On Tuesday, April 23, the Centers for Medicare & Medicaid Services (CMS) published its Fiscal Year (FY) 2020 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long Term Acute Care Hospital (LTCH) Prospective Payment System Proposed Rule and Request for Information.  The proposed rule is available here.  A CMS Fact Sheet describing the final rule is available here. 

The proposed rule would increase Medicare IPPS payment 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.  CMS estimates that under the proposed rule it would distribute in 2020 about $8.50 billion in Medicare disproportionate share hospital (DSH) payments, an increase of about $216 million from FY 2019.  CMS also proposes using a single year of data on uncompensated care costs from Worksheet S-10 of the Medicare cost report for FY 2015 to distribute Medicare DSH payments (rather than averaging three years of data).  In addition, CMS is seeking public comments on whether the agency should, due to changes in the reporting instructions that became effective for FY 2017, use a single year of Worksheet S-10 data from the FY 2017 cost reports, instead of the FY 2015 Worksheet S-10 data, to distribute the amount available for uncompensated care payments for FY 2020.  The proposed rule would increase the wage index for hospitals with a wage index value below the 25th percentile and decrease the wage index for hospitals with values above the 75th percentile.  The proposed rule would increase the marginal rate of the new technology add-on payment, including for CAR T cell therapy, from 50 to 65 percent. CMS also proposes certain updates to its quality incentive programs.

For LTCHs, payments would increase by $37 million as compared to FY 2019.  For 2020 and thereafter, CMS proposes a payment reduction for LTCHs that have fewer than 50 percent of cases qualifying for the traditional rate.  These LTCHs would be paid a site-neutral rate based on IPPS payments.      

The proposed rule will be published in the May 3 Federal Register.  The deadline for submitting comments on the proposed rule is June 24, 2019.