On August 2, 2019, 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 (PPS) final rule (CMS-1716-F). The final rule is scheduled to be published in the Federal Register on August 16, 2019. CMS also published a fact sheet describing the proposed rule, which may be found here. This final rule is effective October 1, 2019.

CMS states that the final rule “reflects the agency’s efforts to transform the healthcare delivery system through competition and innovation to provide patients with better value and results.”

Medicare payments for inpatient hospital services are anticipated to increase by 3.0%, or $3.8 billion in FY 2020. CMS projects a market basket update of “3.0 percent reduced by a 0.4 percentage point productivity adjustment. This also reflects a +0.5 percentage point adjustment required by legislation.”

Medicare payments for LTCHs are estimated to increase by 1.0%, or $43 million, in FY 2020.

Below we address some of the policies CMS finalized for FY 2020.