13 minute read 30 Sep 2022
Woman doctor is checking data on tablet

How health leaders can invest to satisfy new health equity mandates

By Health Regulation

Health care regulatory team, Ernst & Young LLP (EY US)

Helping payers, providers, life sciences companies and other health care enablers sharpen their focus on the regulatory landscape for health care.

13 minute read 30 Sep 2022

Implementing or enhancing strategic decision-making around data, supply chain, prenatal care and more will be essential.

In brief

  • As CMS continues sharpening its focus on disparities in health and health care, the agency has adopted new measures and mandates around advancing health equity.
  • These new rules include quality metrics and reporting requirements that link back to payment, centering on commitments to equity, maternal health, patient data collection and more.
  • At the same time, CMS is ramping up its focus on the disproportionate impact of climate change on vulnerable populations and opening dialogue on next steps to meet their equity agenda.

As the health care ecosystem continues to rapidly evolve, the Centers for Medicare & Medicaid Services (CMS) is increasingly focused on addressing disparities in health and health care, along with other key considerations around health equity. CMS defines health equity as “the attainment of the highest level of health for all people, where everyone has a fair and just opportunity to attain their optimal health regardless of race, ethnicity, disability, sexual orientation, gender identity, socioeconomic status, geography, preferred language, or other factors that affect access to care and health outcomes.”¹

By one recent estimate, racial disparities in health alone cost the US economy billions each year, including $93 billion in excess health care costs and $42 billion in lost productivity.² Recent evidence also shows the pandemic exacerbated underlying disparities and that “people of color fared worse compared to their White counterparts across a range of health measures, including infant mortality, pregnancy-related deaths, prevalence of chronic conditions, and overall physical and mental health status.”³ Moreover, research from the Centers for Disease Control and Prevention (CDC) reveals stark disparities in life expectancy and other factors among Black Americans and vast inequities linked to social determinants of health.⁴ As such, the Biden administration has identified health equity as a key priority across its Department of Health and Human Services (HHS), reflected through recent agency actions. CMS expressed its commitment to eliminating barriers to equitable care for underserved or disadvantaged populations, recently issuing its top five health equity priorities for the next 10 years:

  • Chart description

    Top five health equity priorities for the next 10 years:

    1. Expand the collection, reporting and analysis of standardized data 
    2. Assess causes of disparities within CMS programs, and address inequities in policies and operations to close gaps
    3. Build capacity of health care organizations and the workforce to reduce health and health care disparities
    4. Advance language access, health literacy and the provision of culturally tailored services
    5. Increase all forms of accessibility to health care services and coverage [5]

In a series of critical proposals issued this spring and summer, CMS has continued to home in on advancing health equity. These proposed rules aim to tackle a wide variety of health equity challenges by not only prescribing new quality metrics and reporting requirements, but also linking them to payment and enabling flexibilities in care delivery. For example, in its recently finalized fiscal year 2023 Inpatient Prospective Payment System (IPPS) rule, CMS set out several equity- and climate-focused reporting requirements and requests for information (RFIs) for hospitals and other providers. Upon finalizing this rule in early August 2022, CMS noted its intent to “promote financial stewardship of the Medicare program” and “encourage hospitals to build health equity into their core functions.”⁶ Below, we provide an overview of newly finalized proposals, along with key insights for strategic decision-makers as they prepare for these shifting headwinds. 

Accelerating focus on equity in quality reporting programs under CMS mandates

CMS finalized three new equity-related measures as part of its Hospital Inpatient Quality Reporting (IQR) Program. The first is a five-pillar framework designed to drive hospitals’ commitment to establishing a culture of equity and delivering more equitable health care by capturing activities across five key domains: strategic planning, data collection, data analysis, quality improvement and leadership engagement (see Figure 1), beginning with reporting in calendar year (CY) 2023. Each pillar is accompanied by a list of attestations that hospitals must satisfy to qualify for the measure numerator.

