IHA Daily Briefing: Aug. 6

Tuesday, August 6, 2019
CMS Issues Inpatient and LTCH PPS Final Rule
CMS Proposed Rule Issued on Kidney Care and DME
Briefly Noted

CMS Issues Inpatient and LTCH PPS Final Rule
The Centers for Medicare & Medicaid Services (CMS) released its hospital inpatient prospective payment system (PPS) and long-term care hospital (LTCH) PPS final rule for federal fiscal year (FFY) 2020 on Aug. 2.

Among the policies included in the inpatient PPS final rule are:

  • A 3.1% increase for inpatient PPS payments. Hospitals not submitting quality data will be subject to a one-quarter reduction of the initial market basket update (3.0%), and hospitals that were not meaningful users of electronic health records in FFY 2018 will be subject to a three quarter reduction of the initial market basket update;
  • Utilization of the FFY 2015 Worksheet S-10 data to determine the distribution of disproportionate share hospital uncompensated care payments for 2020;
  • An increase in the area wage index (AWI) values for hospitals with a wage index currently below the 25th percentile. The increase is to be implemented in a budget neutral manner by applying an across the board cut to the standardized amount for all inpatient PPS hospitals. The increase for the hospitals with a wage index value below the 25th percentile will be half the difference between the otherwise applicable wage index value for that hospital and the 25th percentile wage index value for all hospitals. Negative adjustments for hospitals are capped at no more than a 5% reduction over a hospital’s 2019 wage index amount;
  • Removal of the wage index data from urban hospitals that reclassify as rural when calculating each state’s rural floor;
  • An increase in the new technology add-on payments (NTAPs) from 50% to 65% of the marginal cost of the case, capped at 65% of the cost of the technology. NTAPs are applied to all technologies approved for NTAPs, including Chimeric Antigen Receptor (CAR) T-Cell therapy. CMS approved an additional nine applications for NTAPs in FFY 2020 and continues NTAPs for nine previously approved technologies. For certain antimicrobial new technologies, the NTAP would increase from 50% to 75%;
  • Continuation of any continuous 90-day reporting period for the calendar year 2021 Promoting Interoperability programs; and
  • Requirement of the reporting of a “hybrid” hospital wide readmission based on electronic health record and claims data in the Inpatient Quality Report Program.

Changes finalized in the LTCH PPS final rule include:

  • An increase in overall LTCH payments by 1.0% ($43 million);
  • An increase in net payments for cases paid a standard rate;
  • A net decrease of 5.9% ($49 million) compared to FFY 2019 for the 29% of LTCH cases expected to be paid at the site-neutral rate;
  • Implementation of a statutory payment penalty for LTCHs with fewer than 50% of their Medicare fee-for-service cases receiving a standard LTCH PPS payment;
  • Addition of two new quality measures to the LTCH Quality Reporting Program; and
  • Requiring LTCHs to begin reporting several new standardized patient assessment data elements (SPADEs) assessing patient status at admission and discharge for patients discharged beginning Oct.1, 2020.

IHA will send additional information including hospital-specific impact analysis to member hospitals in the coming weeks.


CMS Proposed Rule Issued on Kidney Care and DME
Last week, the Centers for Medicare & Medicaid Services (CMS) announced proposed changes to the Medicare payment rules for End-Stage Renal Disease (ESRD) Prospective Payment System (PPS), Durable Medical Equipment Prosthetics, Orthotics, and Supplies (DMEPOS), and the ESRD Quality Incentive Program. CMS says the changes proposed in the rule build on a Presidential Executive Order and are designed to improve kidney care and promote competition in DME by modernizing how CMS pays for care, reducing regulatory barriers for new treatments and streamlining processes.

The ESRD PPS base rate proposed for calendar year (CY) 2020 is $240.27, an increase of $5.00 to the current base rate of $235.27. For CY 2020, the proposed Acute Kidney Injury dialysis payment rate is $240.27.

CMS is proposing to update the outlier services fixed-dollar loss (FDL) amounts for adult and pediatric patients and Medicare Allowable Payment (MAP) amounts for adult and pediatric patients for CY 2020, using 2018 claims data. 

Under the proposed rule, certain new and innovative equipment and supplies used to care for an ESRD patient would qualify for an add-on payment adjustment.

Also, CMS is proposing refinements to eligibility for the transitional drug add-on payment adjustment (TDAPA) under the ESRD PPS to better target the additional payment to innovative renal dialysis drugs and biological products based on the Food and Drug Administration’s (FDA’s) New Drug Application Classifications. In addition, CMS proposes to exclude generic drugs from TDAPA eligibility so that research can be targeted to new and innovative drugs for patients with ESRD.

Related to new DMEPOS items and services, the proposed rule is said to provide greater transparency for innovators regarding how CMS determines if new items and services are comparable to older items and services for Medicare pricing purposes. CMS plans on setting the DMEPOS Medicare payment for new items based on commercial pricing data.

More details can be found in a CMS fact sheet.

The proposed rule can be viewed here. Comments are due to CMS by Sept. 27.


Briefly Noted
A Statistical Brief released by the Agency for Healthcare Research and Quality analyzes the number of visits U.S. civilian adults make to their usual source of care (USC) providers in 2016. During that year, more than 183 million (76%) non-institutionalized people 18 years old and older had a USC and of those persons, more than 113 million (62%) non-institutionalized people saw their USC at least once during the year. The brief covers the various types of USC providers, clinical staff and practice attributes.