CMS' final IPPS rule for 2018: 10 things to know

CMS has issued its Inpatient Prospective Payment System final rule for fiscal year 2018, which increases payments to acute care hospitals next year. 

The 2,456-page rule also includes proposed rates for long-term care hospitals. Overall, the final rule applies to about 3,330 acute care hospitals and 420 long-term care hospitals.

Here are 10 key points from CMS' final IPPS rule.

Payment update
1. Under the final rule, acute care hospitals that report quality data and are also meaningful users of EHRs will receive a 1.2 percent increase in Medicare operating rates in fiscal year 2018.  

2. CMS arrived at its rate of 1.2 percent through the following updates: a positive 2.7 percent market basket update, a negative 0.6 percentage point update for a productivity adjustment, a positive 0.45 percentage point adjustment required by the 21st Century Cures Act, a negative 0.75 percentage point update for cuts under the ACA and a negative 0.6 percent updated to remove the adjustment to offset the estimated costs of the two-midnight rule. 

3. CMS projects the rate increase, together with other changes to IPPS payment policies, will cause total Medicare spending on inpatient hospital services to increase by approximately $2.4 billion in fiscal 2018.

Medicare disproportionate share hospital payments
4. CMS will 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 change will result in Medicare DSH payments increasing by $800 million in fiscal year 2018.

5. CMS will use worksheet S-10 data to determine uncompensated care payments and distribution beginning in fiscal year 2018.

Hospital Inpatient Quality Reporting Program
6. Under the final rule, CMS will replace the pain management questions in the HCAHPS Survey to focus on the hospital's communications with patients about the patients' pain during the hospital stay. This change will take effect with surveys administered in January 2018.

7. CMS finalized several changes to the electronic clinical quality measures and updated the extraordinary circumstances exception policy.

Hospital Readmissions Reduction Program
8. CMS will implement the socioeconomic adjustment approach mandated by the 21st Century Cures Act for the fiscal year 2019 Hospital Readmissions Reduction Program. CMS will 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
9. For 2018, CMS modified the EHR reporting periods for hospitals attesting to meaningful use from a full year to a minimum of any continuous 90-day period during the calendar year.

Hospital Value-Based Purchasing Program
10. CMS will remove one measure in fiscal year 2019 and adopt one new measure in FY 2022 and another in FY 2023. CMS will remove the PSI 90 measure from the safety domain beginning in FY 2019, and adopt the patient safety and adverse events composite PSI 90 measure beginning in FY 2023. CMS will also adopt 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 final rule here.

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