CMS Proposes FY 2019 Medicare IPPS/LTCH Rates And Policy Changes

Author:Ms Debra McCurdy
Profession:Reed Smith

The Centers for Medicare & Medicaid Services (CMS) has published its proposed rule updating the Medicare acute inpatient prospective payment system (IPPS) and long-term care hospital (LTCH) prospective payment system (PPS) for fiscal year (FY) 2019. The proposed rule also includes a request for information (RFI) on ways CMS can enhance interoperability in the health care system, along with a comment solicitation on ways to improve price transparency. The agency will accept comments on the proposed rule and RFI through June 25, 2018. The following are highlights of the sweeping regulation.

1.75% Increase in Medicare Acute Hospital Rates. CMS projects that total IPPS payments will increase by about $4.1 billion in FY 2019 compared to FY 2018 levels under the proposed rule. The IPPS national standardized amount would increase by 1.75%, based on a projected 2.8% market basket update that is reduced by a 0.8% multifactor productivity adjustment; further reduced by 0.75% as mandated by the Affordable Care Act (ACA); and increased by 0.5% as required by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). CMS also proposes to boost uncompensated care payments, capital payments, and low-volume hospital payments.

Quality Measures and Quality-Related Payment Adjustments. Updates to acute hospitals are subject to several quality-related adjustments. Potential updates to standardized amounts for FY 2019 under the proposed rule range from a high of 1.255% for a hospital that submits Hospital Inpatient Quality Reporting (IQR) Program data and is a meaningful Electronic Health Record (EHR) user, to a low of -1.55% for a hospital that does not submit quality data and is not a meaningful EHR user. Specific hospital payments can be impacted by various other factors, including penalties for excess readmissions under the Hospital Readmissions Reduction Program (HRRP), poor performance under the Hospital-Acquired Condition (HAC) Reduction Program, and adjustments under the Hospital Value-Based Purchasing (VBP) Program. For instance, CMS estimates that 2,610 hospitals will have their base operating DRG payments reduced under the HRRP by a total of approximately $566 million in FY 2019.

CMS proposes numerous changes to hospital quality and value programs to reduce the burden on hospitals and to align with the Administration's "Meaningful Measures" initiative. For instance, CMS seeks to "de-duplicate" measures that are currently reported in...

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