CMS Proposes New Rule to Ease Regulatory Burden on Providers

Agency aims to revise payment systems

The Centers for Medicare and Medicaid Services has issued a proposed rule that would adjust the 2018 Medicare payment policies for patient hospital admissions in an effort to reduce the regulatory burden on providers, according to Fierce Healthcare. If finalized, the rule would affect more than 3,300 acute-care hospitals and approximately 420 long-term care hospitals, with discharges on or after October 1, 2017, affected.

Specifically, the CMS proposes to revise the Medicare hospital inpatient prospective payment systems (IPPS) for operating and capital-related costs of acute-care hospitals for fiscal year 2018. In addition, the agency proposes to update the payment policies and the annual payment rates for the Medicare prospective payment system (PPS) for inpatient hospital services provided by long-term care hospitals.

The CMS projects that, because of a combination of payment adjustments and rate increases, acute-care hospitals would see a 2.9% increase in inpatient operating payments for fiscal year 2018 under the proposed rule. Payments to long-term care hospitals would likely decrease by approximately 3.8% under the proposal.

Moreover, the CMS aims to:

  • Establish new requirements or revise existing requirements for quality reporting by specific providers (e.g., acute-care hospitals and inpatient psychiatric facilities) that are participating in Medicare.
  • Establish new requirements or revise existing requirements for eligible professionals, eligible hospitals, and critical-access hospitals participating in the Medicare and Medicaid EHR [Electronic Health Records] Incentive Programs.
  • Update policies related to the Hospital Value-Based Purchasing (VBP) Program, the Hospital Readmissions Reduction Program, and the Hospital-Acquired Condition (HAC) Reduction Program.
  • Institute changes related to the transparency of accrediting-organization survey reports.

Under the new proposal, if hospitals treat a high percentage of certain low-income patients, they would receive a percentage add-on payment applied to the diagnosis-related group (DRG)-adjusted base payment rate. This add-on payment, known as the disproportionate share hospital (DSH) adjustment, would provide a percentage increase in Medicare payments to hospitals that qualify under either of two statutory formulas designed to identify hospitals that serve a disproportionate share of low-income patients.

In a statement, CMS administrator Seema Verma said: “Through this proposed rule we want to reduce burdens for hospitals so they can focus on providing high-quality care for patients. Medicare is better able to support the work of dedicated hospitals and clinicians who provide the care that people need with these more-flexible and simplified approaches.”

Sources: Federal Register; April 2017; Fierce Healthcare; April 17, 2017; and CMS; April 14, 2017.