CMS releases final 2017 payment rates and rules

Final 2017 payment rates and rules for inpatient psychiatric facilities, SNFs, hospice and IRFs released by CMS

At the agencies

On July 29, CMS issued final rules that increase 2017 Medicare payments for Skilled Nursing Facilities (SNFs) by 2.4 percent and increased rates for Inpatient Rehabilitation Facilities (IRFs) by 1.9 percent. The rule also adds Medicare spending per beneficiary in post-acute care, discharge to community, and “potentially preventable” 30-Day post-discharge readmission, as new quality measures to be used in determining SNF and IRF payments beginning in fiscal year 2018. For IRFs specifically, CMS is implementing “potentially preventable” within stay readmission as a new quality measure and will maintain facility level adjustment factors at their current levels.  Beginning in 2020, a new drug regimen review will also be added as a quality measure for both IRFs and SNFs.

Finally, the rule adds new provisions to the SNF Value-Based Purchasing (VBP) Program that will go into effect in 2019, by first specifying how the SNF 30-Day “potentially preventable” readmission measure (SNFPPR) will be used as a performance measure. The rule also outlines new requirements that include adding performance standards, scoring methodology, and confidential feedback report mechanisms to the SNF VBP Program.

On July 28, CMS announced that it will increase fiscal year 2017 Medicare payments to the Inpatient Psychiatric Facilities Prospective Payment System by 2.2 percent, or roughly $100 million, starting October 1. The facilities targeted for the increased funding will include freestanding psychiatric hospitals and psychiatric units at acute care hospitals.

On August 2, CMS updated its fiscal year 2017 Medicare payments for the Inpatient Prospective Payment System (IPPS) and the Long-Term Care Hospital Prospective Payment System (LTCH PPS). Under the new rule, IPPS hospitals will utilize a 0.95 percent market basket rate. The rule additionally cuts documentation and coding related payments by 1.5 percent instead of the originally proposed 0.8 percent cut. Finally, CMS will no longer implement its two-midnight rule regarding inpatient admissions payments.

On July 29, CMS released a final rule that increases 2017 hospice payments by 2.1 percent. The rule also announces that CMS will use the hospice payment update percentage instead of the urban consumer price index to calculate the hospice cap in the years between September 2016 and October 2025. The hospice cap for 2017 will be $28,404.99.

The rule additionally made changes to the Hospice Quality Reporting Program by providing guidance on writing, implementing, and disseminating the results of a quality reporting survey. Additionally, the CMS rule adds “Hospice Visits When Death is Imminent” and “Hospice and Palliative Care Composite Process Measure” as new quality measures for fiscal year 2017. The rule states that any hospice that fails to meet its quality reporting requirements will face a 2 percent reduction in their CMS payments.

On July 25, CMS proposed its second-ever mandatory payments program for care following a cardiac episode. The program would make hospitals accountable for the cost and quality of care for heart attack and cardiac surgery patients for the first 90 days after discharge. The program would go into effect July 2017, beginning in 100 metropolitan areas and would be steadily implemented over five years around the country. CMS reported a 50 percent disparity in post cardiac episode treatment cost across US hospitals in 2014. The mandatory payment plans would be eligible as Advanced Alternative Payment Models, which are excluded from the new proposed reporting program and are instead lump-sum recipients from Medicare. CMS additionally noted its intention to extend the original mandatory hip and knee bundle to include hip surgeries as well.

On August 1, CMS announced that 14 regions will participate in its new Comprehensive Primary Care Plus (CPC+) initiative, a five-year model designed to strengthen primary care through a regionally-based multipayer payment reform and care delivery transformation. CPC+ will include two primary care practice tracks with incrementally advanced care delivery requirements and payment options, to give practices greater financial resources and flexibility to make appropriate investments to improve the quality and efficiency of care, and reduce unnecessary healthcare services. Primary care practices in Arkansas, Colorado, Hawaii, Michigan, Montana, New Jersey, Oklahoma, Oregon, Rhode Island, Tennessee, Kansas City, North Hudson region of New York, and Philadelphia, can apply to participate in the demonstration between now and Sept. 15 with the model expected to launch in January 2017.

On July 29, CMS announced that it will extend its temporary provider enrollment freeze for non-emergency ambulance suppliers under Medicare and the Children’s Health Insurance Program (CHIP) in a continued effort that is designed to combat fraud. It also expanded this freeze on new  non-emergency ground ambulance suppliers statewide in New Jersey, Pennsylvania, and Texas as opposed to previously focusing on specific urban areas. CMS additionally continued its freeze on home health agencies in Florida, Texas, Illinois, and Michigan. At the same time, CMS lifted its freeze on Medicare Part B, Medicaid, and CHIP emergency ground ambulance suppliers.  

For more information on this topic, or to learn how Baker Tilly healthcare specialists can help, contact our team.