IPPS Proposed Rule: What’s in, What’s Out

There are winners and losers in the recently posted proposed rule.

Weighing in at 1,824 pages, the Inpatient Prospective Payment System (IPPS) proposed rule for the 2020 fiscal year had something for everyone – and, in some cases, nothing at all.

To the latter point, there’s no doubt that Ronald Hirsch, MD, vice president of the Regulations and Education Group at R1, RCM and a prominent panelist on Monitor Mondays, was somewhat disappointed when he read the proposed rule from the Centers for Medicare & Medicaid Services (CMS), released last Tuesday.

“I diligently searched for references to the two-midnight rule or the RACs (Recovery Audit Contractors), or other auditors or rules affecting the Medicare Advantage payer abuses, and found none,” Hirsch told the Monitor Mondays audience. “Boring. But then I looked a bit closer and did find some pretty interesting things.”

“Last week you heard me talk (on Monitor Mondays) about how the readmission reduction program is finally making adjustments to account for a hospital’s (percentage) of patients with Medicare and Medicaid as a surrogate for the social determinants of health (SdoH),” Hirsch said. “That’s a good first step. But in this rule, CMS took a second step: they are proposing to establish Z59.0 homelessness as a CC (complication and comorbidity) in coding.”

Hirsch then reminded the audience about other SDoH authorities prepared to speak to the issue of the Z codes on the broadcast, mentioning Ellen Fink Samnick and Diane Iversen and saying that they, along with himself, have been advocating for getting all of the social determinants coded onto claims – but also noting that the concept was not well-received by some, since it would adversely affect coding productivity with no financial benefit.

“That argument will soon be meritless,” Hirsch said. “Coding homelessness will be worth thousands of dollars in added reimbursement, at least for Medicare patients. But now that CMS has taken the first two steps, they still need to learn to walk by recognizing that many more social determinants influence the cost of care, and establishing them as CCs or even MCCs.”

The proposed rule also makes changes to the wage index, a factor applied to payments to account for the cost of employing staff, according to Hirsch. He said rural hospitals may see a significant boost in their wage index, noting that this is “great, but since this must be budget neutral, for some suburban and urban hospitals this may not be pretty, as their wage index drops.”

Hirsch also noted that CMS is proposing to impose more restrictions on long-term acute care hospitals (LTACHs) by lowering their payments if they don’t exceed 50 percent of their patients meeting the ICU or ventilator requirement.

“This bodes poorly for patients who need long-term acute care but weren’t in an ICU or on a vent,” Hirsch said. “I’m sad to see CMS deprive these patients of the excellent specialized care they can get in LTACHs.”