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CHA DataSuite Releases Inpatient and Long-Term Care Hospital Prospective Payment Systems FFY 2021 Final Rule Impact Analyses

For CFOs, reimbursement directors

CHA DataSuite has released hospital-specific analyses of the federal fiscal year (FFY) 2021 Medicare inpatient prospective payment system (IPPS) final rule and the long-term care hospital (LTCH) prospective payment system final rule.  

IPPS Final Rule Analysis

The IPPS final rule analysis is intended to show how Medicare inpatient fee-for-service payments would change from FFY 2020 to FFY 2021 based on the policies set forth in the FFY 2021 IPPS final rule. The IPPS final rule summary can be found here.  

The analysis compares the year-to-year change in operating, capital, and uncompensated care IPPS payments and includes breakout sections and worksheets that provide detailed insight into specific policies that influence IPPS payment changes, including: 

  • A rate increase (0.5%) for the Coding Offset adjustment 
  • Changes to core-based statistical area delineations 
  • Updates to the Medicare disproportionate share hospital (DSH) payment policies, including hospitals that will be eligible for DSH payments in FFY 2021 based on audited FFY 2017 S-10 data 
  • Requiring hospitals to report the median payer-specific negotiated rates for inpatient services, by Medicare severity-diagnosis related group (MS-DRG), for Medicare Advantage organizations on the Medicare cost report  
  • Creating a new MS-DRG for CAR-T therapy 
  • Updates to the program rules for the Value-Based Purchasing, Readmission Reduction, and Hospital-Acquired Condition programs 
  • Updates to the payment penalties for non-compliance with the Hospital Inpatient Quality Reporting and Electronic Health Record Incentive programs 

For more information see the analysis description

LTCH PPS Final Rule Analysis

The LTCH PPS final rule analysis is intended to show how Medicare LTCH fee-for-service payments would change from FFY 2020 to FFY 2021 based on the policies set forth in the FFY 2021 LTCH final rule. The LTCH PPS final rule summary can be found here.  

The impact of site-neutral payments for certain cases has been incorporated into this analysis. Site-neutral cases have been paid a 50/50 blend of the site-neutral rate and LTCH payment rate since FFY 2016; the blend ended in FFY 2020. 

Beginning in FFY 2021, the Bipartisan Budget Act mandates an inpatient PPS equivalent payment rate for all discharges for LTCHs with fewer than 50% of their cases eligible for LTCH standard payment. This percentage and estimated impact if LTCH fails to meet the threshold is displayed where applicable. 

For more information see the analysis description