The payment rules for all the Medicare service silos that are updated on a fiscal year basis have been sent to the White House over the last several weeks. These include updates for hospitals, skilled nursing facilities and hospice, among others.
The gazillion dollar question is whether these updates will - or even can - account for all the labor expense created by pandemic disruptions.
When these rules are released in the next several weeks (usually before the end of April), the Office of the Actuary will release an updated model. That model will use historical data through 4Q 2021. The Employment Cost Index went vertical in the last quarter of the year, that should help. Unfortunately, the Office of the Actuary' external modeler uses a four-quarter rolling average for inputs. The recent realities are not likely to be fully baked in until the 2024 payment update with the interim improvement in the FY 2023 final rules.
With COVID-19 relief nearly dead and no other options presented, the FY 2023 payment update may not be good enough for many providers.
Emily Evans
Managing Director – Health Policy
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