  • Chart description

    CMS’s five-pillar framework to focus on equity in quality reporting programs:

    Domain 1: Equity as a strategic priority

    Commitment: Elevate health equity as a key organizational priority, which strengthens the hospital’s dedication to reducing disparities


    • Hospital’s strategic plan identifies priority populations that currently experience health care disparities while also identifying equity goals and discrete action steps to achieving them.
    • Hospital’s strategic plan outlines resources dedicated to achieving its goals.
    • Hospital’s strategic plan also describes its approach for engaging key stakeholders, including community-based organizations.

    Domain 2: Data collection

    Commitment: Collecting valid and reliable demographic and SDOH* data on patients served in a hospital


    • Hospital collects demographic and SDOH information on the majority of its patients.
    • Hospital has training for staff in culturally sensitive collection of demographic and SDOH information.
    • Hospital inputs demographic and SDOH information collected from patients into structured, interoperable data elements using a certified EHR technology.

    Domain 3: Data analysis

    Commitment: Utilizing data analysis to gain insights into which factors contribute to health disparities and determine how to respond


    • Hospital stratifies KPIs by demographic variables and by SDOH to identify equity gaps.

    Domain 4: Quality improvement

    Commitment: Engaging in quality improvement activities, which can help drive equity around the delivery of high-quality care


    • Hospital participates in local, regional or national quality improvement activities focused on reducing health disparities.

    Domain 5: Culture of equity

    Commitment: Demonstrating routine and thorough attention to equity and creating an organizational culture of equity, which can help leaders and staff improve their capacity to address disparities


    • Hospital’s senior leadership, including chief executives and the entire hospital board of trustees, annually reviews the organization’s strategic plan for achieving health equity.
    • Hospital’s senior leadership, including chief executives and the entire hospital board of trustees, annually reviews KPIs stratified by demographic and social factors.

    *SDOH means the social determinants of health.

Similar to proposals in the IPPS, there were also RFIs in the proposed Medicare Physician Fee Schedule rule regarding the development and implementation of health equity measures in the Quality Payment Program and Medicare Shared Savings Program (MSSP), as well as proposed MSSP changes aimed at enhancing equity. This includes a proposal to furnish upfront capital to providers serving rural and disadvantaged populations to enable them to succeed in value-based care models and allow other flexibilities, such as utilizing the funds to address the social and other needs of people with Medicare. 

Other recent proposals, such as those in the proposed Hospital Outpatient Prospective Payment System rule are also aimed at enhancing equity, such as those allowing for audio-only telehealth for populations that lack access to broadband and making changes to organ procurement processes to promote equity within the transplant ecosystem.

An expansion of maternal health measures under CMS

Amid a particularly contentious political climate around maternal health, the Biden administration recently published its blueprint⁷ for addressing the maternal health crisis, along with a related action plan,⁸ outlining five priority goals:

  • Chart description

    Maternal health measures outlining five priority goals:

    1. Increase access to and coverage of comprehensive high-quality maternal health services, including behavioral health services.
    2. Ensure those giving birth are heard and are decision-makers in accountable systems of care.
    3. Advance data collection, standardization, transparency, research and analysis.
    4. Expand and diversify the perinatal workforce.
    5. Strengthen economic and social supports for people before, during and after pregnancy.

Against this backdrop, and with nationwide challenges around disproportionate maternal health outcomes persisting, CMS implemented the Maternal Morbidity Structural Measure (MMSM) in fiscal year 2022. This attestation requirement was designed to capture whether hospitals are participating in a structured state or national perinatal quality improvement (QI) collaborative, and implementing patient safety practices or bundles as part of these QI initiatives. While hospital reporting around this measure is already underway, CMS advanced through the IPPS the following additional actions to help reduce maternal mortality and morbidity while also promoting more equitable maternal care:

  • Chart description

    Maternal Morbidity Structural Measure (MMSM)

    New “birthing-friendly” hospital designation. This new designation is intended to “assist consumers in choosing hospitals that have demonstrated a commitment to maternal health through implementation of best practices that advance health care quality, safety and equity for pregnant and postpartum patients.”¹ Initially, the designation would be given to hospitals based on their MMSM reporting, which CMS believes is a good indicator of a hospital’s ability to manage the conditions that result in severe maternal health challenges. According to HHS, however, the designation criteria could be expanded at some point in the future. Under the newly finalized rule, birthing-friendly hospitals will be identified publicly via a CMS website beginning in fall 2023.

