Payment Update. The FY 2019 payment update for hospitals brings to an end most of the Medicare payment cuts that acted as budgetary offsets for the Affordable Care Act. Further, the HHS Office of the Actuary is projecting a pick-up in wage and labor costs resulting in more attractive market basket adjustments. In FY 2018, Medicare operating payments to inpatient hospitals will increase about 1.85 percent.
FY 2019 is the final year of a ACA mandated 0.75 percent payment reduction while the upward MACRA adjustment will continue until 2023. Medicare DSH payments will also increase and an estimated 1.5 billion as a result of a change in approach by CMS in measuring uncompensated care. New technology add-on payments will increase about $200 million due, in part, to the addition of NVS’ and Kite Pharmaceuticals’ KYMRIAH and YESCARTA CAR-T procedures.
After accounting for these and other policy changes, CMS expects payments to hospitals to increase 2.4 percent in FY 2019.
Meaningful Use. In addition to the more pleasant Medicare reimbursement environment, CMS has formally put an end to the Meaningful Use program as we know it. Now called “Promoting Interoperability,” the program is shifting its focus away from EHR adoption by health care providers toward accessibility and interoperability by clinicians and patients.
To meet the needs to this change in program direction, CMS is replacing 11 measures designed to meet six program goals with six measures associated with four goals. Additionally, CMS is abandoning the much-derided threshold system in place of a scoring system. Under the scoring system, providers must score 50 points or more to be considered a meaningful user.
The points system allows providers to ignore certain measures, like registry reporting, provided they make it up somewhere else. Note that Security Risk Analysis remains a requirement but is not part of the Promoting Interoperability scoring system.
The net result of the shift from Meaningful Use Stage 3 to Promoting Interoperability is that hospital CTOs have more clarity on Federal mandates than they have had in a while. Also, buried in the fine print is a suggestion that CMS might just provide a pathway for avoiding the federal EHR incentive program altogether. They note that they are considering a strategy “of creating a set of priority health IT activities that would serve as alternatives to the traditional EHR Incentive measures.”
In short, there is little in Federal policy that offers a compelling argument for a provider to buy or replace their existing EHR system.
Transparency. CMS finalized a requirement that hospitals must provide, in machine readable form, available on the internet, their standard charges. These prices can be the hospital’s chargemaster or some other form the hospital chooses. The requirement is effective January 1, 2019.
The posted prices will not reflect negotiated prices with insurers or other discounts. However, this requirement is almost certainly a small baby step toward greater price disclosure.
Emily Evans
Managing Director
Health Policy
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