FY21 Inpatient Prospective Payment System Final Rule Summary

On September 3, 2020, the Centers for Medicare & Medicaid Services (CMS) released its final rule describing federal fiscal year (FY) 2021 policies and rates for Medicare’s prospective payment systems for acute care inpatient hospitals (IPPS) and the long-term care hospital prospective payment system (LTCH PPS). The final rule will be published in the Federal Register on September 18, 2020.

The payment rates and policies described in the IPPS/LTCH final rule (CMS-1735-F) affect Medicare’s operating and capital payments for short-term acute care hospital inpatient services and services provided in long-term care hospitals paid under their respective prospective payment systems. The final rule also sets forth rate-of-increase limits for inpatient services provided by certain “IPPS-Exempt” providers, such as cancer and children’s hospitals, and religious nonmedical health care institutions, which are paid based on reasonable costs.