The Centers for Medicare & Medicaid Services (CMS) recently issued its proposed rule updating fiscal year (FY) 2018 payment policies and rates under the Medicare inpatient prospective payment system (IPPS). As highlighted below, the proposed rule aims to reduce regulatory burdens for providers and to promote transparency and flexibility in the delivery of care. Comments on the proposed rule are due June 13, 2017. Once finalized, the updated IPPS will apply to all discharges on or after October 1, 2017.
Update to Prospective Payment Rate and Uncompensated Care Payments
Overall, CMS estimates the proposed rule will increase IPPS operating payments by approximately 1.7 percent in FY 2018. CMS also proposed changes to uncompensated care payments resulting in an additional 1.2 percent increase. The agency plans to distribute close to $7 billion in uncompensated care payments, a $1 billion increase from the previous year. This increase results from CMS’s proposal to change its data source for calculating the uninsured rate, by utilizing its National Health Expenditures Account (NHEA) data as opposed to the Congressional Budget Office data. Agency officials believe the NHEA is a more complete data source and estimate that this change will reflect a decrease in the uninsured rate.
Quality Reporting and Incentive Programs
Even as CMS ramps up the Quality Payment Program and initiatives under the Medicare Access and CHIP Reauthorization Act (MACRA), the agency continues using the IPPS rule to introduce new proposals for its legacy quality programs. Most notably, as part of ensuring overall quality of care and patient health, CMS is requesting comment on how to account for social risk factors such as income, education, race and ethnicity, employment, disability, community resources, and social support. CMS wants public input on which social factors are most appropriate to consider, how to statistically account for them and how to operationalize a strategy to include these measures in various programs. Continue Reading