That spring ritual of updating Medicare payment rates to providers has begun. In the last several weeks, CMS has sent to the White House for approval the following payment updates:
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Acute Care Inpatient Hospitals
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Long Term Care Hospitals
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Inpatient Rehabilitation Facilities
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Skilled Nursing Facilities
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Hospice Agencies
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Outpatient Dialysis Facilities
As we mentioned a few weeks ago, the payment updates for the post-acute areas of SNFs, IRFs, LTCHs and Hospice are subject to a congressionally mandated 1 percent. That leaves the payment rules for acute care inpatient hospitals and end stage renal disease more or less subject to the standard payment update procedure.
Inpatient Acute Care Hospitals.
As far as Medicare payments go, inpatient acute care hospitals are coming out of the woods. The $11 billion in documentation and coding adjustment mandated by Congress will sunset in FY 2017. In FY 2018, a 0.5 percent increase mandated by MACRA becomes effective bringing to an end the sub-1 percent annual Medicare updates for inpatient hospitals.
Outpatient Dialysis Treatment.
Curiously, CMS has sent to the White House the CY 2018 ESRD annual update early this year. This payment rule usually does not appear until early summer. The implication of this early start is that CMS will have to rely on the Q4 2016 forecast for the MFP and market basket updates instead of the Q1 2017. The difference is probably not material but it is a different schedule than we are used to.
For all payment rules, the more interesting aspect will be policy inquiries. In the Medicare Advantage call letter issued last week, CMS included an RFI for ideas to improve the program including requests for ideas on benefit design, operational or network composition flexibility, support for doctor-patient relationship in care delivery and facilitation of individual preferences. The MA RFI follows two letters to America's Governors asking them to submit Medicaid payment and delivery innovations via Section 1332 and Section 1115 waivers.
The posture of the administration is one of openness and collaboration with various health care constituencies as a way of distinguishing themselves from the previous administration whose regulatory initiatives often left the health care industry scratching its head. The rule making season that typically begins this month, will provide ample opportunity to the Trump administration to roll back regulations and implement new policies.
In other words, the headline numbers for payment adjustments probably won’t be as interesting as the policy initiatives/inquiries/trial balloons.
Call with questions. We always here reading the fine print so you don’t have to.
Emily Evans
Managing Director
Health Policy
@HedgeyeEEvans
