Changes Proposed for FY 2020 Inpatient Prospective Payment System

Posted on April 25, 2019

On April 23, the Centers for Medicare & Medicaid Services (CMS) released the proposed rule to update the Medicare fee-for-service inpatient prospective payment system for fiscal year (FY) 2020. In the coming weeks, the MHA will distribute hospital-specific impact analyses and additional information regarding the proposed rule. Highlights of the proposed rule include:

  • A net 3.1% increase to the standardized operating rate for hospitals that successfully participate in the inpatient quality reporting (IQR) program and use meaningful electronic health records.  
  • A net 0.9% increase to the federal capital rate.  
  • A change to use a single year of data from worksheet S-10 for distributing uncompensated care payments, which comprise 75% of Medicare disproportionate share hospital payments. Specifically, the CMS proposes to use S-10 data from FY 2015 cost reports and seeks comment on whether to use FY 2017 cost reports, which reflect changes in the reporting instructions. Previously, the CMS used an average of three years of data.  
  • Revisions to the wage index methodology that would increase the wage index for hospitals with a wage index value below the 25th percentile. The CMS proposes to maintain budget neutrality by decreasing the wage index for hospitals above the 75th percentile. This proposed policy would be effective for at least four years, beginning in FY 2020. The CMS proposes a 5% cap on decreases in a hospital’s FY 2020 wage index to help mitigate the negative impact of proposed changes.  
  • Changes to the hospital IQR program, including:
    • The removal of the claims-based hospitalwide all-case readmission measure, replacing it with the proposed hybrid hospitalwide all-cause readmission measure.  
    • The adoption of two new opioid-related electronic clinical quality measures (eCQMs), beginning with the calendar year (CY) 2021 reporting period:  
      • Safe use of opioids – concurrent prescribing eCQM.
      • Hospital harm – opioid-related adverse events eCQM
  • An increase in the payment rate for new technology add-on payments, including for chimeric antigen receptor (CAR) T-cell therapies, from 50% to 65%, which would increase the maximum new technology add-on payment from $186,500 to $242,450. 
  • A change in the hospital value-based purchasing program to use the same data used in the hospital acquired conditions reduction program to calculate the National Health Safety Network Healthcare-associated Infection measures, beginning with CY 2020 data collection.
  • An electronic health record reporting period of a minimum of any continuous 90-day period in CY 2021 for new and returning participants in the Medicare Promoting Interoperability Program attesting to the CMS.

The MHA will make its draft comments available prior to the June 24 deadline and encourages hospitals to submit their own comments to the CMS as outlined in the proposed rule. Members with questions should contact Vickie Kunz at the MHA.

Tags: Medicare, proposed rule, 2020 IPPS

Posted in: Member News

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