CMS Releases Final FY 2021 Medicare Inpatient Prospective Payment System (IPPS) Regulations

October 2020

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Each year the Centers for Medicare & Medicaid Services (CMS) publishes the proposed and then final rules for the Inpatient Prospective Payment System (IPPS), updating Medicare payment regulations and rates. The final rule for FY 2021 was released on September 2, 2020.

Highlights include:
  • Increase in IPPS payments for FY 2021 is estimated to be $3.5 billion
  • Uncompensated care payments are estimated to decrease by $60 million
  • In an effort to bolster price transparency, changes have been made to Medicare cost report data requirements
  • Changes to Medicare bad debt policy to codify long standing policies to attempt to decrease Medicare bad debt appeals
  • Policy to decrease disparities between low income wage index and high-income wage index hospitals to be continued
  • Change to the pay for reporting Hospital Inpatient Quality Reporting program to use electronic filing submission of this Data