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The Centers for Medicare & Medicaid Services late today issued its hospital inpatient prospective payment system for fiscal year 2019.

The rule will increase rates by 1.85% in FY 2019 compared to FY 2018, after accounting for inflation and other adjustments required by law. The final rule includes an initial market-basket update of 2.9% for those hospitals that were meaningful users of electronic health records in FY 2017 and submit data on quality measures, less a productivity cut of 0.8% and an additional market-basket cut of 0.75%, as mandated by the Affordable Care Act. CMS also finalizes an increase of 0.5% to partially restore cuts made as a result of the American Taxpayer Relief Act of 2012 requirement that the agency recoup what it claims is the effect of documentation and coding changes from FYs 2010-2012.

Among other provisions:

• CMS finalizes its proposal to continue its three-year transition to using Worksheet S-10 data to determine the amounts and distribution of disproportionate share hospital uncompensated care payments, which began in FY 2018. The agency also will implement audits of the Worksheet S-10 data, expected to begin during fall 2018, as well as offer provider education and further refinement of Worksheet S-10 instructions. The agency calculates that DSH payments will increase by $1.5 billion in FY 2019 compared to FY 2018 due to, among other things, an increase in the percentage of the uninsured.
• CMS also took steps to address the high cost of providing chimeric antigen receptor t-cell (CAR T) therapy, approving two CAR T products for new technology add-on payments.
• Consistent with its Meaningful Measures initiative, CMS finalizes the removal of 18 measures from the inpatient quality reporting program that are “topped out,” no longer relevant, or where the cost of data collection outweighs the value. The agency also will “de-duplicate” 21 IQR measures, removing them from the IQR, but retaining them in other programs. However, CMS does not finalize its proposal to remove the safety measure domain from the hospital value-based purchasing program.
• CMS finalizes its proposal to require hospitals to publically post their charges in a machine readable format; hospitals will be required to update this information at least annually, or more often as appropriate.
• CMS finalizes its proposed changes to the Promoting Interoperability program that provide a new scoring approach and flexibility to meet meaningful use requirements.
• In addition, the agency finalizes an EHR reporting period of a minimum of any continuous 90-day period in both 2019 and 2020. CMS also clarifies actions that may be taken to vet and register apps chosen by patients.

AHA Executive Vice President Tom Nickels said, “There are a number of policies CMS finalized today that will reduce regulatory burden and help ensure America’s hospitals and health systems can continue to provide high-quality, efficient care for the patients and communities they serve … at the same time, there are additional policy changes, including those affecting the area wage index, that we are analyzing to determine their ultimate impact.”

The final rule will be published in the August 17 Federal Register and its provisions will take effect on Oct. 1.