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CMS Issues FY 2019 IPPS Proposed Rule

A new proposed rule for Medicare’s Inpatient Prospective Payment System (IPPS) for fiscal year (FY) 2019 would increase inpatient operating payment rates by 1.75 percent.

Medicare DSH Changes

For FY 2019, CMS estimates total Medicare disproportionate share hospital (DSH) payments will be $12.3 billion, or more than $1.6 billion over FY 2018 levels. Of these DSH payments, $8.25 billion will be uncompensated care (UC)based payments, or nearly $1.5 billion more than UC payments in FY 2018.

CMS proposes a methodology for calculating Medicare DSH payments, noting that it will continue the transition to using Medicare cost report data for calculating each hospital’s share of UC costs. CMS proposes to use two years of UC cost data from worksheet S-10 of the Medicare cost report, along with one year of low-income insured days data, to determine each hospital’s share of UC payments. In FY 2018, CMS has used one year of S-10 data and two years of low-income insured days data.

HRRP Payment Adjustments

The 21st Century Cures Act required CMS to develop a transitional methodology for the Hospital Readmissions Reduction Program (HRRP) that allows for separate comparison of hospitals based on a facility’s proportion of patients dually eligible for Medicare and Medicaid, which is a proxy for socioeconomic status.

In the FY 2018 IPPS final rule, CMS finalized a payment adjustment methodology in which hospital performance is assessed relative to the performance of hospitals within the same peer group. Hospitals are stratified into five peer groups, or quintiles, based on proportion of dual-eligible stays. CMS will implement the stratified methodology in the FY 2019 program.

In the proposed rule, CMS clarifies definitions of dual-eligible patients, the proportion of dual-eligibles, and the applicable period for dual eligibility.

Electronic Health Records

CMS proposes major changes to the Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs, beginning with a new name: the Promoting Interoperability Programs. This name change also applies to the Advancing Care Information category of the Merit-based Incentive Payment System (MIPS) for eligible clinicians.

In addition to proposing the addition of three measures and the removal of six measures from the Medicare and Medicaid Promoting Interoperability Programs, CMS proposes a new scoring methodology. This scoring methodology will be based on a weighted-average score for each measure, with a maximum total score of 100. Hospitals scoring more than 50 points will have met the requirements of the program, thereby avoiding a payment penalty.

In calendar year (CY) 2019, CMS proposes to require that hospitals use the 2015 version of certified EHR technology. CMS will allow hospitals to use a 90-day reporting period in CYs 2019 and 2020 to allow for the transition to new measures and a new scoring methodology.

CMS proposes that hospitals report four self-selected clinical quality measures (CQMs) for one calendar quarter in both the Promoting Interoperability Program and the Inpatient Quality Reporting (IQR) Program in 2019.

In addition, CMS included a separate request for information from stakeholders on the use of Medicare and Medicaid conditions of participation to further advance the electronic exchange of information and support effective transitions of care between hospitals and community providers.

Meaningful Measures Initiative

The proposed rule incorporates the Meaningful Measures Initiative, launched by CMS last year, to identify high-priority areas for quality measurement and improvement. This new approach to quality measures is not intended to replace any existing program, but rather to increase measure alignment across CMS programs and reduce provider reporting burden.

Quality Programs

Meanwhile, in relation to the quality programs, the proposed rule:

  • gradually removes 39 measures from the IQR program, beginning with the CY 2018 reporting period;
  • removes 10 measures in the value-based purchasing (VBP); and
  • retains measures in the Hospital Acquired Conditions (HAC) Reduction program.

Transparency

CMS proposes that hospitals annually post their standard charges online. Hospitals currently are required to publicly release their charge information, but CMS’ proposal would require that this data be available online. CMS also seeks comment on specific questions related to price transparency and the sharing of cost and charge data with patients.

America’s Essential Hospitals is analyzing the proposed rule for comment and will send members a detailed Action Update shortly. CMS is accepting comments on the proposed rule until June 25.

Contact Senior Director of Policy Erin O’Malley at eomalley@essentialhospitals.org or 202.585.0127 with questions.

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About the Author

Maryellen Guinan is a senior policy analyst at America's Essential Hospitals.