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Association Comments on 2018 Medicare Inpatient Payment Proposals

In a June 13 letter to the Centers for Medicare & Medicaid Services (CMS), America’s Essential Hospitals responded to the proposed annual update of the Hospital Inpatient Prospective Payment System.

The proposed rule would increase payment rates for fiscal year 2018 by 1.6 percent, revise the Medicare disproportionate share hospital (DSH) payment methodology, and implement a transitional methodology for calculating penalties in the Hospital Readmissions Reduction Program (HRRP).

In its comments, America’s Essential Hospitals recommended that CMS:

  • use data for the Medicare DSH methodology that represents the full range of uncompensated care costs;
  • ensure both quality and transparency by exploring ways to account for social risk factors in Medicare programs and reduce administrative burden;
  • refine risk-adjustment methodology in the HRRP to mitigate unintended consequences, particularly for essential hospitals;
  • provide flexibility on electronic reporting and reduce burden on providers in the Medicare and Medicaid Electronic Health Records Incentive Programs;
  • ensure that the Inpatient Quality Reporting Program measure set provides an accurate representation of quality of care;
  • include measures in the Hospital Value-Based Purchasing Program that improve patient outcomes, are not redundant, and incorporate adjustment for social risk factors;
  • continue to examine the methodology for risk-adjustment within the Hospital-Acquired Condition Reduction Program; and
  • continue to seek feedback on ways to reduce regulatory burdens.

Contact Director of Policy Erin O’Malley at or 202.585.0127 with questions.


About the Author

Rachel Schwartz is a former policy associate at America's Essential Hospitals.

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