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CMS Positions Health Equity as a Key Priority for Hospital Leaders in 2023 Proposed Rules

Updated: Sep 26, 2023

"Health equity will be embedded within the DNA of CMS and serve as the lens through which we view all of our work.” – CMS Administrator Chiquita Brooks-LaSure


In the first sentence of its press release announcing the Fiscal Year 2023 Hospital Inpatient Prospective Payment System (IPPS) and Long Term Care Hospitals (LTCH PPS) Proposed Rule, the Centers for Medicare and Medicaid Services stated: “Today, [CMS] issued a proposed rule for inpatient and long-term hospitals that builds on the Biden-Harris Administration’s key priorities to advance health equity and improve maternal health outcomes” [Emphasis added]. As we noted previously, the prioritizing and advancement of health equity were goals we expected to diffuse to the larger healthcare industry, with material dollars attached to value-based care initiatives targeting these goals. Key to improving equity is a focus on measurement and implementation of data related to social risk, also known as social determinants of health (SDoH), to ensure fair outcomes for all patients. After reviewing the proposed rules, we have assembled this Insight InHealth to highlight the health equity provisions of the proposed rules on hospitals and their leadership.

Executive Summary

  • The new proposed rule for Medicare’s IPPS includes numerous changes related to health equity and SDoH that may impact hospital reimbursement

  • The Hospital Inpatient Quality Reporting (IQR) Program includes one health equity measure and two SDoH measures that will be mandatory by 2024

  • CMS is seeking stakeholder input regarding the collection and reporting of data related to health quality disparities

Health Equity /SDoH in the Hospital Inpatient Quality Reporting (IQR) Program


The IPPS proposed rule includes the addition of new measures to the IQR program, three of which pertain to healthy equity and social determinants of health (SDoH). We note that reporting of the new health equity measure will become mandatory for calendar year 2023, while reporting of the new social risk measures will be optional during 2023 but become mandatory for calendar year 2024. For reference, per the rules of the IQR program, failure to report these measures will result in a reduction in Medicare payment rates equal to one quarter of the annual payment rate update. As the payment rate update is 3.2 percent in 2023, failure to report the health equity measure would result in a decrease in reimbursement of 0.8 percent next year. A nearly one percent reduction in Medicare reimbursement represents a substantial amount of lost revenue. Accordingly, this insight expands upon the new measures and CMS’s rationale and reporting requirements associated with them.

New IQR Measures Specific to Health Equity and SDoH

The table below details the three new and proposed health equity and SDoH measures along with the associated reporting requirements.

Measure

​Description

Calculation

Hospital commitment to health equity

Assessment of a hospital’s commitment to health equity based on an attestation to commitment to the following domains:

  1. Equity is a strategic priority

  2. Data collection

  3. Data analysis

  4. Quality improvement

  5. Leadership engagement

Each of the domains contains up to four evaluation elements.

For each domain that a hospital meets all of the evaluation elements, one point is awarded. Therefore, the score ranges from 0 to 5. In order to submit an attestation, CMS will provide a resource guide (not posted as of April 20, 2022) at: https://qualitynet.cms.gov/inpatient/iqr/resources

Screen rate for SDoH measures

Percentage of patients who were screened for one of the following SDoH measures:

  • Food insecurity

  • Housing instability

  • Transportation needs

  • Utility difficulties

  • Interpersonal safety

Number of inpatients over the age of 18 that were screened for one or all of the SDoH measures divided by the total number of patients over age 18.

Screen positive rate for SDoH measure

Percentage of patients who screened positive for one of five SDOH measures

Number of inpatients over the age of 18 that screened positively for at least one of the SDoH measures divided by the total number of patients over age 18.

To provide hospitals with a resource to meet the screening required to assess the SDoH measures, CMS directed hospitals to the Accountable Health Communities Health-Related Social Needs Screening Tool, accessible (as of April 20, 2022) at: https://innovation.cms.gov/files/worksheets/ahcm-screeningtool.pdf.

Comments on Measures

In the commentary to the new proposed IQR measures, CMS noted the existing resources hospitals can leverage to meet reporting requirements. We encourage readers to review the details behind the attestations required for the health equity IQR measure; for ease of reference, we have reproduced a summary table from the proposed rules below.

In particular, we draw attention to the requirements on hospital leadership with regard to promoting health equity. In order to meet full attestation requirements, hospitals will need to develop strategic plans to identify priority populations experiencing health disparities and implement actionable goals and initiatives to address these disparities. Furthermore, hospitals will need to track SDoH data in their electronic health records system and stratify outcomes data based on populations experiencing disparities. Finally, hospital senior leadership and their board must review the strategic plan and its progress at least annually.


For the two SDOH IQR measures above, hospitals will need to ensure sufficient infrastructure and resources are in place to both: (i) screen patients for the five proposed SDoH measures; and (ii) track and report screening results for each patient. In aggregate, CMS estimates that the requirements associated with tracking the new measures (including the seven others not mentioned here) will result in a cost increase of $23.4 million across 3,150 IPPS hospitals (or around $7,500 per hospital).


CMS Requests for Information on Social Risk


Of potentially greater importance regarding future reimbursement plans is CMS’s request for information related to measuring healthcare quality disparities across the CMS quality programs. While the agency remains focused on collecting and reporting information on health disparities to encourage improvement, CMS states in its solicitation that “Payment accountability allows us to reward healthcare providers for having low disparity rates and performing well for vulnerable patient groups.”



In general, CMS endorses an approach based on the stratification of beneficiary populations to better quantify disparities. This process involves identifying subpopulations (e.g., racial and ethnic minorities, patients with disabilities, and rural beneficiaries) and comparing meaningful health outcome and access measures among this subpopulation to the larger population. The intent is to identify subpopulations that experience significant disparities in health outcomes and access to healthcare so that providers can develop initiatives to remediate the disparities. As implied in the quote from the prior paragraph, we anticipate that financial carrots and sticks will be implemented by CMS once a satisfactory process for measuring and reporting on disparities has been developed and adopted by the industry.


If the initiatives detailed in the proposed rule stand, hospital organizations must begin the process to develop and implement a tracking, reporting, and strategic infrastructure to address health equity immediately in order to avoid future costly reductions in reimbursement.


CMS Positions Health Equity as Key for Hospital Leaders
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