On September 2, 2020, the Centers for Medicare and Medicaid Services (“CMS”) filed the unpublished version of the forthcoming Inpatient Prospective Payment Systems (“IPPS”) Final Rule for 2021. One of the more controversial provisions in the IPPS Final Rule finalizes CMS’ proposal, with modification, to require hospitals to report certain market-based payment rate information on their Medicare cost report for cost reporting periods ending on or after January 1, 2021. Specifically, this includes requiring hospitals to report on the Medicare cost report, the median payer-specific charge that the hospital has negotiated with all of its Medicare Advantage organization (“MAO”) payers, by Medicare Severity Diagnosis Related Groups (“MS-DRGs”) (the classification system by which hospitals are paid for patients’ hospital stays). The payer-specific negotiated charges used by hospitals to calculate these medians would be the payer-specific negotiated charges for service packages that hospitals are already required to make public under the requirements finalized in the Hospital Price Transparency Final Rule and, therefore, CMS argues that “the additional calculation and reporting of the median payer-specific negotiated charge will be less burdensome for hospitals.” In addition, CMS also finalized the market-based MS-DRG relative weight methodology, which incorporates this market-based rate information, to inform its calculations for inpatient hospital rates beginning in 2024.
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