CMS Finalizes 2018 Payment and Policy Updates for Medicare Hospital Admissions

On August 2, CMS issued the FY 2018 Medicare Inpatient Prospective Payment System and Long-Term Care Hospital Prospective Payment System final rule, which updates 2018 Medicare payment and policies when patients are discharged from hospitals. The final rule relieves regulatory burdens for providers, supports the patient-doctor relationship in healthcare, and promotes transparency, flexibility, and innovation in the delivery of care for Medicare patients. 

Due to the combination of payment rate increases and other policies and payment adjustments, particularly in changes in uncompensated care payments, acute care hospitals will see a total increase in Medicare spending on inpatient hospital payments of $2.4 billion in FY 2018. Based in part on the changes included in the final rule, overall payments to long-term care hospitals will decrease by $110 million in FY 2018.

In addition to the payment and policy updates for Medicare hospital admissions, the final rule addresses changes to how the public is notified of Medicare terminations of certain providers and implements the statutory extension of the Rural Community Hospital Demonstration.  

CMS Updates Medicare Payment Rates, Quality Reporting Requirements

CMS issued three final rules outlining 2018 Medicare payment rates for skilled nursing facilities, hospice, and inpatient rehabilitation facilities. The final rules are effective for FY 2018 and reflect a broader Administration strategy to streamline administrative requirements for providers; support the patient-doctor relationship in healthcare; and promote transparency, flexibility, and innovation in the delivery of care.

Physician Fee Schedule: CMS Proposes 2018 Payment and Policy Updates

The new proposed rule and request for Information provides flexibility, and supports strong patient-doctor relationships.

On July 13, CMS issued a proposed rule that would update Medicare payment and policies for doctors and other clinicians who treat Medicare patients in CY 2018. The proposed rule is one of several Medicare payment rules for CY 2018 that reflect a broader strategy to relieve regulatory burdens for providers; support the patient-doctor relationship in healthcare; and promote transparency, flexibility, and innovation in the delivery of care.

The Physician Fee Schedule is updated annually to include changes to payment policies, payment rates, and quality provisions for services furnished to Medicare beneficiaries. This proposed rule would provide greater potential for payment system modernization and seeks public comment on reducing administrative burdens for providing patient care, including visits, care management, and telehealth services. The rule takes steps to better align incentives and provide clinicians with a smoother transition to the new Merit-based Incentive Payment System under the Quality Payment Program. The rule encourages fairer competition between hospitals and physician practices by promoting greater payment alignment, and it would improve the payment for office-based behavioral health services that are often the therapy and counseling services used to treat opioid addiction and other substance use disorders. In addition, the proposed rule makes additional proposals to implement the Center for Medicare and Medicaid Innovation’s Medicare Diabetes Prevention Program expanded model starting in 2018.

After applying adjustments, and the budget neutrality adjustment to account for changes in RVUs, all required by law, the proposed 2018 PFS conversion factor is $35.99, an increase to the 2017 PFS conversion factor of $35.89.

Another proposed change are new CPT codes – not yet finalized –that will replace a number of G codes that CMS finalized for the 2017 reporting year. These new CPT codes will most likely include Collaborative Care Management codes (G0502, G0503, G0504), which will crosswalk to services listed under placeholder codes 994X1, 994X2 and 994X3, respectively; cognitive-assessment code G0505, which will crosswalk to 99XX3; the initiating visit code for chronic care management (CCM) (G0506), which does not yet appear to have a crosswalk; and general behavioral health integration code G0507), which crosswalks to 99XX5.

There are some proposed minor operational changes to the CMS shared services program---the  accountable care organization (ACO) program.   These include adding new chronic care management (CCM) and behavioral health integration (BHI) codes to its definition of primary care services under the program and assigning beneficiaries based on service supplied at rural health clinics (RHCs) or federally qualified health centers (FQHCs).  This information will be finalized before the end of 2017.

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