CMS’ 2018 IPPS Proposed Rule: 9 Things to Know

By Ayla Ellison for Becker’s Hospital CFO

CMS released its 2018 Medicare Inpatient Prospective Payment System proposed rule on Friday, which increases payments to acute care hospitals next year.

The rule also includes proposed rates for long-term care hospitals. Overall, the proposed rule would apply to about 3,330 acute care hospitals and 420 long-term care hospitals. The rule will be published in the Federal Register April 28, and comments will be accepted through June 13.

Here are nine key takeaways from CMS’ proposed IPPS rule.

1. CMS recommends acute care hospitals that report quality data and are also meaningful users of EHRs receive a 1.6 percent increase in Medicare operating rates in 2018.

2. CMS arrived at its proposed rate of 1.6 through the following updates: a positive 2.9 percent market basket update, a negative 0.4 percentage point update for a productivity adjustment, a negative 0.75 percentage point update for cuts under the ACA, a positive 0.46 percent adjustment to partially restore cuts made as a result of the American Taxpayer Relief Act of 2012 and a negative 0.6 percent update to remove the adjustment to offset the estimated costs of the two-midnight rule.

Medicare disproportionate share hospital payments
3. CMS proposes to use data from its National Health Expenditure Accounts instead of data from the Congressional Budget Office to estimate the percent change in the rate of uninsurance, which is used in calculating the total amount of uncompensated care payments available to Medicare disproportionate share hospitals. CMS said this proposed change would result in DSH payments increasing by $1 billion in fiscal year 2018.

4. CMS proposes using worksheet S-10 data to determine uncompensated care payments and distribution beginning in FY 2018.

Hospital Inpatient Quality Reporting Program
5. CMS is seeking comment on several proposed changes to the Hospital Inpatient Quality Reporting Program, including on additional measures for potential future adoption and an update to the extraordinary circumstances exception policy for the FY 2019 payment determination.

6. For 2018, CMS proposes a new voluntary reporting measure — the Hybrid Hospital-Wide Readmission Measure with Claims and Electronic Health Record Data.

Hospital Readmissions Reduction Program
7. CMS proposes to implement the socioeconomic adjustment approach mandated by the 21st Century Cures Act for the FY 2019 Hospital Readmissions Reduction Program. Under this proposal, CMS would assess penalties based on a hospital’s performance relative to other hospitals with a similar proportion of patients who are dually eligible for Medicare and Medicaid.

EHR Incentive Program
8. For 2018, CMS proposes modifying the EHR reporting periods for hospitals attesting to meaningful use for the first time and hospitals that have attested in the past from the full year to a minimum of any continuous 90-day period during the calendar year.                                

Hospital Value-Based Purchasing Program
9. CMS proposes removing one measure in FY 2019 and adopting one new measure in FY 2022 and another in FY 2023. CMS recommends removing the PSI 90 measure from the safety domain beginning in FY 2019, adopting the patient safety and adverse events composite PSI 90 measure beginning in FY 2023, and adopting the hospital-level, risk-standardized payment associated with a 30-day episode of care for pneumonia measure for the efficiency and cost reduction domain in FY 2022.

Access the proposed rule here.

Access CMS’ fact sheet here.