    Two new perinatal electronic clinical quality measures (eCQMs). These eCQMs for cesarean birth and severe obstetric complications were adopted and will be available for self-selection in CY 2023 followed by mandatory reporting in CY 2024.

    • eCQM for low-risk cesarean (C-section) deliveries. This new eCQM for C-sections was created to improve care safety by determining a hospital’s rate of first-birth cesarean deliveries (also called NTSV C-sections), with the ultimate goal of reducing the occurrence of non-medically indicated C-sections.
    • eCQM for risk-adjusted severe obstetric complications. This new measure was created as part of CMS’s initiative to address high maternal morbidity and mortality rates, assessing the rate of severe obstetric complications during inpatient delivery hospitalization.

    RFI around health equity and maternal care. As part of its enhanced focus on birthing care, CMS will consider public comments received from its request for information to identify additional mechanisms to advance health equity and reduce disparities in maternal care.

    [¹] “CMS Proposes Policies to Advance Health Equity and Maternal Health, Support Hospitals,” Department of Health and Human Services (HHS) website, https://www.hhs.gov/about/news/2022/04/18/cms-proposes-policies-advance-health-equity-maternal-health-support-hospitals.html, 18 April 2022.

A slate of RFIs that are broad in scope

In addition to the above RFI around equity in maternal health, the final IPPS rule noted that it will consider public comments received from several other requests for information that hint at CMS’s thinking and future intentions for policy development. They include:

  • How hospital reporting around diagnosis codes that are linked to the social determinants of health (i.e., Z codes) could drive improved recognition of the severity and/or complexity of illness or disease, as well as more efficient resource allocation under the Medicare Severity-Diagnosis Related Group (MS-DRG) classification system for hospital stays
  • How CMS should leverage measurement and stratification to address health care disparities and advance health care equity across quality programs

CMS will likely try to strike a balance in future rulemaking between concerns around additional administrative burden noted by commenters and enhanced reporting and payment aimed at delivering more equitable care. 

Additional CMS mandates around climate change, with an equity lens 

In addition to its new measures around equity and payment, CMS is also focused on climate-related issues. As scrutiny mounts around sustainability efforts within the health care ecosystem, HHS recently rolled out a voluntary pledge for hospitals, health systems, suppliers, drug manufacturers and other stakeholders to reduce carbon emissions by 50% by 2030 and eliminate carbon emissions by 2050. For organizations that agree to sign the pledge, HHS has asked them to publicly report their progress, provide an inventory of their supply chain emissions, develop climate resiliency plans and implement executive leadership oversight of climate-related efforts. 

In addition, the department issued an RFI inquiring into how hospitals, nursing homes, hospices, home health agencies and other providers can better prepare for the harmful impacts of climate change on beneficiaries and consumers, and how the department can support them in doing so. CMS also sought comment on what HHS and CMS can do to help hospitals more effectively do the following: 

  • Determine likely climate impacts on their patients so that they can develop plans to mitigate those impacts
  • Understand the threats that climate change presents to their operations and better prepare for continuous operations should there be climate-related emergencies
  • Understand how to take action to reduce emissions and track their progress

HHS also recently announced the establishment of a new environmental justice office under the Office of the Assistant Secretary for Health’s Office of Climate Change and Health Equity (OCCHE). This new office will focus on issues such as lead exposure, wastewater treatment and discriminatory public health investments, among other health inequities relating to the environment. While funding for OCCHE has not yet been authorized by Congress, the new office will develop a department-wide plan on environmental justice and health, along with providing oversight of annual reports for HHS.

