CHA News Article

CMS Issues FFY 2020 IPPS Proposed Rule
For CEOs, CFOs, Chief Legal Counsel, COOs

The Centers for Medicare & Medicaid Services (CMS) this week released its federal fiscal year (FFY) 2020 inpatient prospective payment system (IPPS) proposed rule. In addition to annual payment updates, including changes to Medicare disproportionate share hospital (DSH) payments, CMS proposes significant changes to the hospital area wage index. CHA believes this proposal inappropriately and unnecessarily punishes states like California with a high cost of living and is analyzing the impact of the proposal to determine an appropriate political and policy response.

Key highlights of the proposed rule include:

  • Area Wage Index: CMS proposes to increase wage index values for low-wage hospitals in the bottom 25th percentile and to reduce wage index values for high-wage hospitals in the top 75th percentile to make the policy budget neutral. CMS proposes the policy would be effective for at least four years, beginning in FFY 2020. In addition, CMS proposes to no longer include wage index data from urban hospitals that reclassify as rural when calculating each state’s rural floor. CMS proposes to phase in its proposal by capping any decrease in a hospital’s wage index to 5 percent in FFY 2020 compared to FFY 2019.
  • Medicare DSH Payments: Despite CHA’s continued concerns with the reliability and validity of data reported on Worksheet S-10, CMS proposes to use a single year of uncompensated care data from Worksheet S-10 to determine the distribution of DSH uncompensated care payments for FFY 2020. Specifically, the agency proposes using S-10 data from the FFY 2015 audited cost report, but also requests comments on an alternative proposal to use FFY 2017 cost report data.
  • New Technology Add-on Payments: CMS proposes to increase the new technology add-on payment (NTAP) from 50 percent to 65 percent of the marginal cost of the case, capped at 65 percent of the cost of the technology. This change would apply to all technologies approved for NTAPs, including Chimeric Antigen Receptor (CAR) T-Cell therapy, which is a cell-based gene therapy that genetically engineers a patient’s own T-cells to attack certain cancerous cells. Specifically, the proposal would increase the maximum NTAP for CAR-T from $186,500 to $242,450 per case.
  • Annual Payment Update: For FFY 2020, CMS proposes to increase payment rates by 3.2 percent compared to FFY 2019. The update includes an initial market-basket update of 3.2 percent, minus 0.5 percent for productivity and plus 0.5 percent to partially restore cuts made as a result of the American Taxpayer Relief Act (ATRA) of 2012. CMS estimates that, after accounting for all policies in the proposed rule, total IPPS payments will increase by 3.7 percent or approximately $4.67 billion.
  • Promoting Interoperability Program: CMS proposes a continuous 90-day reporting period for hospitals and critical access hospitals in the Medicare Promoting Interoperability Program for the calendar year 2021 reporting period. In addition, CMS proposes to allow optional reporting of the “Query of Prescription Drug Monitoring Program” measure for the 2020 reporting period. CMS also proposes to remove the “Verify Opioid Treatment Agreement” measure beginning in 2020, in response to comments from CHA and other stakeholders about significant implementation challenges.
  • Quality Reporting Programs: CMS proposes a number of changes to hospital quality reporting programs, including three new measures for the Inpatient Quality Reporting Program. For the FFY 2023 payment period, CMS would require two new opioid-related electronic clinical quality measures (eCQMs), and beginning with the FFY 2026 reporting period CMS would require hospitals to report the currently voluntary “Hybrid Hospital-Wide All-Cause Readmissions” measure. CMS does not propose any changes to the measure sets for the Hospital Readmissions Reduction Program, Hospital-Acquired Conditions Reduction Program, or the Hospital Value-Based Purchasing Program.

CHA is currently analyzing the proposed rule and will provide members with a more detailed summary in the coming weeks. Additional information is available in a CMS fact sheet. Comments on the proposed rule are due June 24.

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