Medicare's proposed 2017 IPPS rule draws mixed reaction

Two yellow arrows pointing in opposite directions

The American Hospital Association has submitted 42 pages of comments to the Centers for Medicare & Medicaid Services regarding its proposed rules for the 2017 inpatient prospective payment system (IPPS) for hospitals.

The AHA likes some proposals--such as the restoration of a proposed 0.2 percent cut stemming from the rollback of the two-midnight rule. The CMS had also proposed a 0.6 percent temporary payment bump to offset the estimated prior cost burden of having the two-midnight rule in place. Dozens of hospitals had filed suit in order to get the two-midnight rule rolled back.

“The AHA appreciates that CMS has decided to reverse this payment reduction and supports the agency’s proposals to restore the resources that hospitals are lawfully due,” wrote AHA Executive Vice President Thomas P. Nickels to acting CMS Administrator Andrew Slavitt.

However, the AHA has taken issue with other proposals, such as the proposed 1.5 percent cut to the inpatient PPS payments to fulfill documentation and coding changes under the American Taxpayer Relief Act (ATRA) and eventually recoup $11 billion.

“The AHA is extremely troubled by this proposal and believes it is inconsistent with Congress’ intent in ATRA, as well as the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) where Congress reiterated its belief that the reduction should be 0.8 percentage points,” Nickels wrote.

The AHA also expressed concerns about the accuracy of using S-10 data to set Disproportionate Share Hospital (DSH) payments, which have been partly phased out as part of the expansion of Medicaid eligibility under the Affordable Care Act. It urged CMS to take “additional steps to ensure the accuracy, consistency and completeness of these data prior to their use.”

Under the proposal, CMS would retain 75 percent of DSH payments into a pool and disburse a portion of it to hospitals under a formula based on the nationwide rate of uninsured. The AHA also wants more transparency in the calculation process as well.

- read the AHA's comments (.pdf)