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An Analysis and Commentary on Federal Health Care Issues by Larry Goldberg

CMS Releases Final FY 2018 IPPS Rules

MB is 2.7 percent – Offsets: (-0.6%) for productivity (-0.75%) for ACA mandate • Subtotal = 1.35 percent increase (+0.4588) for documentation and coding per 21st Century Cures Act and MACRA.

To calculate FY 2018 rates, start with current Careful - CMS corrected FY 2017 rates since the August 22, 2016 Final Rule See October 5th, 2016 retroactive to October 1 via Federal Register notice Copy is at: https://www.gpo.gov/fdsys/pkg/FR-2016- 10-05/pdf/2016-24042.pdf //www.federalregister.gov/d/2016-240.

Current FY 2017 IPPS Rates 6 FY 2018 regarding failures to report quality and be a meaningful EHR user No Quality – • ¼ of market basket [0.25 x 2.7 = -0.675] No EHR • ¾ of market basket [0.75 x 2.7 = -2.025] Failure to not report quality or be an EHR user is in effect a zero rate of increase w/o other adjustments.

Quality & EHR Reductions 7 Labor Share CMS has revised & rebased market basket computation Results in major change to large urban labor share “Large” Urban areas – those with wage index greater than 1.000 – would be at 68.3 percent – down from 69.6 “Other” areas with wage index values equal to or less than 1.000 remain at 62.0 percent by law Will impact all via budget neutrality.

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