2020 IPPS proposed rule increases rural health payments, expedites new technology process

Wednesday, April 24, 2019

CMS published the FY 2020 Inpatient Prospective Payment System (IPPS) proposed rule on April 23, and the rule’s proposals significantly alter rural health payments, expedites opportunities to pay for new technology, and introduces 324 changes to ICD-10-CM codes.

In an effort to address wage index disparities and support quality healthcare in rural areas, CMS is proposing a new methodology for wage index calculation. Under the current wage index system, a hospital in a rural community with low wages may receive $4,000 in Medicare payments for a given treatment while a hospital in an urban community with higher wages would receive $6,000 in Medicare payments for that same treatment.

Because the rural communities tend to face more financial obstacles due to communities with higher poverty rates, beneficiaries with more chronic conditions, and more uninsured or underinsured beneficiaries, CMS is proposing to increase the wage index for hospitals below the 25th percentile of the wage index value and decrease the wage index for hospitals above the 75th percentile of the wage index value.

CMS will limit the reductions to higher wage index hospitals by proposing a 5% cap on any decrease in a hospital’s wage index from its final wage index for FY 2019. More information on the proposed changes to rural health payment is available at HealthLeadersMedia.com.


Updating new technology payment processes

In a press release on the proposed rule, CMS stated that one of its priorities for 2020 centers around “unleashing innovation.” CMS is proposing multiple pathways for new technology payment, including lowering the criterion necessary for medical devices subject to one of the FDA’s expedited programs to meet the IPPS new technology add-on payment and increasing add-on payments for new technology from 50% to 65%. As part of an effort to make the latest treatment innovations available to Medicare beneficiaries, CMS is proposing to waive for two years the requirement for evidence that FDA Breakthrough Devices demonstrate a “substantial clinical improvement.”

“I am particularly concerned about cases that have been reported to the agency in which Medicare’s inadequate payment has led hospitals to curtail access to needed therapies,” said CMS Administrator Seema Verma in a press release. “We must continually update our policies in response to the rapid pace of advancement in medical science.”

CMS said in the proposed rule that it is specifically seeking comments on better ways to define the substantial clinical improvement criterion under the IPPS new technology add-on payment policy and the OPPS transitional pass-through payment policy.


ICD-10-CM code updates

The proposed rule also introduces 324 changes to the ICD-10-CM code set to be implemented October 1, 2019. The update boasts 273 new codes, including 60 acute fracture codes for eye wall fractures, 75 codes for injuries sustained during a legal intervention, and 25 codes for deep tissue injuries. The 2020 coding changes also include 30 revised codes and 21 deleted codes. For more on coding changes, see the Part B News blog.   

CMS published a press release and fact sheet on April 23 to accompany the proposed rule. Comments are due by June 24. The rule is scheduled to be published in the Federal Register on May 3.

This article originally appeared on Revenue Cycle Advisor.