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  • Washington Highlights

    AAMC Submits Comments on the FY 2021 IPPS Proposed Rule


    Mary Mullaney, Director, Hospital Payment Policies
    Phoebe Ramsey, Director, Physician Payment & Quality

    The AAMC submitted comments on July 10 about the Centers for Medicare & Medicaid Services’ (CMS’) fiscal year (FY) 2021 Inpatient Prospective Payment System (IPPS) proposed rule.

    Below are highlights of AAMC comments on the proposed rule:

    Graduate Medical Education. CMS is proposing that residents would be considered “displaced” at the time a teaching hospital or  residency program closure is announced. The AAMC strongly supports the proposal.

    Medicare Bad Debt. CMS is proposing several changes to hospital reporting of bad debt, including requiring hospitals to report some bad debt as implicit price concessions. Many of the proposals would be effective retroactively. The AAMC asks CMS to make clear that implicit price concessions are considered bad debt and should be included on the Medicare cost report. The AAMC strongly opposes making any of the proposed changes effective retroactively.

    Chimeric Antigen Receptor (CAR) T-cell Therapy. CMS is proposing to create a new Medicare Severity-Diagnosis Related Group (MS-DRG) for CAR T-cell cases and to exclude clinical trial cases from the calculation of the relative weight. The AAMC is supportive of these changes but requests that CMS consider this new MS-DRG as an interim step until more data are collected. The AAMC remains concerned that reimbursement is still inadequate.

    Collection of Third-Party Negotiated Rates. CMS is proposing to require hospitals to report negotiated rates from third-party payers, including Medicare Advantage, on the Medicare cost report. The AAMC urges CMS not to finalize this proposal. CMS is also considering using negotiated rates to calculate MS-DRG relative weights. The AAMC believes relative weights should be based on hospital resource use instead of negotiated rates.

    Wage Index. CMS is proposing to continue its wage index policy finalized in the FY 2020 IPPS final rule. The AAMC believes that CMS should continue to work with stakeholders to develop a comprehensive wage index reform. CMS is also proposing to adopt changes outlined in the Office of Management and Budget Bulletin No. 18-04. The AAMC requests that CMS not adopt these changes and wait until after the decennial census to make changes to the labor market delineations.

    Disproportionate Share Hospital and Uncompensated Care Payments. CMS is proposing to use one year (FY 2017) of audited Worksheet S-10 data to calculate uncompensated care payments for FY 2021. The AAMC is supportive of this proposal. The AAMC requests that CMS adjust the methodology used to calculate DSH and uncompensated care payments for FY 2021 to accurately account for the increased number of Medicaid beneficiaries and uninsured individuals in 2020 due to the COVID-19 public health emergency.

    Lastly, implicit price concessions must be included in the definition of uncompensated care costs and in the calculations.

    Comprehensive Care for Joint Replacement (CJR). CMS is proposing to create two new MS-DRGs for hip replacement with the primary diagnosis of hip fracture. The AAMC supports this proposal and requests that CMS adjust the CJR target prices to account for both the new base year costs and the associated payments for these new MS-DRGs.

    Data Collection to Address and Eliminate Inequities: To address and eliminate health care inequities, the AAMC urges CMS to take the lead on standardizing the collection of accurate data to help hospitals and communities meaningfully mitigate the impacts of social determinants of health factors and end inequities in care and outcomes.

    Hospital Quality Star Ratings: CMS decided to not include in this proposed rule changes to the Hospital Quality Star Ratings system due to the public health emergency. The AAMC supports this decision and requests that CMS suspend updating the ratings in consideration of COVID-19’s impacts on quality measurement and remove publication of current ratings until it is able to address significant methodology concerns through future rule-making.