Summary
Extends the MDH program through FY12 and requires CMS to study whether certain urban hospitals should qualify.
Implementation Status
This provision was extended to September 30, 2013, by section 606 of the American Taxpayer Relief Act of 2012 (ATRA).
On August 2, 2013, CMS issued its FY 2014 Medicare Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital (LTCH) PPS final rule under which gross hospital payments will be $1.2 billion higher in FY 2014 than they were in FY 2013 – much higher than the $27 million increase initially proposed. The final rule addresses a number of IPPS and LTCH payment and quality-related provisions authorized or amended by the ACA.
On March 18, 2014, CMS issued an interim final rule with comment effectuating changes to the Medicare inpatient hospital payment adjustment for low-volume hospitals and extends the MDH program for FY 2014 pursuant to sections 1105 and 1106, respectively, of P.L. 113-67, the Pathway for SGR Reform Act of 2013, which was incorporated into the broader budget agreement that was signed into law in December 2013. Comments on the interim final rule are due by 5pm on May 13. As per the CMS interim final rule (and the underlying statutory extension), P.L. 113-67 extends the payment adjustment for low-volume hospitals and the MDH program for 6 months, through March 31, 2014. P.L. 113-93, the Protecting Access to Medicare Act of 2014 (i.e., the “doc fix”), which was signed into law on April 1, contains a provision at section 106 of the law that extends the MDH program for an additional 12 months, taking the program through April 1, 2015.
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 June 17, CMS issued a notice codifying the recent one-year statutory extension – through March 31, 2015 – of the payment adjustment for low-volume hospitals and to the MDH program for the second half of FY 2014 (April 1, 2014 through September 30, 2014). This statutory extension of the program, pursuant to the latest ‘doc fix’ legislation (P.L. 113-93), is effectuated through the notice; however, CMS notes that the changes applicable to the first half of FY 2015 (October 1, 2014 through March 31, 2015) were separately put forward in the agency’s FY 2015 IPPS/LTCH PPS proposed rule, which was issued in late April (see 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 and policy 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.
2017
On April 27, CMS released its proposal to revise the Medicare IPPS/LTCH PPS for FY 2018. This provision of the ACA is addressed in the rule.
On Aug. 3, CMS finalized a rule to revise the Medicare hospital inpatient prospective payment system (IPPS) and the Long-Term Care Hospital (LTCH) Prospective Payment System for FY 2018. This provision of the ACA is addressed in the rule.
Statutory Text
SEC. 3124. EXTENSION OF THE MEDICARE-DEPENDENT HOSPITAL (MDH) PROGRAM. (a) EXTENSION OF PAYMENT METHODOLOGY.—Section 1886(d)(5)(G) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(G)) is amended—October 1, 2012’’; and (2) in clause (ii)(II), by striking ‘‘October 1, 2011’’ and inserting ‘‘October 1, 2012’’. (b) CONFORMING AMENDMENTS.— (1) EXTENSION OF TARGET AMOUNT.—Section 1886(b)(3)(D) of the Social Security Act (42 U.S.C. 1395ww(b)(3)(D)) is amended— (1) in clause (i), by striking ‘‘October 1, 2011’’ and inserting ‘‘October 1, 2012’’; and (2) in clause (ii)(II), by striking ‘‘October 1, 2011’’ and inserting ‘‘October 1, 2012’’. (b) CONFORMING AMENDMENTS.— (1) EXTENSION OF TARGET AMOUNT.—Section 1886(b)(3)(D) of the Social Security Act (42 U.S.C. 1395ww(b)(3)(D)) is amended— (A) in the matter preceding clause (i), by striking ‘‘October 1, 2011’’ and inserting ‘‘October 1, 2012’’; and (B) in clause (iv), by striking ‘‘through fiscal year 2011’’ and inserting ‘‘through fiscal year 2012’’. (2) PERMITTING HOSPITALS TO DECLINE RECLASSIFICA- TION.—Section 13501(e)(2) of the Omnibus Budget Reconciliation Act of 1993 (42 U.S.C. 1395ww note) is amended by striking ‘‘through fiscal year 2011’’ and inserting ‘‘through fiscal year 2012’’.