CMS Issues Proposed Rule for Inpatient and Long-Term Care Hospitals in Rural and Underserved Communities

The rule is designed to close health care equity gaps and provide greater access to care

On April 27, 2021, CMS issued a proposed rule CMS-1752-P. This rule is designed to enhance the medical workforce in rural and underserved communities. It is proposed for 2022 for Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital (LTCH). These changes would take place in FY 2022.

This rule builds on the Biden Administration’s work to close health care equity gaps. There are many provisions throughout the address these gaps.

Hospital and Long-Term Care Provisions

CMS recognizes that there is a shortage of individuals willing to work in long-term care hospitals and other hospitals in rural and underserved areas. In order to close the health care equity gaps, this needs to be addressed.

Thus, the proposed rule would fund medical residency positions in underserved and rural communities. This is a way to address workforce shortages and encourage more health professionals to work in these areas. It also provides funds and methods to retain and train high-quality physicians.

CMS is proposing to distribute 1,000 additional physician residency slots to qualifying long-term care hospitals and other facilities.  200 slots will be available over 5 years. This is in accordance with the Consolidated Appropriations Act, 2021. Estimates for the additional funding necessary for these positions total $300 million.

HHS Secretary Xavier Becerra stated, “Hospitals are often the backbone of rural communities – but the COVID-19 pandemic has hit rural hospitals hard, and too many are struggling to stay afloat. This rule will give hospitals more relief and additional tools to care for COVID-19 patients and it will also bolster the health care workforce in rural and underserved communities.” Becerra followed that up with, “The Biden Administration is committed to expanding health equity in communities across the country, especially in rural America.”

CMS Striving to Revise Value-Based Payment Models

With this proposed rule, CMS is working to establish new requirements and revise existing ones for several VBP programs. The programs that are touched on in the new rule include:

  • Hospital Value-Based Purchasing (VBP) Program
  • Hospital Readmissions Reduction Program
  • Hospital-Acquired Condition (HAC) Reduction Program
  • Hospital Inpatient Quality (IQR) Reporting Program
  • Long-Term Care Hospital (LTCH) Quality Reporting Program
  • PPS-Exempt Cancer Hospital Reporting (PCHQR) Program
  • Medicare Promoting Interoperability Program


With this proposed rule, CMS is also requesting comments regarding ways to modernize the existing quality measures system. They would like to shift to digital quality measurement.

More information on Fiscal Year (FY) 2022 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital (LTCH) Rates Proposed Rule (CMS-1752-P) can be found in the CMS Fact Sheet.

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The VBP Blog is a comprehensive resource for all things related to value-based payments. Up-to-date news, informative webinars, and relevant blogs in the VBP sphere to help your organization find success.