​The Centers for Medicare and Medicaid Services (CMS) on April 14, 2017, issued a proposed rule to its hospital inpatient prospective payment system that should increase payments by approximately 1.7% in fiscal year (FY) 2018 after accounting for inflation and other required adjustments. The goal of the rule is to reduce regulatory burdens, support patient-doctor relationships, and support "transparency, flexibility, and innovation in the delivery of care," CMS said in an April 14, 2017, fact sheet. The proposed changes would affect discharges occurring on or after October 1, 2017. Under the rule, payments are expected to increase by 2.9% to hospitals that demonstrated meaningful use of electronic health records in FY 2016. CMS is also proposing an increase of 0.46% to restore some of the cuts made as a result of the American Taxpayer Relief Act of 2012 and a cut of 0.6% to remove the one-time temporary adjustment made in FY 2017 to restore the two-midnight policy cuts (see HRC Alerts, April 20, 2016). Payment adjustments will also include continued penalties for excess readmissions, continuing of a 1% penalty for the worst-performing hospitals and continued adjustments based on upward and downward movement in the Hospital Value-Based Purchasing Programs. To estimate the overall rate of uninsured people, CMS is proposing to use data from its National Health Expenditure Accounts instead of the Congressional Budget Office, which it says would increase payments by $1 billion to Medicare disproportionate-share hospitals. CMS also proposed using data from FY 2014 cost reports on Worksheet S-10 to determine the distribution of uncompensated care payments. CMS said it welcomes feedback on its proposal and issued a request for information regarding the proposed rule. Comments will be accepted through June 13, 2017. The American Hospital Association weighed in on the proposal in an April 5, 2017, letter, expressing several concerns, including a question about the accuracy of the S-10 data.

HRC Recommends: Risk managers, quality assurance managers, and others involved in quality measurement and reporting must understand the measures they are required to report on and ensure that data to fulfill those requirements are being captured and transmitted appropriately. The data should also be used internally to identify opportunities for improvement regarding patient care and outcomes and with regard to reimbursement. Risk managers can demonstrate their value to an organization by staying abreast of regulatory developments and serving as facilitators to help their organizations identify and manage the risks that arise from CMS's regulatory initiatives.