On September 2, the Centers for Medicare & Medicaid Services (CMS) issued a final rule for acute care and long-term care hospitals that increases Medicare spending on acute care inpatient hospital services by about $3.5 billion and ties Medicare FFS inpatient hospital pay to MA negotiated rates in FY 2024.
Long-term care facilities, will increase operating and uncompensated care payments for Medicare beneficiaries under the new rule. Through these two payment systems, the agency sets base payment rates prospectively for inpatient stays based on the patient’s diagnosis and severity of illness. The changes, which will affect approximately 3,200 acute care hospitals and 360 long-term care facilities, apply to discharges occurring on or after October 1, 2020.
In another push for hospital transparency, the rule makes hospitals report the median payer-specific negotiated charges negotiated with all of its Medicare Advantage (MA) organizations by MS-DRG for cost reporting periods ending on or after Jan. 1, 2021. CMS will start collecting data next year.
Modern Healthcare explained the agency aims to wean itself off basing reimbursement on the weighted relative cost of services by 2024.
In the new IPPS rule CMS also establishes performance standards for the Hospital Value-Based Purchasing (VBP) Program, and updates policies for the Hospital Readmissions Reduction Program and the Hospital-Acquired Condition (HAC) Reduction Program. The agency estimates it has available about $1.9 billion in value-based incentive payments for FY 2021. Start at page 1,281 of the nearly 2,200 page rule for all the details on the adopted benchmarks.
You may want to start reading, CMS will be implementing the rule less than 60 days after its release, a standard in agency rule making. But, in light of the COVID-19 PHE, and the resulting strain on CMS’s resources, the agency explained, “it was impracticable for CMS to publish this final rule either 30 or 60 days prior to the beginning of the upcoming fiscal year, and CMS has determined that, for good cause, it would be contrary to the public interest to delay the effective date of this final rule for any longer than 28 days.
CMS pays acute care hospitals for inpatient stays under the IPPS. Long-term care hospitals are paid under the LTCH PPS.
Read more from the release from CMS IPPS Home page.
Take a look at the American Hospital Association’s take on the proposed rule for insight
Get the whole rule from the Federal Register