Proposed CMS Updates to the Inpatient Prospective Payment System and the Potential Impact on Margins

June 2020

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In an environment already ripe with challenges, healthcare organizations and leaders will still have to navigate changing Medicare policies and updated payment rates, paying even closer attention to the impact they could have on margins. In our latest insight, we explore recently proposed updates to the Inpatient Prospective Payment System (IPPS). Highlights include:
  • Proposed increases to IPPS payments for FY 2021 are estimated to be $2.07 billion
  • Uncompensated care payments are estimated to decrease by $534 million
  • Proposed Medicare cost report data requirements to bolster price transparency
  • Changes that would codify long-standing Medicare bad debt policies with the goal of decreasing bad debt appeals
  • Proposed continuation of policy to decrease disparities between low-income wage index and high-income wage index hospitals
  • Proposed changes to Hospital Inpatient Quality reporting pay