CMS wants to increase Medicare payments for inpatient hospital services by 1.6%—or about $2 billion—in 2021.
The agency's proposed inpatient prospective payment system, or IPPS, rule would increase operating payments by about 2.5%. General acute hospitals that are meaningful use EHR users and fulfill the requirements of the inpatient quality reporting program will see their operating payments rise 3.1%.
Changes to uncompensated care payments, add-on payments for new technologies and capital payments would lower IPPS payments by about 0.4%.
But some of the proposals aren't sitting well with providers, particularly the continued push for hospitals to disclose their negotiated contract terms. While CMS claims the disclosures will improve price transparency, the American Hospital Association said the plan won't reach that goal.
"The disclosure of privately negotiated rates will not further CMS' goal of paying market rates that reflect the cost of delivering care," AHA Executive Vice President Tom Nickels said in a statement. "These rates take into account any number of unique circumstances between a private payer and a hospital and simply are not relevant for fixing fee-for-service Medicare reimbursement."
CMS is also proposing a new diagnosis-related group, or DRG, for CAR T-cell cancer therapy, and a technology add-on payment for some antimicrobial products to address antimicrobial resistance.
"Currently, CAR-T hospital cases are paid at the same rate as bone marrow transplants and qualify for additional payments through the temporary new technology add-on payment for high-cost cases that's set to expire this year," CMS said in a statement.
The agency wants to collect information about the inpatient rates that hospitals negotiate with Medicare Advantage organizations and third-party payers. It's the same information CMS asked for last year in its contentious price transparency rule.
Comments on the proposed rule are due June 10.
The Alliance for Regenerative Medicine, biotech companies and other stakeholders had asked CMS to create a new DRG for CAR T-cell cancer therapy because, even with its soon-expiring add-on payment, reimbursement was well below the treatment and hospitalization costs. They argued that the change would improve access to the treatment and incentivize continued production, research and development.
CMS' proposed new technology add-on payments focus on antimicrobial products that have gone through the Food and Drug Administration's approval process under the limited population pathway for antibacterial and antifungal drugs.
The process "encourages the development of safe and effective drug products that address unmet needs of patients with serious bacterial and fungal infections," CMS said in a fact sheet.
The treatments don't need to meet the criteria for substantial clinical improvement because the FDA thinks that they're new and don't have any existing competitors.
CAR T-cell therapy is "a type of treatment in which a patient's T-cells (a type of immune system cell) are changed in the laboratory so they will attack cancer cells," according to the National Cancer Institute.
DRG payments cover all charges associated with a patient's inpatient stay, including services delivered by an outside provider. Each DRG categorizes patients based on their diagnosis, treatment and how long they stay in the hospital. Other DRG factors include comorbidities and complications, age and sex.
Under CMS' inpatient prospective payment system, the agency may elect to create a new technology add-on payment, or NTAP, for new, high-cost treatment technologies. To qualify for an add-on payment, a technology must significantly improve clinical outcomes and can't be too similar to existing technologies. NTAPs can last for up to three years.
A single, bundled payment covers all costs for acute care services during a patient's inpatient hospital stay under Medicare's IPPS.
The federal government introduced the IPPS in 1983 to incentivize hospitals to manage healthcare costs more efficiently. It was an early attempt to move the healthcare system away from fee-for-service medical care, now known as value-based payment.