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On Aug. 2, CMS finalized policy changes to spur competition and innovation that will help deliver improved care and outcomes at a better value to patients. The final rule updates Medicare payment policies for hospitals under the Inpatient Prospective Payment System (IPPS) and the Long-Term Care Hospital (LTCH) Prospective Payment System (PPS) for fiscal year 2020 and advances two key CMS priorities—“Rethinking Rural Health” and “Unleashing Innovation” by making historic changes to how Medicare pays hospitals. This final rule:

  • Increases the wage index for certain low-wage index hospitals, including many rural hospitals
  • Increases Medicare add-on payments for high-cost eligible new technologies from 50% to 65%
  • Clarifies policies on “substantial clinical improvement” to qualify for new technology add-on payments
  • Provides an alternative pathway where breakthrough devices are no longer required to demonstrate evidence of “substantial clinical improvement” to qualify for new technology add-on payments
  • Provides an alternative pathway where qualified infectious disease products are no longer required to meet the “substantial clinical improvement” criteria for technology add-on payments, which are increased from 50% to 75%

The changes go into effect Oct. 1 and will remain in effect until Sept. 30, 2029.

To read the full text of final rule, click here.

To read the fact sheet on final rule, click here.