- Inpatient hospitals will see an increase of $2.4 billion in payments for FY2018, less than the previously proposed $3 billion but far more than the $726 million increase in FY2017, according to the final rule for the Medicare Inpatient Prospective Payment System the CMS released Wednesday.
- The rule also indicated the agency is moving forward with a controversial new formula for calculating uncompensated care payments. It uses information from Medicare Cost Reports, or Worksheet S-10. The FY2018 Disproportionate Share Hospital (DSH) payments will be $6.8 billion, an increase of about $800 million from the FY2017 amount.
- CMS is projecting long-term care hospital prospective payment system payments will decrease by about 2.4%, or $11 million, next year. In that final rule, the agency states this is “due largely in part of the continued phase in of the dual payment rate system.”
The massive rule that dropped late Wednesday also includes relaxed EHR requirements, continued delay of a rule that restricts admissions at long-term care hospitals and a change to the assessment of readmission penalties. It's a mixed bag for hospitals hoping to escape certain regulations next year.
The American Hospital Association (AHA) praised parts of the rules, but expressed disappointment in the change to calculating uncompensated care payments.
"We had urged the agency to delay its [S-10] use in calculating DSH payments by one year to further educate hospitals about how to accurately and consistently complete the S-10, and also implement a stop-loss policy and audit process," AHA Executive Vice President Tom Nickels said in a statement.
AHA has maintained the S-10 is confusing to complete, and the CMS needs more time to "address issues related to the accuracy and consistency" of the data. Some hospital executives support the new formula, which is intended to be more equitable.
In response to continued concerns that hospitals are not prepared for EHR requirements, the CMS will continue to allow providers to use certified 2014 Edition EHRs next year, instead of ending that exemption as earlier planned. The rule also changes the reporting period for new and returning participants to any continuous 90-day period in the calendar year, instead of a full year. The AHA said it appreciates those changes.
AHA said it is also pleased with the moratorium on the 25% rule, which limits the number of patient admission referrals to a long-term care hospital from any single acute care hospital. Long-term care hospitals say the rule is financially harmful and prohibits patients from receiving needed care.
The change to readmission penalties will base hospital performance relative to other hospitals with a similar amount of number of dual eligible patients. This helps account for socioeconomic differences in the patient base for various hospitals. The Medicare Hospital Readmission Reduction Program has achieved results, and is certainly noticed by hospitals. More than half of all U.S. hospitals were penalized in 2015, with a record high of $528 million withheld.