Prospective Payment System

CMS Issues FFY 2020 Long Term Care Hospital PPS Final Rule

The Centers for Medicare & Medicaid Services (CMS) has issued the final rule for the long-term care hospital (LTCH) prospective payment system (PPS) for federal fiscal year (FFY) 2020. The provisions of the final rule will be effective Oct. 1, 2020.  

Below are highlights of the final rule.  

Payment Impact
As provided in the FFY 2016 final rule, LTCHs are reimbursed under a dual-rate system; patients who meet specified criteria are reimbursed by the LTCH PPS standard federal payment amount and remaining patients are reimbursed at the lower site-neutral payment rate. Implementation of the dual-rate payment system included a transition period during which facilities received a blended rate.  For cost reporting periods beginning in FFY 2020, the transition period will end and LTCHs will be paid exclusively on the site-neutral payment rate for patients who do not meet LTCH PPS criteria.   

Overall, CMS projects that LTCH PPS payments will increase by approximately 1%, or $43 million. For cases reimbursed at the site-neutral rate, CMS projects a decrease of approximately 5.9%.  

Quality Reporting/SPADEs
CMS finalizes several proposals relating to the LTCH Quality Reporting Program (QRP), including the addition of several standardized patient assessment data elements (SPADEs), several of which address social determinants of health. CMS also finalizes two new measures addressing transfer of health information and changes the existing “Discharge to Community” measure to exclude baseline nursing home residents. 

CMS Issues FFY 2020 Inpatient Psychiatric Facility PPS Final Rule

The Centers for Medicare & Medicaid Services (CMS) released its final rule for the federal fiscal year (FFY) 2020 inpatient psychiatric facility (IPF) prospective payment system (PPS).

CMS finalized a 2.9% market basket update, offset by reductions including a productivity adjustment of 0.4% and an Affordable Care Act-mandated 0.75% reduction, resulting in a payment increase of approximately 1.75%. After accounting for a $10 million decrease as a result of an update to the outlier threshold, CMS estimates overall payments will increase by $65 million compared to FFY 2019. CMS also finalized its proposals to revise and rebase the market basket to reflect a 2016 base year rather than a 2012 base year, and remove the one-year lag in wage index data used under the IPF PPS. As a result, CMS will apply the FFY 2020 pre-floor, pre-reclassified inpatient prospective payment system wage index data. 

For the IPF Quality Reporting Program, CMS finalized the adoption of one new measure — Medication Continuation Following Inpatient Psychiatric Discharge (National Quality Forum #3205) — beginning with the FFY 2021 payment determination and subsequent years.

The proposed rule is effective Oct. 1. Additional information is available in a CMS fact sheet.

CMS Issues FFY 2020 Skilled-Nursing Facility PPS Final Rule

The Centers for Medicare & Medicaid Services (CMS) has issued the federal fiscal year (FFY) 2020 final rule for the skilled-nursing facility prospective payment system (SNF PPS). The provisions in the proposed rules will be effective Oct. 1, 2020.

Highlights of the final rule include:  

CMS Issues FFY 2020 IPPS Final Rule

The Centers for Medicare & Medicaid Services (CMS) released its federal fiscal year (FFY) 2020 inpatient prospective payment system (IPPS) final rule.  

Key highlights of the proposed rule include:

Area Wage Index: CMS finalized – with modification – its proposal to make changes to the area wage index. The final rule: 

Increase wage index values for low-wage hospitals in the bottom 25th percentile.
Cut the base payment for all IPPS hospitals, as opposed to the initial proposal to reduce wage index values for the hospitals in the highest 25th percentile. 
Cap any decrease in a hospital’s wage index at 5% in FFY 2020 compared to FFY 2019. 
Exclude wage index data from urban hospitals that reclassify as rural when calculating each state’s rural floor.
Include wage data from the eight California hospitals that were deleted from the proposed rule calculation.

