CMS released the Fiscal Year (FY) 2020 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long Term Acute Care Hospital (LTCH) Prospective Payment System proposed rule last week. The rule overall is expected to increase total Medicare spending on inpatient hospital services by $4.7 billion in FY 2020, and long-term acute care payments are projected to increase by approximately $37 million.

Click here to see a high-level summary.

Key takeaways of the IPPS NPRM include:

  • The proposed payment rate increase for FY 2020 would be the largest in a decade. CMS projects that total Medicare spending on inpatient hospital services, including the capital, will increase by about $4.7 billion in FY 2020, leading to an average increase in overall payments by 3.2%.
  • CMS has proposed substantial modifications to the wage index calculation methodology to address payment disparities between rural and urban facilities with the ultimate goal of increasing payment rates for hospitals in the lowest-cost areas of the country. Notably, these changes are budget neutral and thus creates winners and losers.
  • CMS proposed increased Medicare reimbursement for hospitals administering Chimeric Antigen Receptor (CAR-T) cancer drugs, although it does not yet create a billing code for the therapies.
  • CMS sets out several proposals to revise policies related to new technology add-on payments and increase payment rates (maximum new technology add-on payment increased from $186,500 to $242,450).
  • CMS continues to streamline its quality measure program as it removes topped out measures and consolidates others, along with a renewed focus on opioid-related measures.
  • For the Medicare and Medicaid Interoperability Programs, CMS will continue a minimum 90-day reporting period. CMS proposes new measures and seeks comments on improving the use of electronic health records (EHRs), among other topics.

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