New section

Content Background

New section

CMS Releases FY 2020 IPPS Proposed Rule

April 26, 2019

New section

New section

PRESS CONTACTS
Andrew Amari, Hospital Policy and Regulatory Specialist
Mary Mullaney, Director, Hospital Payment Policies
Phoebe Ramsey, Sr. Regulatory Analyst, Quality & Payment Policy

The Centers for Medicare and Medicaid Services (CMS) April 23 released the Inpatient Prospective Payment System (IPPS) proposed rule containing changes to Medicare payment policies and IPPS rates for fiscal year (FY) 2020.

Key proposals in the proposed rule are as follows:

Inpatient Hospital Update. CMS is proposing an increase of approximately 3.2% to operating payment rates for acute care hospitals that successfully participate in the Hospital Inpatient Quality Reporting (IQR) Program and are meaningful electronic health record (EHR) users.

Wage Index. Beginning in FY 2020, CMS proposes to increase the wage index for low wage index hospitals (wage index value below the 25th percentile) and decrease the wage index for high wage index hospitals (wage index value above the 75th percentile). The increase and decrease would be effective for four years to allow time for increased wages to be reflected in the wage index calculation.

Moreover, CMS seeks to remove hospitals with urban-to-rural reclassifications from the rural floor wage index calculation beginning in FY 2020. The rural floor ensures the wage index value for urban hospitals cannot be less than the wage index value applicable to hospitals in rural areas in the state. CMS also proposes a 5% cap on any decreases to a hospital’s final FY 2020 wage index when compared to its wage index from FY 2019 (a hospital’s final FY 2020 wage index would not be reduced beyond 95% of its final FY 2019 wage index).

Disproportionate Share Hospital (DSH) Payment Adjustment and Uncompensated Care Payment. CMS projects that it will distribute approximately $8.5 billion to disproportionate share hospitals in uncompensated care payments in FY 2020, roughly $216 million more than in FY 2019. Additionally, the agency proposes to use a single year of data on uncompensated care costs, FY 2015, from Worksheet S-10 of the Medicare cost report to distribute uncompensated care payments. CMS seeks public comments on whether the single year of Worksheet S-10 data should come from FY 2017 instead of FY 2015.

Direct Graduate Medical Education (DGME). CMS proposes to modify the definition of “nonprovider sites” to include critical access hospitals (CAHs). Hospitals may include residents training in a nonprovider setting in its full-time equivalent (FTE) count if the hospital incurs the residents’ salaries and fringe benefits while the residents are training at that site. CAHs are not considered nonprovider sites under CMS’s current policy. The proposed modification would allow hospitals to claim residents training in a CAH in its FTE count as long as the nonprovider setting requirements are met.

GME Resident Cap Slot Availability (Section 5506). CMS initiated Round 14 of its section 5506 application and selection process in response to the closure of Good Samaritan Hospital, located in Dayton, Ohio.

Chimeric Antigen Receptor (CAR) T-cell Therapies. CMS has not proposed to modify the current MS-DRG assignment for cases reporting CAR T-cell therapies for FY 2020. Instead, CMS plans to continue New Technology Add-on Payments (NTAPs) for CAR T-cell therapies for FY 2020, proposing to increase NTAPs from 50% of estimated costs of the case to 6%. Raising the NTAP percentage would increase the maximum add-on payment from $186,500 to $242,450. Moreover, CMS has solicited comments on other payment alternatives for FY 2020 CAR T-cell therapy, and whether cases assigned to any potential new MS-DRG for CAR T-cell therapy should exclude indirect medical education and DSH payments.

Extracorporeal Membrane Oxygenation (ECMO). CMS proposes to reassign peripheral ECMO procedures to Pre-MDC MS-DRG 003 (ECMO or Tracheostomy with Mechanical Ventilation >96 Hours or Principal Diagnosis Except Face, Mouth and Neck with Major O.R. Procedure).

Urban-to-Rural Reclassification. CMS introduced several changes to the reclassification process. CMS proposes to allow hospitals that wish to reclassify to rural to submit applications electronically or through facsimile to the appropriate CMS Regional Office (RO). Under current policy, hospitals are required to submit their requests to reclassify by mail to the appropriate RO.

CMS also proposes to change the requirements for hospitals reclassified as rural referral centers (RRCs) to cancel their reclassifications. Under current policy, cancellation for reclassified RRCs cannot be effective until the hospital has been paid as an RRC for 12 months. CMS intends to remove this cancellation policy specific to RRCs and instead apply a uniform cancellation policy for all hospitals. The proposed uniform policy would allow all hospitals to cancel their rural reclassification through a written request to the RO not less than 120 days prior to the end of a federal fiscal year, and the hospital’s cancellation of the classification would be effective beginning with the next federal fiscal year.

Documentation and Coding Adjustment. CMS is proposing to make an adjustment of +0.5% to the standardized amount for FY 2020 consistent with the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA, P.L. 114-10).

Outlier Fixed Loss Threshold. CMS is proposing a methodological change to its computation of the high cost outlier fixed-loss cost threshold (FLT). The change would incorporate an estimate of outlier reconciliation in determination of the FLT.

Quality Provisions. CMS seeks to remove two quality measures: One from the IQR Program (Claims-based Hospital-Wide All-Cause Readmission, beginning with FY 2026 payment determinations) and one from the Medicare and Medicaid Promoting Interoperability Programs (Verify Opioid Treatment Agreement, beginning in CY 2020).

Additionally, CMS proposes to adopt three measures for the IQR and invites public comment on three potential new electronic clinical quality measures (eCQMs) for the IQR and requests information on the inclusion of more meaningful measures for the Promoting Interoperability Programs to combat the opioid epidemic. The three new measures are: Hybrid Hospital-Wide All-Cause Readmission (Hybrid HWR) Measure with Claims and EHR Data beginning with FY 2026 payment determination following two years of voluntary reporting; and two new opioid-related eCQMs beginning with FY 2023 payment determination: Safe Use of Opioids —Concurrent Prescribing and Hospital Harm — Opioid-Related Adverse Events.

There are no significant proposed changes to the measures or methodologies for the pay-for-performance programs (the Hospital-Acquired Conditions Reduction Program, the Hospital Readmission Reduction Program, or the Hospital Value-Based Purchasing Program).

The AAMC will provide comments on the proposed rule, which are due June 24.

New section

Left Patch