CMS gives hospitals $3 billion raise next year

The CMS is proposing a $3 billion raise to inpatient hospitals in fiscal year 2018.

The agency also plans to change the way it reimburses uncompensated care—a move that's been panned by the hospital industry.

Medicare Payment Advisory Commission suggested the idea, saying the change would distribute the funds in a more equitable fashion.

The CMS also projects that payments to long-term care hospitals would decrease by approximately 3.75%, or $173 million in FY 2018, based on the changes included in the proposed rule.

The agency will distribute roughly $7 billion in uncompensated care funds in fiscal year 2018. That's a bump of approximately $1 billion from the prior year. This change reflects the CMS' proposal to use new data to estimate the rate of uninsurance which calculates the total amount of uncompensated care payments available.

Safety net hospitals would also see a change in the way they receive disproportionate-share payments. The new formula relies mostly on the amounts of uncompensated care and charitable care each hospital claims on its Medicare cost report. Previously, it relied mostly on the number of Medicaid, dual-eligible and disabled patients each hospital served.

The agency proposed making the change previously, but hospitals lobbied against it, saying the formula was inaccurate. Some claimed it would favor hospitals that see large numbers of uninsured patients as those states didn't expand Medicaid.

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