CMS Continues Requiring Disclosure of Negotiated Payment Rates in IPPS Rule

May 14, 2020

The Centers for Medicare & Medicaid Services continued its recent trend of asking hospitals to disclose negotiated rates in its proposed FY2021 Inpatient Prospective Payment System Rule introduced on May 11.
Overall, the rule includes an increase of 3.1% for PPS hospitals that report quality and are meaningful users of electronic health records. However, it proposes requiring all hospitals to report the median payer-specific negotiated rates for inpatient services by Medicare Severity – Diagnosis-related Group (MS-DRG) and would apply to all private contracts, including Medicare Advantage. This comes after hospitals have sued CMS (of which WHA is part of an amicus brief) over its proposed 2020 IPPS rule requiring hospitals to disclose privately negotiated rates. CMS seeks comments on using this information to influence MS-DRG relative weights beginning in FY2024, which could impact Medicare fee-for-service payments. Hospitals would be required to include this information on their public Medicare cost reports.
CMS is also continuing its recent trend of trying to bring more fairness to the Medicare Wage Index by proposing increases for low wage index hospitals.
It would also make it easier for displaced medical residents to maintain funding if a residency program shuts down, by allowing the medical resident funding to transfer to a new program as soon as it is announced that the existing program is closing. Current policy requires the program to completely close down before any transfer of funding may occur.
The rule also includes proposed changes in the quality area. Inpatient Quality Reporting proposed changes include incrementally increasing the number of quarters for electronic clinical quality measures (eCQMs) beginning with the CY2021 reporting period, along with publicly reporting CY2021 eCQM data in late 2022. Changes to the methods for calculating the Overall Star Ratings have been postponed to an unknown future rulemaking period.
WHA is continuing to analyze this rule in advance of the July 10 comment deadline. For more information, contact WHA Director of Federal and State Relations Jon Hoelter or Chief Quality Officer Beth Dibbert.

This story originally appeared in the May 14, 2020 edition of WHA Newsletter