The Centers for Medicare & Medicaid Services late today issued a proposed rule that would increase Medicare inpatient prospective payment system rates by a net 3.2 percent in FY 2020, compared to FY 2019, for hospitals that are meaningful users of electronic health records and submit quality measure data. Additionally, the rule makes changes to Disproportionate Share Hospital payments, new technology payments, the area wage index and quality incentive programs.

For FY 2020, the agency estimates that it will distribute $8.49 billion in DSH payments, an increase of approximately $216 million compared to FY 2019. In addition, CMS proposes to use a single year of uncompensated care data to determine the distribution of DSH uncompensated care payments for FY 2020. Previously, CMS had averaged three years of data.

CMS also proposes to increase the marginal rate of the new technology add-on payment, including for CAR-T therapies, from 50 to 65 percent.

In addition, CMS proposes changes to the area wage index. Among other proposals, the rule would increase the wage index for hospitals with a wage index value below the 25th percentile. It also would decrease the wage index for hospitals with values above the 75th percentile to make this policy budget neutral.

The agency also proposes a number of updates to its hospital quality incentive programs. It would add three new electronic clinical quality measures to the inpatient quality reporting program including two opioid-related measures and a hybrid hospital-wide all-cause readmission measure.

“The AHA looks forward to reviewing in detail the proposals CMS put forth today that cover inpatient and long-term care hospital services under Medicare,” said AHA Executive President Tom Nickels. “Based on our initial review, we are pleased that the agency has increased the new technology add-on payment rate, including for CAR-T therapies. Hospitals and health systems have been taking on this financial burden to ensure access to these life-saving treatments for patients, and while this proposal is not a permanent solution, it will help in the short-term. In addition, we are strongly supportive of the proposed 90-day reporting period for attestation for the Promoting Interoperability Programs, a move that will reduce regulatory burden on hospitals.”

CMS will accept comments on the proposed rule through June 24.

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