ACA Now

Implementation Status

This provision was implemented by the FY11 Hospital Inpatient Prospective Payment System Final Rule.

On May 1, CMS issued a proposed rule updating FY 2015 Medicare payment policies and rates for inpatient stays at general acute care and LTCHs. Under the proposed rule, hospitals that participate in the Hospital Inpatient Quality Reporting (IQR) Program and are ‘meaningful users’ of EHRs would receive a 1.3% payment update. However, the 1.3% rate increase, when coupled with the payment policy reductions – including those under the Hospital Readmissions Reduction Program, the Hospital Acquired Condition (HAC) Reduction Program, Medicare DSH changes as well as “the expiration of certain statutory provisions that provided special temporary increases in payments to hospitals and other proposed changes” – would ultimately decrease IPPS operating payments by approximately 0.8% or $241 million over FY 2015 payment levels. Also of note, gross LTCH payments under the proposed rule would increase by 0.8% or $44 million over FY 2014 payments, with a delay (pursuant to the statutory mandate) in the full application of the 25% Rule patient threshold, among other key LTCH policy changes denoted further below. Comments are due by June 30, 2014. CMS fact sheets are available here and here. A CMS press release is available here.

On August 4, CMS issued a final rule updating FY 2015 Medicare payment policies and rates for inpatient stays at general acute care and LTCHs. The final rule also codifies “two interim final rules with comment period relating to criteria for disproportionate share hospital [DSH] uncompensated care payments and extensions of temporary changes to the payment adjustment for low-volume hospitals and of the Medicare-Dependent, Small Rural Hospital (MDH) Program.”

Under the final rule, hospitals that participate in the Hospital Inpatient Quality Reporting Program and are ‘meaningful users’ of EHRs would receive a 1.4% payment update – up slightly from the agency’s 1.3% proposed increased. However, the 1.4% rate increase, when coupled with payment policy reductions enumerated further below – including reductions under the Hospital Readmissions Reduction Program, changes to Medicare DSH payments, and so forth – are projected to decrease IPPS operating payments by approximately 0.6%” (compared to the net decrease of 0.8% under the proposed rule) – or by roughly $756 million in FY 2015.

CMS also finalized its proposal to continue its slow phase-in of the ATRA’s coding intensity adjustment, leaving ~$8 billion to be recouped in FYs ‘15 and ‘16.

Gross LTCH payments under the final rule would increase by 1.1%  – up from the 0.8% CMS put forward in its proposed rule, with a delay (pursuant to the statutory mandate) in the full application of the 25% Rule patient threshold, among other key LTCH policy changes denoted further below.

CMS fact sheets are available here and here.  An agency press release is available here.

On July 31, CMS released the FY 16 inpatient prospective payment system (IPPS) and long-term care hospital PPS final rule affecting discharges beginning on Oct. 1, 2015.  The rule also includes an embedded interim final rule with comment period effectuating the statutory extension of the Medicare-dependent, small rural hospital Program and changes to the low-volume payment adjustment. The rule addressed this provision of the ACA.

2016

On Apr. 19, CMS released the FY 2017 inpatient prospective payment system (IPPS) and long-term care hospital PPS and policy proposed rule that, once, finalized, will apply to discharges beginning on or after Oct. 1, 2016. Under the rule, CMS estimates a net average payment increase of 0.7 percent (a roughly $539 million increase in spending, including capital) in FY 2017 for the IPPS. For LTCH’s, and stemming largely from the application of statutory site-neutrality provisions in the Pathway for SGR Reform Act, CMS estimates that FY 2017 payments will decrease by an estimated $355 million or -6.9 percent in FY 2017.

On Aug. 2, CMS released the FY 2017 inpatient prospective payment system (IPPS) and long-term care hospital (LTCH) PPS and policy final rule. The final rule governs FY 2017 payments to approximately 3,330 acute care hospitals and 430 LTCHs through the IPPS and LTCH PPS, respectively, and effectuates key policy changes. Under the rule, net payments to inpatient hospitals will increase by 0.95 percent on average compared with FY 2016. For the IPPS, the rule finalizes the 1.5 percent documentation and coding recoupment cut, as proposed, and delays the proposed incorporation of S-10 data into uncompensated care calculations. LTCH PPS payments will decrease by 7.1 percent under the LTCH PPS amid the ongoing implementation of site neutrality and will increase by 0.7 percent for cases qualifying for the higher standard rate. The aforementioned provisions are addressed in this regulation.

On Nov. 2, CMS released its CY) 2017 Medicare Physician Fee Schedule (MPFS) final rule delineating wide-ranging Medicare Part B payment policies. CMS finalized a fee schedule conversion factor of 35.89 for physicians participating in Medicare Part B. CMS further notes that the policies contained in the rule would improve how Medicare pays for services for patients with multiple chronic conditions and mental and behavioral health issues.