Medicare advisory group recommends 2% payment increase for hospitals in 2020

At a meeting last week, the Medicare Payment Advisory Commission advised Congress to increase hospital inpatient and outpatient payment rates by 2 percent in 2020, according to the American Hospital Association.

This increase serves as a current law market-basket update for the hospital inpatient prospective payment system and the outpatient prospective payment system. The recommendations aim to maintain some financial pressure on hospitals to mitigate cost growth while reducing the disparity between on-campus and off-campus payments.

At the meeting, MedPAC also recommended a 2 percent payment increase for long-term care hospitals. However, it suggested eliminating payment updates for skilled nursing facilities and reducing payment for inpatient rehabilitation by 5 percent.

Along with the payment updates, MedPAC recommended replacing current quality programs with the Hospital Value Incentive Program. The new program would eliminate the Inpatient Quality Reporting Program and merge the existing Hospital Readmissions Reduction Program, Hospital Value-based Purchasing Program and Hospital-acquired Condition Reduction Program.  

The AHA gave the 2 percent payment update for the IPPS and OPPS its blessing, but called on MedPAC to delay the new value incentive program due to concerns with its design.


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