Final Rule Released for FY 2018 Medicare Inpatient Payments

Posted on August 03, 2017

On Aug. 2, the Centers for Medicare & Medicaid Services (CMS) released a final rule to update the hospital inpatient prospective payment system for fiscal year (FY) 2018, which begins Oct. 1, 2017. Provisions of the final rule include:

  • Increasing rates by a net 1.1 percent, comprised of an initial marketbasket of 2.7 percent, less 0.6 percentage points for productivity, 0.75 percentage points mandated by the Affordable Care Act, and 0.6 percent points to remove the one-time temporary adjustment made in FY 2017 to restore the two-midnight policy cuts and budget-neutrality adjustments. In addition, the CMS finalized an increase of 0.46 percentage points to partially restore cuts made as a result of the American Taxpayer Relief Act of 2012 and budget-neutrality adjustments.
  • Finalizing the proposal to use data from the CMS National Health Expenditures Account rather than the Congressional Budget Office for calculating the uninsured rate. This change would increase overall Medicare disproportionate share hospital payments by approximately $800 million nationally.
  • A three-year phase-in beginning in FY 2018 to use data reported on hospital cost report worksheet S-10 for determining the amounts and distribution of uncompensated care payments. In response to concerns voiced by healthcare providers, the CMS indicated that it will continue to work with stakeholders to address issues related to the accuracy and consistency of the S-10 data through provider education and refinement of the worksheet instructions. The CMS has developed a process for auditing the S-10 data and will provide instructions to the Medicare Administrative Contractors (MACs) as soon as possible. Cost reports for FY 2017 are expected to be the first that are subject to a desk review. In addition, as the MHA recently reported, the CMS is providing an opportunity for hospitals to resubmit Worksheet S-10 data to their MAC by Sept. 30.
  • Modifying the electronic health record reporting period for FY 2018 for new and returning participants that attest to the CMS or their state Medicaid agency. The reporting period was changed from the full year to a minimum of any continuous 90-day period during the calendar year.
  • Finalization of the socioeconomic adjustment approach mandated by the 21st Century Cures Act for the FY 2019 hospital readmissions reduction program. The CMS will assess readmission penalties based on a hospital’s performance relative to other hospitals that have similar proportions of patients who are dually eligible for Medicare and Medicaid.
  • Reducing the number of electronic clinical quality measures (eCQMs) that hospitals must report, with a shorter data reporting period for the inpatient quality reporting program. Hospitals will be required to report on at least four self-selected eCQMs for a reporting period of one self-selected quarter of eCQM data in calendar year 2017.
  • Updating the measures and scoring approach for the hospital value-based purchasing program, the hospital-acquired conditions reporting program, and the quality reporting programs for inpatient psychiatric hospitals.

Featured in the Monday Report. Click to view the full edition.In response to comments received from the MHA, the American Hospital Association and others, the CMS did not finalize its proposal to require accrediting organizations to post survey reports and acceptable corrective actions on their website. The MHA continues to analyze the final rule and will provide additional information, including hospital-specific impact reports, in the near future.  Members with questions should contact Vickie Kunz at the MHA.

Tags: Medicare, 2018 IPPS, CMS, final rule

Posted in: Member News

MHA Updates Delivered to You

Subscribe to the MHA Monday Report weekly newsletter or our podcast, the MiCare Champion Cast, to keep informed about the latest healthcare news and events in Michigan.

MHA Monday Report
Contact us to subscribe

MiCare Champion Cast
iTunes | SoundCloud

Media Inquiries

Contact the MHA at
(517) 703-8601

Read the MHA policy on publication via MHA media.

MHA 100 Year Anniversary

Watch the video »