CMS Proposes Rules to Advance Rural Health and Increase Innovation

Samara Rosenfeld
APRIL 23, 2019
CMS

The Trump Administration today proposed a rule that would update Medicare payment policies for hospitals under the Inpatient Prospective Payment System and the Long-Term Care Hospital Prospective System for fiscal year 2020, according to a press release from the U.S. Centers for Medicare and Medicaid Services (CMS).

The proposed rule advances two key CMS priorities, “Rethinking Rural Health” and “Unleashing Innovation,” by proposing changes to the way Medicare pays hospitals.

CMS Administrator Seema Verma said that the payment changes will “help bring stability to rural hospitals and improve patients’ access to quality healthcare.”

The agency is proposing to increase the wage index of low wage index hospitals in an attempt to ensure that people living in rural areas have access to high quality and affordable healthcare.

Low wage index hospitals struggle to pay wages that allow them to climb to a higher wage index, which creates a spiral that increases the disparity in payments between high wage and low wage index hospitals. The hospitals located in areas with wages lower than the national average receive lower Medicare payment rates than those in areas higher than the average.

Along with CMS’ proposal to increase the wage of low index hospitals, the Trump Administration announced a proposal that would ensure that Medicare beneficiaries have access to a world-class healthcare system through medical technology. The Administration wants to unleash innovation and remove potential barriers to innovation and competition to expedite access to novel medical technologies.

Because Medicare’s payment systems have not contemplated transformative technologies that are coming to the private market, CMS is also proposing payment policy changes.

The agency is proposing to increase the new technology add-on payment, which provides hospitals with additional payments for cases with high costs involving new technology. CMS also wants to modernize payment policies for devices that meet the U.S. Food and Drug Administration’s breakthrough device designation.

CMS wants to waive for two years the requirement for evidence that the devices represent a “substantial clinical improvement,” so Medicare beneficiaries do not have to wait for access to the latest innovations.

“The Trump Administration is committed to addressing inequities in healthcare, which is why we are proposing historic Medicare payment changes that will help bring stability to rural hospitals and improve patients’ access to quality healthcare,” Verma said.   

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