For FY 2021, CMS projects the rate increase, together with other proposed changes to IPPS payment policies, will increase IPPS operating payments by approximately 2.5%. Proposed changes in uncompensated care payments, new technology add-on payments, and capital payments will decrease IPPS payments by approximately 0.4%, according to the proposed rule. Therefore, CMS estimates a total increase in overall IPPS payments of approximately 1.6%.
On May 11, CMS issued its inpatient prospective payment system (IPPS) proposed rule and policy changes for fiscal year (FY) 2021. The proposed rule includes ambitious policy changes showcasing CMS’ commitment to “transform the healthcare delivery system through competition and innovation while providing patients with better value and results.”
Prior to 1983, Medicare reimbursed based on actual charges that inpatient healthcare facilities billed (often referred to as “fee-for-service” payments). The more tests, procedures, and services ordered by physicians, the more an organization was paid. This created the potential for unnecessary or excessive services, contributing to rising healthcare costs and the possibility of depleting Medicare funds.
PEPPER is an acronym for the Program for Evaluating Payment Patterns Electronic Report . The PEPPER was originated by the Hospital Payment Monitoring Program (HPMP) and Quality Improvement Organizations.
