Medicare Payment and Reimbursement

FY2019 IPPS/LTCH Proposed Rule

May 7, 2018 1:08 pm

HFMA Executive Summary

For more information on these highlights from CMS’s FY2019 IPPS/LTCH Proposed Rule, download a PowerPoint presentation, a detailed summary, or the full text of the rule in the Federal Register .

Payment rate increases
For most hospitals that successfully report quality measures and are meaningful users of EHRs, the proposed increase to operating payment rates is 1.75%: a market basket increase of 2.8% plus and minus several factors. Other payment impact details:

  • HRRP: penalties for 2,610 hospitals, up from 2,591 in FY2018 increasing savings from Medicare by $2MM
  • Low Volume Hospitals: Medicare payments increase by an estimated $72M for 622 providers (606 providers in FY2018)
  • Medicare DSH: Traditional DSH payments increase an estimated 4.8 percent  or approximately about $140MM
  • Uncompensated Care: Uncompensated care cost payments are estimated to increase 21.9% ($1.484 billion), due to changes in the number of uninsured individuals in FY2019

Meaningful Measures Initiative 

CMS believes the Hospital VBP Program should measure priorities not measured by HRRP or HAC Reduction Program. Proposes 10 measures for removal from the Hospital VBP Program, and the total number of VBP Program measures for FY2021 would go down from 15 to 7 measures.

VBP Program Domains & Weighting

CMS proposes removal of the safety domain beginning with FY2021 payment. Current measures are proposed for removal then, no new measures are proposed, and the HAC Reduction Program focuses on the safety aspect of care quality. CMS proposes to change the name of the Clinical Care Domain to Clinical Outcomes beginning with FY2020.

  • New proposed weighting would be 50% for Clinical Outcomes, 25% for Person and Community Engagement (HCAHPS), and 25% for Efficiency/Cost Reduction (MSPB). 

Hospital Inpatient Quality Reporting (IQR) Program 

CMS proposes to remove 39 measures from the Hospital IQR Program from FY2020 through FY2023 payment determinations. 19 of these measures would still be used in the HRRP, Hospital VBP Program, or HAC Reduction Program.

Admission Order Documentation Requirements 

CMS has concluded that if a hospital is operating in accordance with the hospital CoPs, medical reviews should primarily focus on whether the inpatient admission was medically reasonable and necessary rather than occasional inadvertent signature documentation issues unrelated to the medical necessity of the inpatient stay.

EHR Programs 

The Medicare and Medicaid EHR Programs have been renamed the Medicare and Medicaid Promoting Interoperability Programs. CMS proposes no changes to its previously finalized policy requiring eligible hospitals and CAHs to use EHR technology certified to the 2015 Edition of Certified EHR Technology (CEHRT).

CMS proposes a new scoring methodology and new measures for the program. New objectives and measures would include:

  • e-Prescribing (1 to 3 measures; 5 to 15 points. Includes 2 optional new measures)
  • Health Information Exchange (2 measures; 40 points)
  • Provider to Patient Exchange (1 measure; 35 – 40 points)
  • Public Health Data Exchange (2 measures; 10 points)


CMS also seeks public comment on the future direction of the Promoting Interoperability Programs.

Price Transparency 

CMS expresses concern that insufficient price transparency continues to challenge patients, including in the areas of surprise out-of-network bills and unhelpful chargemaster data. CMS is updating guidelines to require hospitals to make a list of current standard charges available via internet in a machine-readable format, updated at least annually. CMS also seeks public comment on related issues, including: 

  • The proper definition of “standard charges”
  • Information most beneficial to patients
  • A requirement that hospitals inform patients of out-of-pocket costs before a service is provided
  • The role of providers in informing patients of out-of-pocket obligations
  • A requirement that providers give patients information on what Medicare pays for a particular service
  • Appropriate mechanisms for CMS to enforce price transparency

Comments on the proposed rule are due June 25, 2018.


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