CMS issues hospital inpatient PPS proposed rule for FY 2017

Editor's Note

The Centers for Medicare & Medicaid Services on April 18 issued its hospital inpatient prospective payment system (PPS) proposed rule for FY 2017.

The proposed rule includes:

• an increase in rates by 0.85% from FY 2016, after accounting for inflation and other adjustments required by law
• adjustments to reverse the effects of the 0.2% cut instituted when implementing the “two-midnight” rule in FY 2014
• an initial market-basket update of 2.8% for hospitals that were “meaningful users” of electronic health records in 2015 and submitted data on quality measures, less a productivity cut of 0.5% and an additional market-basket cut of 0.75%, as mandated by the Affordable Care Act (ACA)
• a 1.5% cut to fulfill the requirement of the American Taxpayer Relief Act of 2012 that CMS recoup the effect of documentation and coding changes from FY 2010-2012
• a reduction in overall Medicare Disproportionate Share Hospital payments by $134 million in FY 2017 from 2016, as mandated by the ACA
• a new scoring methodology for the FY 2018 Hospital-Acquired Condition Reduction Program in which hospitals would be scored based on how their measure performance compares to the national mean, rather than their performance decile
• a reduction to a hospital’s base operating DRG payment to account for excess readmissions associated with applicable conditions that include total hip arthroplasty/total knee arthroplasty and coronary artery bypass graft (CABG) surgery
• updates to the Hospital Value-Based Purchasing program that includes the addition of a 30-day mortality measure after CABG surgery beginning in FY 2022.

CMS will accept comments on the proposed rule until June 17, 2016.

Date 2016-04-18 Title Hospital Inpatient Prospective Payment System (IPPS) and Long Term Acute Care Hospital (LTCH) Proposed Rule Issues for Fiscal Year (FY) 2017 Contact press@cms.hhs.gov Hospital Inpatient Prospective Payment System (IPPS) and Long Term Acute Care Hospital (LTCH) Proposed Rule Issues for Fiscal Year (FY) 2017 On April 18, 2016 the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule to update fiscal year (FY) 2017 Medicare payment policies and rates under the Inpatient Prospective Payment System (IPPS) and the Long-Term Care Hospital (LTCH) Prospective Payment System (PPS).