CMS Issues Final 2019 IPPS Rule

August 07, 2018

The Centers for Medicare & Medicaid Services (CMS) issued its final 2019 Inpatient Prospective Payment System (IPPS) rule on August 2. Overall, the rule will increase hospital payments by about 1.35% or around $4.8 billion in FY2019. This reflects a market basket update of 2.9%, a 0.8% productivity reduction, a 0.75% reduction required by the Affordable Care Act, and a 0.5% increase to restore cuts made in the American Taxpayer Relief Act of 2012 relating to documentation and coding changes.

WHA will analyze the final rule in the coming weeks and will hold a webinar for interested members, so stay tuned for more information. In the meantime, an overview of some of the main provisions are below and CMS has a factsheet and text of the final rule on its website.

  • Electronic Health Records (EHR) – renames the EHR Incentive Program as the Medicare and Medicaid Promoting Interoperability Programs. The new program will have a 90-day reporting period beginning in 2019, with fewer objectives that will be more targeted to streamline the program. This will include finalizing two new e-prescribing measures for opioids and Schedule II controlled substances.
  • Reducing and Deduplicating Quality Measures – finalizes the removal of 18 measures from the inpatient quality reporting program that are no longer relevant or where the cost of reporting the measures outweighs their value. It also removes redundancy of 21 inpatient quality reporting (IQR) measures. However, CMS did not finalize its proposal to remove the safety measure domain from hospital value-based purchasing programs.
  • Boosting Payments for Medical Innovations – contains an increase for new technology add-on payments for chimeric antigen receptor t-cell (CART) therapies, as well as 9 of the other 11 applications discussed in the proposed rule.
  • Updating Price Transparency Guidance – requires hospitals to publicly post their charges in machinereadable format, and update them at least annually, or more often as appropriate. CMS is holding off on additional price transparency initiatives, such as issues related to surprise billing issues commonly associated with out-of-network radiologists and anesthesiologists, until it receives additional feedback. Note: WHA is analyzing these guidelines to determine if updates are needed in the WHA PricePoint platform which helps hospitals provide standard online charges in a consumer-friendly format.
  • Long-Term Care Hospital (LTCH) Changes – updates the LTCH PPS standard federal payment rate by 1.35%, which CMS projects will increase LTCH PPS payments by approximately 0.9%, or $39 million in FY 2019. The rule also finalizes CMS’ proposal to eliminate the 25% threshold policy, which limited the share of an LTCH’s cases that could be admitted from certain referring acute care hospitals.

One other area of interest to WHA members is related to the Medicare area wage index. CMS notes it has begun the process of making geographic payments more equitable for rural hospitals to the extent permitted under current law by finalizing its proposal to allow the imputed wage index floor to expire for all-urban states (MA, NJ, RI). CMS says it looks forward to continuing work on geographic payment disparities.

This story originally appeared in the August 07, 2018 edition of WHA Newsletter