CMS’s 2018 IPPS Proposed Rule and RFI: Signaling the Trump Administration’s Deregulation Agenda

On April 14, the Centers for Medicare & Medicaid Services (CMS) released its 2018 Inpatient Prospective Payment System (IPPS) and Long-Term Acute Care Hospital Prospective Payment System proposed rule as well as a request for information (RFI) to solicit input on ways to improve CMS’s transparency, flexibility, program simplification, and innovation.

Taking a backseat to the continued debate on the repeal and replacement of the Affordable Care Act (ACA), the 1,832-page proposed rule received scant media coverage and rather brief responses from hospital groups. But as Speaker of the House Paul Ryan (R-Wis.) articulated in early March, the process to repeal and replace the ACA involves three phases including actions  by the Department of Health & Human Services (HHS) and other administrative bodies, so viewing CMS’s proposed rule through the lens of legislative change could yield some insights into the Trump administration’s agenda for health reform.

The rule projects more Medicare spending on inpatient hospital services and less on long-term acute care in FY18. After factoring in a variety of payment adjustments, CMS projects an increase to IPPS operating payments of 1.7 percent. Proposed changes in uncompensated care payments will increase IPPS operating payments by an additional 1.2 percent, resulting in a combined increase in IPPS operating payments of 2.9 percent—which coincidentally matches the percentage increase for FY17. In total, CMS projects that Medicare spending on inpatient hospital services at over 3,300 acute care hospitals will rise by $3.1 billion in FY18. In contrast, for approximately 420 long-term acute care hospitals, payments will decline by $173 million or 3.75 percent in FY18, which, according to CMS, is largely due to the continued phase in of the dual payment rate system.

The rule also proposes reduced clinical quality measure (CQM) reporting requirements for hospitals that have implemented electronic health records, including fewer quarters and fewer CQMs to be reported.

In its RFI, CMS is soliciting ideas for regulatory, policy, practice and procedural changes, such as recommendations regarding payment system redesign, elimination or streamlining of reporting, monitoring and documentation requirements, and operational flexibility. CMS also asks how it can simplify rules and policies for beneficiaries, clinicians, providers, and suppliers.

In the proposed rule and RFI, CMS (and the Trump administration by association) presents itself as sympathetic to the plight of healthcare providers weighed down by regulatory burdens. A message advocating deregulation is repeated throughout the rule, as the word “burden” appears an astounding 286 times in the document.

HHS Secretary Tom Price is well known for being a “doctor’s doctor” and pressing for less governmental interference in physicians’ practice of medicine. Echoing his view, CMS administrator Seema Verma said in the press release announcing the proposed rule: “Through this proposed rule we want to reduce burdens for hospitals so they can focus on providing high-quality care for patients. Medicare is better able to support the work of dedicated hospitals and clinicians who provide the care that people need with these more flexible and simplified approaches.”

Ken Perez is vice president of healthcare policy, Omnicell, Inc., Mountain View, Calif., and a member of HFMA’s Northern California Chapter.