News: FY 2018 IPPS final rule released, reimbursement raised for hospitals

CMS released the fiscal year (FY) 2018 IPPS final rule on Wednesday, August 2, updating Medicare payment and polices for patients discharged from hospitals from October 1, 2017, to September 30, 2018.

Under the new rule, acute care hospitals will see a total increase in Medicare spending on inpatient hospital payments of $2.4 billion in FY 2018, according to Revenue Cycle Advisor. Based in part on the changes included in the final rule, overall payments to long-term care hospitals will decrease by $110 million, CMS said.

The adjusted base payment rate—pegged at 1.2%—has five elements, according to the fact sheet:

• Market basket update,  plus 2.7%
• Productivity update, minus 0.6%
• Removal of a one-time adjustment made in FY 2017 to compensate hospitals for implementation of the 2-midnight rule for hospital-admission status,  minus 0.6%
• 21st Century Cures Act adjustment, plus 0.4588%
• Patient Protection and Affordable Care Act, minus 0.75%

Though the base reimbursement for inpatient acute care facilities will rise with the final rule, the American Hospital Association (AHA) still expressed apprehension regarding other aspects of the rule.

"We continue to have concerns over the accuracy and consistency of the 'Worksheet S-10' data that CMS will use to determine the cost of treating uninsured patients,” said AHA Executive Vice President Tom Nickels in the AHA statement. “We are also disappointed that CMS has decided not to restore last year's excess cut to reimbursement rates for hospital services. While a reduction to the hospital update factor was mandated by law in 2012, CMS ignored Congress' intent by imposing a cut that was nearly two times what Congress specified."

CMS also modified the EHR reporting periods for hospitals attesting to meaningful use. These reporting periods were changed from a full year to a minimum of any continuous 90-day period during the calendar year for 2018.

Along with the IPPS final rule, CMS also finalized proposals to update the Hospital Value-Based Purchasing Program. CMS proposes to:

• Adopt a payment measure associated with 30-day episodes of care for pneumonia patients for the efficiency and cost reduction domain beginning with the FY 2022 program year
• Update the weighting of measures in the efficiency and cost reduction domain to reflect the addition of the new condition-specific payment measures along with the overall Medicare spending per beneficiary measure beginning with the FY 2021 program year

IPPS final rule is slated for publication in the Federal Register on Monday, August 14.

Editor’s note: To read the complete IPPS final rule, click here. To download the final rule fact sheet, click here. To read ACDIS’ take on the proposed rule from earlier this year, click here. To read the AHA response to the final rule, click here.