CMS Releases FY 2020 IPPS Proposed Rule

May 2019 ~

On April 23, CMS released its proposed rule that, if finalized, would update Medicare payment policies for hospitals under the Inpatient Prospective Payment System (IPPS) and the Long-Term Care Hospital (LTCH) Prospective Payment System (PPS) for fiscal year 2020.

In the proposal, CMS is seeking the revision of the Medicare hospital IPPS for operating and capital-related costs of acute care hospitals to implement changes. The agency is also proposing to provide the market basket update that would apply to the rate of increase limits for certain hospitals excluded from the IPPS that are paid on a reasonable cost basis, subject to these limits for FY 2020.

The proposal also includes an update to the payment policies and the annual payment rates for the Medicare PPS for inpatient hospital services provided by LTCHs for FY 2020.  LTCH site neutral payment rate cases will begin to be paid fully on the site neutral payment rate, rather than the transitional blended rate, for LTCH discharges occurring in cost reporting periods beginning in FY 2020.

CMS expects LTCH-PPS payments to increase by approximately 0.9 percent or $37 million. LTCH PPS payments for FY 2020 for discharges paid using the standard LTCH payment rate are expected to increase by 2.3 percent, and LTCH PPS payments for cases continuing to transition to the site neutral payment rates are expected to decrease by approximately 4.9 percent, according to the agency.

The proposed rule also seeks to address wage index disparities between high and low wage index hospitals. According to the fact sheet, CMS is proposing to increase the wage index for hospitals with a wage index value below the 25th percentile. These hospitals’ wage indexes would be increased by half the difference between the otherwise applicable wage index value for that hospital and the 25th percentile wage index value across all hospitals. This proposed policy would be effective for at least 4 years, beginning in FY 2020, in order to allow employee compensation increases implemented by these hospitals sufficient time to be reflected in the wage index calculation.  The agency is proposing to decrease the wage index for hospitals above the 75th percentile so that Medicare spending does not increase as a result of this proposal.

CMS has also proposed to establish new requirements or revise existing requirements for quality reporting by specific Medicare providers (acute care hospitals, PPS exempt cancer hospitals, and LTCHs). CMS proposes updating the Hospital IQR Program’s measure set, among other changes.  Specifically, the rule proposes to:

  • Remove the Claims-Based Hospital-Wide All-Cause Readmission measure and replace with the proposed Hybrid Hospital-Wide All-Cause Readmission (Hybrid HWR) Measure with Claims and Electronic Health Record Data measure require reporting beginning with the FY 2026 payment determination after 2 years of voluntary reporting of the Hybrid HWR measure; and establish reporting and submission requirements for the hybrid measures.
  • Adopt two new opioid-related electronic clinical quality measures (eCQMs) beginning with the CY 2021 reporting period/FY 2023 payment determination:
    1. Safe Use of Opioids – Concurrent Prescribing eCQM, and
    2. Hospital Harm – Opioid-Related Adverse Events eCQM.

As well, CMS is hoping to establish new requirements and revise existing requirements for eligible hospitals and critical access hospitals (CAHs) participating in the Medicare and Medicaid Promoting Interoperability Programs. CMS is proposing three changes for reporting eCQMs. These proposals align with the Promoting Interoperability Program’s Clinical Quality Measure proposals:

  • For the CY 2020 reporting period/FY 2022 payment determination and CY 2021 reporting period/FY 2023 payment determination, to extend the current eCQM reporting and submission requirements finalized for the CY 2019 reporting period, such that hospitals submit one, self-selected calendar quarter of discharge data for four self-selected eCQMs in the Hospital IQR Program measure set;
  • For the CY 2022 reporting period/FY 2024 payment determination, to require hospitals to report one, self-selected calendar quarter of data for: (1) three self-selected eCQMs, and (2) the proposed Safe Use of Opioids – Concurrent Prescribing eCQM, for a total of four eCQMs,
  • Require EHR technology be certified to all eCQMs available to report for the CY 2020 reporting period/FY 2022 payment determination and subsequent years.

The agency also included, in its proposal, an update policies for the Hospital Value-Based Purchasing (VBP) Program, the Hospital Readmissions Reduction Program (HRRP), and the Hospital-Acquired Condition (HAC) Reduction Program.


CMS is proposing that the Hospital VBP Program would use the same data as the HAC Reduction Program to calculate the National Health Safety Network (NHSN) Healthcare-Associated Infection (HAI) measures beginning with CY 2020 data collection, which is when the Hospital IQR Program will cease collecting data on those measures. CMS is also proposing that the Hospital VBP Program would rely on the process used by the HAC Reduction Program to validate the NHSN HAI measures to ensure that the measure rates are accurate for use in the Hospital VBP Program. In addition, CMS is estimating the performance standards that would apply to a number of measures in future program years.


CMS is proposing to:

  • Establish the performance period for the FY 2022 program year
  • Adopt eight factors CMS would use when deciding whether a measure should be removed from the Hospital Readmissions Reduction Program; all of these factors were previously adopted by the Hospital IQR and Hospital VBP Programs
  • Update the definition of “dual eligible”
  • Adopt a subregulatory process to address potential nonsubstantive changes to the payment adjustment factor components.

HAC Reduction Program

CMS is proposing to:

  • Specify the dates to collect data used to calculate hospital performance for the FY 2022 HAC Reduction Program
  • Adopt eight factors CMS would use when deciding whether a measure should be removed from the HAC Reduction Program; all of these factors were previously adopted by the Hospital IQR and Hospital VBP Programs
  • Clarify administrative processes for validating National Healthcare Safety Network (NHSN) Healthcare-associated Infection (HAI) data submitted by hospitals to the Centers for Disease Control and Prevention (CDC).

Medicare and Medicaid Promoting Interoperability Programs

CMS is proposing an electronic health record (EHR) reporting period of a minimum of any continuous 90-day period in CY 2021 for new and returning participants (eligible hospitals and CAHs) in the Medicare Promoting Interoperability Program attesting to CMS.

The agency proposes to continue for CY 2020 the Query of PDMP measure as optional and available for bonus points instead of being required as was finalized last year because of unintended and unforeseen challenges which arose from the stakeholder community citing implementation difficulties and provider burden. To minimize burden, CMS also proposes converting this measure from a numerator/denominator response to a yes/no attestation beginning with the EHR reporting period in CY 2019.

Additionally, CMS is proposing to remove the Verify Opioid Treatment Agreement measure beginning in CY 2020 from the Promoting Interoperability Program because of received feedback from stakeholders that this measure presents significant implementation challenges, leads to an increase in burden, and does not further interoperability.

For more information, refer to the CMS Fact Sheet.

Source(s): Healthcare Finance; Modern Healthcare; American Association of Medical Colleges; Becker’s Hospital Review;