Medicare Program; CY 2017 Inpatient Hospital Deductible and Hospital and Extended Care Services Coinsurance Amounts
SUMMARY: This notice announces the inpatient hospital deductible and the hospital and extended care services coinsurance amounts for services furnished in calendar year (CY) 2017 under
DATES: Effective Date: This notice is effective on
FOR FURTHER INFORMATION CONTACT:
SUPPLEMENTARY INFORMATION: Section 1813 of the Social Security Act (the Act) provides for an inpatient hospital deductible to be subtracted from the amount payable by
II. Computing the Inpatient Hospital Deductible for CY 2017
Section 1813(b) of the Act prescribes the method for computing the amount of the inpatient hospital deductible. The inpatient hospital deductible is an amount equal to the inpatient hospital deductible for the preceding CY, adjusted by our best estimate of the payment-weighted average of the applicable percentage increases (as defined in section 1886(b)(3)(B) of the Act) used for updating the payment rates to hospitals for discharges in the fiscal year (FY) that begins on
Under section 1886(b)(3)(B)(i)(XX) of the Act, the percentage increase used to update the payment rates for FY 2017 for hospitals paid under the inpatient prospective payment system is the market basket percentage increase, otherwise known as the market basket update, reduced by 0.75 percentage points (see section 1886(b)(3)(B)(xii)(V) of the Act), and an adjustment based on changes in the economy-wide productivity (the multifactor productivity (MFP) adjustment) (see section 1886(b)(3)(B)(xi)(II) of the Act). Under section 1886(b)(3)(B)(viii) of the Act, for FY 2017, the applicable percentage increase for hospitals that do not submit quality data as specified by the Secretary of the
Under section 1886 of the Act, the percentage increase used to update the payment rates for FY 2017 for hospitals excluded from the inpatient prospective payment system is as follows:
* The percentage increase for long term care hospitals is the market basket percentage increase reduced by 0.75 percentage points and the MFP adjustment (see sections 1886(m)(3)(A) and 1886(m)(4)(F) of the Act). In addition, these hospitals may also be impacted by the quality reporting adjustments and the site-neutral payment rates (see sections 1886(m)(5) and 1886(m)(6) of the Act).
* The percentage increase for inpatient rehabilitation facilities is the market basket percentage increase reduced by 0.75 percentage points and the MFP adjustment (see sections 1886(j)(3)(C) and 1886(j)(3)(D)(v) of the Act). In addition, these hospitals may also be impacted by the quality reporting adjustments (see section 1886(j)(7) of the Act).
* The percentage increase used to update the payment rate for inpatient psychiatric facilities is the market basket percentage increase reduced by 0.2 percentage points and the MFP adjustment (see sections 1886(s)(2)(A)(i), 1886(s)(2)(A)(ii), and 1886(s)(3)(E) of the Act). In addition, these hospitals may also be impacted by the quality reporting adjustments (see section 1886(s)(4) of the Act).
* The percentage increase for other types of hospitals excluded from the inpatient hospital prospective payment system (cancer hospitals, children's hospitals, and hospitals located outside the 50 States, the
The Inpatient Prospective Payment System market basket percentage increase for FY 2017 is 2.7 percent and the MFP adjustment is -0.3 percentage point, as announced in the final rule that appeared in the
To develop the adjustment to reflect changes in real case-mix, we first calculated an average case-mix for each hospital that reflects the relative costliness of that hospital's mix of cases compared to those of other hospitals. We then computed the change in average case-mix for hospitals paid under the
Section 1813 of the Act requires that the inpatient hospital deductible be adjusted only by that portion of the case-mix change that is determined to be real. Real case-mix is that portion of case-mix that is due to changes in the mix of cases in the hospital and not due to coding optimization. Over the past several years, we have seen case mix increases of about 0.5 percent per year. (In some years there were larger increases in case mix due to much lower discharges for that year.) For 2016, we expect the increase in real case mix to continue to be 0.5 percent. Most of the observed FY 2016 case mix increase is likely due to artifacts of the implementation of ICD-10 which affects the calculated case mix level, but does not measure the actual increase in real case mix. Therefore, we expect that much of the change in average case-mix will not be real and estimate that this real change will be 0.5 percent.
Thus as stated above, the estimate of the payment-weighted average of the applicable percentage increases used for updating the payment rates is 1.70 percent, and the real case-mix adjustment factor for the deductible is 0.5 percent. Therefore, using the statutory formula as stated in section 1813(b) of the Act, we calculate the inpatient hospital deductible for services furnished in CY 2017 to be
III. Computing the
--This is a summary of a
Notice.
RIN Number: "RIN 0938-AS70"
Citation: "81 FR 80060"
Document Number: "CMS-8062-N"
Federal Register Page Number: "80060"
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