On Aug. 2, the Centers for Medicare and Medicaid Services (CMS) released the final federal fiscal year (FFY) 2017 payment rule for the Medicare Inpatient Prospective Payment System (IPPS). The final rule reflects the annual updates to the Medicare fee-for-service (FFS) inpatient payment rates and policies.

A SDAHO brief summary of the major hospital provisions of the IPPS final rule is provided below. Page references are based on the display copy of the final rule.

In addition to the regular updates to wage indexes and market basket, this final rule includes:

  • The final rate reduction amount (-1.5 percent) for the Coding Offset adjustment, as mandated by the American Taxpayer Relief Act of 2012 (ATRA)
  • Updates to the program rules for the Value-Based Purchasing (VBP) and Hospital-Acquired Condition (HAC) programs
  • Updates to the payment penalties for non-compliance with the Electronic Health Record (EHR) Incentive Program
  • Updates to the Medicare Disproportionate Share Hospital (DSH) payment policies, as mandated in the Affordable Care Act of 2010 (ACA)
  • Implementation of a notification process for Medicare patients placed in observation for at least 24 hours

Program changes would be effective for discharges on or after Oct. 1, unless otherwise noted.
A copy of the final rule Federal Register (FR) and other resources related to the IPPS are available on the CMS website.

An online version of the rule will be available on Aug. 22.