CMS' proposed inpatient payment rule for 2021: 8 things to know

CMS released its annual Inpatient Prospective Payment System proposed rule May 11, which would raise Medicare payment rates for acute care hospitals. 

Here are eight key takeaways from the 2021 proposed rule

1. Payment rate update. Under the proposed rule, acute care hospitals that report quality data and are meaningful users of EHRs will receive a 3.1 percent increase in Medicare rates in fiscal year 2021, compared to 2020. Overall payments for inpatient services would increase by about 1.6 percent, or $2.07 billion, in fiscal year 2021, CMS said. 

2. Disproportionate Share Hospital payments. Under the proposed rule, CMS would distribute $7.8 billion in DSH payments in FY 2021, a decrease of more than $500 million compared to FY 2020. CMS proposed using a single year of data on uncompensated care costs to distribute DSH funds. 

3. Price transparency. The proposed rule builds on the price transparency rule CMS finalized last year. The proposal would require hospitals to list their median payer-specific negotiated rates for inpatient services, by Medicare Severity-Diagnosis Related Group, on Medicare cost reports. CMS is also seeking feedback on using these rates to determine DRG weights. 

4. New DRG. The proposed rule would create a new DRG for CAR T-cell therapy based on available Medicare claims data. 

"Currently, CAR-T hospital cases are paid at the same rate as bone marrow transplants and qualify for additional payments through the temporary new technology add-on payment for high cost cases that's set to expire this year," CMS said. "The new inpatient hospital payment category … for CAR-T will provide a predictable payment rate for hospitals administering the therapy."

5. Add-on payments. CMS proposed new technology add-on payments for certain antimicrobials approved under the FDA's Limited Population Pathway for Antibacterial and Antifungal Drugs. "The LPAD pathway encourages the development of safe and effective drug products that address unmet needs of patients with serious bacterial and fungal infections," CMS said. 

To allow eligible antimicrobial products to begin receiving the add-on payment sooner, CMS proposed providing conditional approval for antimicrobial products that meet criteria for the add-on payment but do not receive FDA approval in time for consideration in the final rule. 

6. Graduate medical education policy. The proposed rule would expand the definition of who is considered a displaced resident when teaching hospitals and residency programs close. The proposed policies would allow funding to be transferred for certain residents who are not physically at the hospital training when it closes. The proposals are meant to provide more flexibility for residents to transfer while a hospital or residency program is winding down operations, CMS said. 

7. Inpatient Quality Reporting Program. CMS proposed several changes to the Inpatient Quality Reporting Program. Starting in the 2021 reporting period, CMS wants to gradually increase the number of quarters of electronic clinical quality measure data until it reaches a full year of data for the 2023 reporting period. Under the proposed rule, electronic clinical quality measure data would be publicly available in fall 2022, beginning with data reported for 2021. 

8. Comment period. CMS will accept comments on the proposed IPPS rule through July 10. 

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