Healthcare News & Insights

CMS inpatient payment rule brings payment increase & more changes

The Centers for Medicare & Medicaid Services (CMS) recently released its proposed rule for next year’s hospital inpatient payment schedule. Along with a pay increase, there are several other changes coming that facilities need to know about. 

According to a fact sheet from CMS, the payment increase is one of the most significant changes in the proposed payment updates.

The agency’s boosting payments for inpatient stays for facilities that successfully participate in the Hospital Inpatient Quality Reporting (IQR) program. That and other smaller payment updates will together equal a 1.7% increase. Payments will also increase for Medicare uncompensated care. Rates for payments distributed to Medicare disproportionate share hospitals will rise by about 1.2%.

That means, in all, inpatient hospital payments will increase by 2.9%. CMS plans to spend an additional $3.1 billion on inpatient hospital services in 2018.

Even with these payment boosts, the agency still plans to continue pay cuts for facilities that don’t make the grade. Hospitals will continue to receive penalties for having high readmission rates, as well as a 1% pay cut if they’re not meeting the requirements of the Hospital-Acquired Condition Reduction Program.

Payments will also be adjusted due to performance in the Hospital Value-Based Purchasing program, though these adjustments can either lead to an increase or decrease in payments.

Program updates

Other changes are being made to CMS’ various initiatives and programs.

With the Hospital-Acquired Conditions Reduction Program, the agency is planning to:

  • make updates to the time period being used to calculate performance for the 2020 fiscal year
  • create additional measures
  • account for social risk factors
  • account for disability and medical complexity in certain measures, and
  • update the Extraordinary Circumstance Exception policy.

The agency is currently seeking comments about these pending changes.

For the Hospital Readmissions Reduction Program, CMS plans to update the payment adjustment, penalizing hospitals based on their performance to other facilities who serve a similar proportion of dual-eligible patients who receive both Medicare and Medicaid. This will require the agency to create a new payment formula, as well as a way to accurately calculate the proportion of dual-eligible patients so hospitals can be grouped properly.

Changes will also be coming for hospitals who report quality measures via their electronic health records (EHR) system. The reporting period and number of quality measures submitted will change for both 2017 and 2018, depending on whether hospitals are also participating in the EHR Incentive Program or have met meaningful use requirements.

Additional updates include changes to questions on patient satisfaction surveys about hospital pain management and changes to penalties for providers at ambulatory surgery centers participating in the EHR Incentive Program. Further details can be found in the text of the proposed rule, which will be available on the Federal Register April 28.

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