
• Proposal to extend New Tech payments, p. 305ff, related to "Covid year" only
• New Tech payments usually expire in a mechanical way in 2-3 years, depending on the product's date of FDA approval.
• CMS Considers New Tech "AI" Technology
• New applications begin with "AIDOC" artificial intelligence software for pulmonary embolism, p. 313ff.  CMS writes, "Briefcase for PE is the only FDA cleared technology that uses computer-aided triage and notification to rapidly detect PE and shorten time to notification of the radiologist."
• Recall that CMS discussed difficulties with RVU pricing of AI technologies in December 2020 (here).  CR12071 p. 11 here.   New Tech payments are based on real or expected invoices which raises less issues than RVU pricing.  See discussion of the CMS philosophy to handling software claims and payments, p. 316, which refers also back to a 2021 discussion (cited to: 85 FR 58628 in contact of CONTACT device 58625ff).  CMS has also puzzled over subscription-based costs (cited to: 85 FR 58630).  Applicant asserts clinical outcomes will improve because notification of PE drops from 64 to 4 minutes.   The discussion refers to a "golden hour" for reducing mortality and LOS (p. 321). Overall, by p. 326-8, CMS raises a number of questions about AI technology in this context, for public comment.
• Forbes discusses AI revolution in healthcare today, April 28, here.  Healthcare Dive discusses that AI devices are pre-eminent among recent FDA breakthrough designations here.  Fenn et al. discuss machine learning in ER and ICUs, here.
• Current add-on payments proposed for continuation for 14 technologies.
• Table, p. 304ff.
• CMS Fact Sheet here.
• CMS Press Release here.
• The Federal Register preview text (inspection text) is online at 1914 pages here.  
• Until I update it, the pagination in this blog reflects the Inspection Copy version (1914 pp).
• The published Federal Register version at 86 FR 25070-25642 appeared May 10 here (721 pp).
• Comments to June 28, 2021.

Transparency Walkback

CMS is proposing to pull back some of its notorious reporting of private negotiated contractual rates, it looks like mostly those involving Medicare Advantage negotiations.   See HealthCareDive here, with links therein to AHA etc.  

Although not including this week's CMS rule, see a very recent HealthLeadersMedia article on the transparency topic and its fallout, here.  Late healthcare economist Uwe Reinhardt famously discussed chaotic and disparate hospital pricing, in exactly today's terms, as long ago as 2006 (Health Affairs here.)

Nothing About SEP-1

Nothing about CMS's increasingly debate-ridden SEP-1 measure.  It's in place for FY2023 (p. 25583), FY2024 (p. 25584), FY2025 (p. 25586), FY2026 (p. 25587).  

In 2020, IDSA sharply criticized SEP-1 and called officially for changes.   Here, here.  

In April 2021,  negative paper by Barbash et al. with Op Ed by Klompas.  Here, here.  (For much additional literature see the bibliographies of these two items.)

In May 2021, see a guidance article by Yealy et al. and a fierce Op Ed by Harvard's Jeremey Faust (here, here).  

Faust notes the emerging body of negative publications about CMS SEP-1 may make it nearly impossible for NQF to re-affirm this measure when it comes up for review and vote this year.  He also notes that even Congress has weighed in on the SEP-1 issue and asked CMS to act (here, p. 144).

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DRG "Grade Inflation"

In other hospital news, OIG reported that hospitals are trending to higher severity levels in DRG reporting.  Hospitals have base DRG codes (for example, for pneumonia or a cholecystectomy) and payments can double or more for comorbidities reported by additional ICD10 codes.  February 26, 2021 article at RevCycle, here.  OIG here.

CMS disagreed with OIG's insinuations, possibly correctly.  Yes, DRGs payments may be doubled if one finds and adds one "major complication" code to the ICD10 list.  That's actually correct coding, on the part of the hospital, if the patient has that condition, and the payment windfall that follows is simply automated by the DRG programming system.