Final rule released for FY2018 Medicare inpatient payments (IPPS)

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Blurred figures of people with medical uniforms in hospital corridor

On Aug. 2, the Centers for Medicare & Medicaid Services (CMS) released a final rule to update the hospital inpatient prospective payment system (IPPS) for fiscal year (FY) 2018, which begins Oct. 1, 2017. Provisions of the final rule include:

  • Increasing rates by a net 1.1 percent.
  • Finalizing the proposal to use data from the CMS National Health Expenditures Account rather than the Congressional Budget Office for calculating the uninsured rate. This change would increase overall Medicare disproportionate share hospital payments by approximately $800 million nationally.
  • A three-year phase-in beginning in FY 2018 to use data reported on hospital cost report worksheet S-10 for determining the amounts and distribution of uncompensated care payments.
  • Modifying the electronic health record reporting period for FY 2018 for new and returning participants that attest to the CMS or their state Medicaid agency.
  • Finalization of the socioeconomic adjustment approach mandated by the 21st Century Cures Act for the FY 2019 hospital readmissions reduction program.
  • Reducing the number of electronic clinical quality measures (eCQMs) that hospitals must report, with a shorter data reporting period for the inpatient quality reporting program.
  • Updating the measures and scoring approach for the hospital value-based purchasing program, the hospital-acquired conditions reporting program, and the quality reporting programs for inpatient psychiatric hospitals.

SDAHO continues to analyze the final rule and will provide additional information, including hospital-specific impact reports, in the near future.