Medicare Changes

April 29, 2019 By: Bob Atlas

The past two weeks have seen a lot of Medicare-related news. For starters, the Centers for Medicare & Medicaid Services (CMS) released a series of proposed Medicare payment rules for federal fiscal year 2020, including:

  • 2.5% increase to skilled nursing facility payments
  • 2.5% increase to inpatient rehabilitation facilities payment
  • 1.7% increase to inpatient psychiatric hospital rate
  • 0.9% increase to long-term care hospital rate
  • 2.7% increase to hospice rate
  • 3.7% increase to inpatient hospital payments

While the inpatient hospital rates don’t directly apply to Maryland, some updates will impact providers here and could influence the thinking of our payment regulators. And, the changes do directly impact our post-acute care partners — altering the nature of payments and adding quality reporting requirements. We will continue to assess how all these policy changes may affect Maryland’s hospitals and health systems. We’re actively in discussions with the state regulators to mitigate potential issues.

We also learned last week that the Medicare trust fund, which covers hospital care, is projected to be exhausted by 2026; and that Medicare spending is expected to reach 5.9% of gross domestic product by 2038 — up from 3.7% last year. Finally, CMS announced several new primary care payment models.

These moves indicate that CMS is pushing the shift to value-based care. As always, we’ll keep you informed and share our ongoing analysis.