This afternoon the Trump administration released its first Medicare payment rule. The Inpatient Prospective Payment System annual update called for a 1.75 percent increase in the national standardized amount (consisting of a 2.9 percent market basket increase less 0.40 percent multifactor productivity adjustment and less a 0.75 percent ACA mandated adjustment) plus a 0.46 percent increase mandated by MACRA to offset a reversal of the 0.60 percent one time two midnight rule adjustment in FY 2017.
Total payment adjustments after accounting for other policy adjustment will result in an increase in the national standardized amount paid to hospitals of 1.7 percent.
CMS is also proposing to increase uncompensated care or DSH payments by $1 billion. The increase reflects CMS’s new policy to use data from the National Health Expenditure Accounts at the Office of the Actuary among other things. The $1 billion increase amounts to a 1.2 percent increase in payments to hospitals.
The total estimated increase in Medicare payments to hospitals in FY 2018 is $3 billion.
In an interesting development, CMS is proposing that in the future, distribution of Medicare DSH payments be made based on uncompensated care reported annually on cost reports. This is an idea which has met with stiff resistance in the past due to the variability of data reporting by providers.
The IPPS rule is also implementing certain HCIT changes mandated by the 21st Century Cures bill. Specifically:
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Reduction in EHR reporting periods for new and returning participants attesting to CMS of their state Medicaid agency from the full year to a minimum of any continuous 90-day period during the year.
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A new exception for providers that demonstrate that compliance with the requirement for being a meaningful user is not possible because their certified EHR technology has been decertified under ONC’s Health IT Certification Program
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Elimination of payment adjustments for EPs who furnish substantially all of their services in an ASC.
Consistent with President Trump Executive Order asking departments to deregulate, CMS is including an RFI for suggestions on regulations, sub-regulatory guidance, policy and procedures with this purpose:
We would like to start a national conversation about improving the health care delivery system, how Medicare can contribute to making the delivery system less bureaucratic and complex, and how we can reduce burden for clinicians, providers and patients in a way that increases quality of care and decreases costs –thereby making the health care system more effective, simple, and accessible while maintaining program integrity and preventing fraud.
We hope CMS likes getting mail.
All in the payment rule is consistent with our thesis that the Trump administration will lay off of Medicare. They are not burdened with the cost curve bending that was a raison d'etre of the ACA. They are also not as inclined to buy into the theory - which dominated health care policy for 30 years and been wrong much of that time - that the federal government can save $30 billion a year through federally initiated payment and delivery programs.
Call with questions. We are always here.
Emily Evans
Managing Director
Health Policy
@HedgeyeEEvans
