CMS issues proposed rule with increase for inpatient hospitals

CMS issues proposed rule with increase for inpatient hospitals

At the agencies

The Centers for Medicare and Medicaid Services (CMS) has released a proposed hospital inpatient pay rule which would pay hospitals $3.1 billion more in the fiscal 2018 year, a 2.9 percent increase. The proposed rule would also include an increase in uncompensated care payments to $7 billion, up about a billion from the current fiscal year spending. For long-term care hospitals (LTCH), CMS expects a 3.75 percent cut, roughly $173 million for the 2018 fiscal year and is “evaluating” the 25 percent threshold policy. 

CMS is also proposing to revisit the short-stay outlier payment adjustment for LTCHs, and some revisions in the LTCH quality reporting program, reducing the required measures from eight to six and cutting the self-selected quarters of data to two quarters instead of the full year. The proposed regulations included shortening the 2018 reporting year for electronic health records to 90 days and introducing the voluntary reporting of a new Hybrid Hospital-Wide Readmission Measure with Claims and Electronic Health Record Data. The proposed rule includes an RFI and comment period which ends on June 13, 2017.

The Department of Health and Human Services (HHS) is currently considering whether to fund cost-sharing reductions (CSRs), which are subsidies established by the Affordable Care Act (ACA) and paid to health insurance companies in the amount of about $7 billion each year. CSRs paid to health insurance companies in turn lower the amount that exchange participants pay for deductibles, copayments and coinsurance. The CSRs are the subject of a lawsuit filed by House Republicans, who argue that the Obama Administration illegally funded the payments without congressional approval and appropriations. The Obama Administration appealed the case but the Trump Administration could drop the appeal at any time, which would eliminate the subsidies. 

The Centers for Medicare and Medicaid Services (CMS) has published its final rule that intends to stabilize healthcare exchanges. The final rule includes policy changes encouraged by the insurers. Among the changes are a shortened open enrollment time period, a flexible minimum actuarial value allowing plans to vary by 4 percent and the elimination of federal review for network adequacy. The American Hospital Association issued a comment on the rule stating its concern that the rule would threaten consumer access to coverage and care, particularly essential community providers. The American College of Physicians, the American Academy of Family Physicians, American’s Essential Hospitals and other provider and advocacy groups had urged CMS to not finalize the rule.

CMS has proposed a six month delay for new home health conditions of participation due to home health companies’ requests for additional time and guidance from CMS to prepare for the new conditions of participation. The rule was originally proposed in 2014, finalized in January 2017 and due to go into effect on July 13, 2017. The rule would require home health companies to provide information to patients and caregivers about upcoming visits, medications, treatments, instruction of care for patients and additional contact information for home health agency clinical managers. Data-driven, company-wide quality and performance improvement projects that evaluate care for patients would also be required.

CMS has announced Medicare Advantage plans will receive a 0.45 percent increase in funding in 2018. The bump is a 0.25 percent increase from the Trump Administration’s February proposal. The announcement included a change of the proposed level of encounter data used to determine the Medicare Advantage fund formula from 25 percent to 15 percent. CMS also chose to not move forward with alternations to the funding model for employer-based plans that the Obama Administration had proposed.

On the Hill

A Congressional Research Services (CRS) report has highlighted a number of programs set to expire this year unless Congress renews them, including: Children Health Insurance Program (CHIP), the Teaching Health Care Graduate Medical Education (THCGME), primary care grants and the National Health Service Corps (NHSC) and a dozen other programs. The Medicare Access and CHIP reauthorization Act funded CHIP at $310 million annually for two years in 2015. On Oct. 1, 2017 THCGME and NHSC funding will run out. Congress last appropriated discretionary money to NHSC in 2011 and the ACA appropriated $1.5 billion for the program from 2011 to 2015. Congressional aides have stated that Congress plans to reauthorize funding for CHIP and other expiring programs but no official plans have been released.

For more information on this topic, or to learn how Baker Tilly healthcare specialists can help, contact our team.

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