CMS mandates offer a strategic approach for both new and mature initiatives

As health care providers prepare to satisfy new health equity and climate mandates in 2023 and beyond, implementing or enhancing strategic decision-making around data, culture, supply chain and more will be essential. As such, the following key considerations should be top of mind for health leaders:

Health equity

  • Chart description

    Health Equity

    • How do you define and identify your patient population?
    • Have you determined what excellence in health equity would look like for your organization and patient population?
    • Are your organization’s health equity strategies primarily focused on diversity and inclusion, or do they also contemplate driving demonstrable impact around key health outcomes?
    • Do your data collection and analysis strategies drive interoperability between platforms and utilize both structured and unstructured data?
    • Are there opportunities to repurpose the data your organization has already collected to gain deeper insights about the social determinants of health for your patient population?
    • Have you established strategic partnerships with community-based organizations around addressing specific disparities or community conditions that exacerbate inequity?
    • Have you gathered data and explored strategies that address disproportionate outcomes across the continuum of prenatal and postnatal maternal health care?
    • Is your organization focused on driving improvements in workforce equity as a means of enhancing health equity among your patient population?
    • Does your talent recruitment strategy enable culturally competent care that addresses diverse patient needs? 


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    • Have you conducted a community benefits assessment to measure the disproportionate impact of climate change on vulnerable populations in your community?
    • Have you benchmarked your peers’ sustainability reporting to keep pace with industry standards?
    • Is compliance with reporting requirements like those described above baked into your organizational strategy?
    • Have you developed strategies that drive waste reduction, including benchmarks around water consumption, food sourcing, recycling and composting, housekeeping and other key areas?
    • Do your supply chain partners (including pharma partners) and organizations associated with your investments and endowments share your goals around minimizing carbon emissions with an eye toward driving greater equity?
    • Would teaming with an energy company to codevelop strategies that reduce your organization’s purchased electricity emissions be feasible for your organization?
    • Have you considered issuing green bonds or municipal bonds with an ESG designation to fund key renewable energy procurement actions?
  • Show references#Hide references

    [1] “CMS Framework for Health Equity 2022–2032,” CMS website, https://www.cms.gov/files/document/cms-framework-health-equity.pdf, April 2022.

    [2] “The Business Case For Racial Equity: A Strategy For Growth,” Altarum website, https://altarum.org/RacialEquity2018, 24 April 2018.

    [3] “Key Facts on Health and Health Care by Race and Ethnicity,” Kaiser Family Foundation website, https://www.kff.org/racial-equity-and-health-policy/report/key-facts-on-health-and-health-care-by-race-and-ethnicity/, 26 January 2022.

    [4] “FastStats – Life Expectancy,” CDC website, https://www.cdc.gov/nchs/fastats/life-expectancy.htm, 25 March 2022; “Social Determinants of Health: Know What Affects Health,” CDC website, https://www.cdc.gov/socialdeterminants/index.htm, 30 September 2021.

    [5] Ibid.

    [6] “New CMS Rule Increases Payments for Acute Care Hospitals and Advances Health Equity, Maternal Health,” CMS website, https://www.cms.gov/newsroom/press-releases/new-cms-rule-increases-payments-acute-care-hospitals-and-advances-health-equity-maternal-health, 1 August 2022.

    [7] “White House Blueprint for Addressing the Maternal Health Crisis,” White House website, https://www.whitehouse.gov/wp-content/uploads/2022/06/Maternal-Health-Blueprint.pdf, June 2022.

    [8] “CMS Releases Maternity Care Action Plan to Implement Biden-Harris Maternal Health Blueprint; Launches Industry Call to Action,” CMS website, https://www.cms.gov/newsroom/press-releases/cms-releases-maternity-care-action-plan-implement-biden-harris-maternal-health-blueprint-launches, 26 July 2022.

    [9] “CMS Proposes Policies to Advance Health Equity and Maternal Health, Support Hospitals,” Department of Health and Human Services (HHS) website, https://www.hhs.gov/about/news/2022/04/18/cms-proposes-policies-advance-health-equity-maternal-health-support-hospitals.html, 18 April 2022.


Because recent government mandates constitute a significant evolution of health equity and climate reporting — along with payment — health care leaders who treat these measures as a simple compliance exercise will miss a vital opportunity to lead in this space. For both new and more mature initiatives, accelerating climate and equity goals with a strategic mindset will go a long way toward ensuring greater equity and value in care.

About this article

By Health Regulation

Health care regulatory team, Ernst & Young LLP (EY US)

Helping payers, providers, life sciences companies and other health care enablers sharpen their focus on the regulatory landscape for health care.