Medicare DSH Payments: Despite CHA’s continued concerns with the reliability and validity of data reported on Worksheet S-10 and a request for a blended approach, CMS finalized its proposal to use a single year of uncompensated care data from Worksheet S-10 to determine the distribution of disproportionate share hospital (DSH) uncompensated care payments for FFY 2020. Specifically, the agency will use S-10 data from the FFY 2015 audited cost report.
Comprehensive CC/MCC Analysis: In response to comments from CHA and other stakeholders, CMS generally did not finalize proposed changes to severity level designations. CMS agreed with commenters that changes based on its comprehensive analysis were premature, and will conduct additional analysis and provide publicly available information — such as a test GROUPER — to allow for impact testing,
New Technology Add-on Payments: CMS finalized its proposal to increase the new technology add-on payment (NTAP) from 50% to 65% of the marginal cost of the case, capped at 65% of the cost of the technology. CMS is also increasing the add-on payment to 75% for certain antimicrobials.
Annual Payment Update: For FFY 2020, CMS will increase payment rates by 3.1% compared to FFY 2019. The update includes an initial market basket update of 3.1%, minus 0.4% for productivity and plus 0.5& 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 final rule, total IPPS payments will increase by 3%, or approximately $3.8 billion.
Quality Reporting Programs: CMS finalized a number of changes to hospital quality reporting programs, including two new measures for the Inpatient Quality Reporting Program. For the FFY 2023 payment period, CMS adopts one new opioid-related electronic clinical quality measures (eCQM), “Safe Use of Opioids – Concurrent Prescribing.” Beginning with the FFY 2024 payment period, all hospitals will be required to report this eCQM and choose three additional eCQMs. CMS did not finalize adoption of its proposed “Hospital Harm – Opioid Related Adverse Events” eCQM. Beginning with the FFY 2026 reporting period, CMS will require hospitals to report the currently voluntary “Hybrid Hospital-Wide All-Cause Readmissions” measure, following two additional voluntary reporting periods. CMS also finalized policies for the Hospital Readmissions Reduction Program, Hospital-Acquired Conditions Reduction Program, or the Hospital Value-Based Purchasing Program.
Promoting Interoperability Program: CMS finalized 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 will allow optional reporting of the “Query of Prescription Drug Monitoring Program” measure for the 2020 reporting period. CMS also finalized its proposal to remove the “Verify Opioid Treatment Agreement” measure beginning in 2020, in response to comments from CHA and other stakeholders about significant implementation challenges. CMS finalized proposals to align eCQM reporting requirements with the hospital inpatient quality reporting program. 

CHA is currently analyzing the final rule and will provide members with a more detailed summary in the coming weeks. Additional information is available in a CMS fact sheet.

On August 16, CHA will host a complimentary members-only briefing from 10-11 a.m. (PT) to update members on the finalized area wage index proposal and next steps. Register here. 

CMS Issues FFY 2020 Inpatient Rehabilitation Facility PPS Final Rule

The Centers for Medicare & Medicaid Services (CMS) has issued the final rule for the inpatient rehabilitation facility prospective payment system (IRF PPS) for federal fiscal year (FFY) 2020. The provisions will be effective Oct. 1, 2020. According to CMS, this final rule represents continued movement toward the eventual transition to a unified post-acute care (PAC) PPS. 

Below are highlights of the final rule.  

Payment Impact
As provided in the FFY 2019 final rule, CMS will reform the current IRF patient assessment and case-mix  process by discontinuing the use of the functional independence measure (FIM), and instead incorporating similar data elements contained in Section GG of the IRF patient assessment instrument (IRF-PAI) for the purpose of assigning patients to a payment category, or case-mix group (CMG).  Notably, in response to comments, CMS opts not to adopt a weighted motor score for CMG calculation.  

The final rule updates the CMG relative weights and average length of stay values, and uses concurrent inpatient prospective payment system (IPPS) wage index data to align wage index data across settings of care.  Overall, CMS projects that payments to IRFs will increase by 2.5%, or $210 million, as compared to FFY 2019, the result of a 2.9% market basket update, offset by statutorily mandated 0.4% cut for productivity. 

Quality Reporting/SPADEs
CMS finalizes several proposals relating to the IRF Quality Reporting Program (QRP), including the addition of several standardized patient assessment data elements (SPADEs), several of which address social determinants of health. CMS also finalizes two new measures on transfer of health information, as well as a change to the existing “Discharge to Community” measure to exclude baseline nursing home residents. In response to comments, CMS does not finalize its proposal to collect IRF QRP data on all patients regardless of payer source. 

CMS Issues CY 2020 OPPS Proposed Rule

The Centers for Medicare & Medicaid Services (CMS) has issued its calendar year (CY) 2020 outpatient prospective payment system (OPPS) proposed rule, including significant proposals related to price transparency and changes to the hospital area wage index (AWI). Specifically, CMS would carry over hospital AWI policies proposed under the federal fiscal year 2020 inpatient PPS (IPPS) proposed rule, applying the finalized inpatient policies to outpatient payments.