News Alert: CMS Issues IPPS Proposed Rule

Original story posted on: May 12, 2020

A familiar development emerges amid unprecedented regulatory change.  

Amid unprecedented regulatory upheaval recently instilled by the ongoing COVID-19 viral pandemic, federal officials unveiled a familiar sight earlier this week, when they issued a new proposed rule for the Inpatient Prospective Payment System (IPPS).

The Centers for Medicare & Medicaid Services (CMS) rule offers payment policy updates for acute-care hospitals operating under the IPPS, as well as long-term care hospitals (LTCHs) and the Prospective Payment System under which they operate, all applicable for the 2021 fiscal year.

“The Trump Administration has provided extensive flexibility to help hospitals meet the needs of their communities during the COVID-19 pandemic. The CMS Hospital Without Walls initiative empowers local hospitals and healthcare systems to expand their physical spaces, telehealth capabilities, and staff to care for people with coronavirus,” CMS Administrator Seema Verma said in a statement. “Today’s payment rate announcement focuses on what matters most to help hospitals conduct their business and receive stable and consistent payment.”

Notably, CMS is proposing a separate new hospital payment category for Chimeric Antigen Receptor (CAR) T-cell therapy, better known as CAR-T: the first-ever gene therapy, which uses a patient’s own genetically modified immune cells to treat people with certain types of cancer, instead of additional chemotherapy or other types of treatment paid for under the IPPS.

Currently, officials explained, CAR-T hospital cases are paid at the same rate as bone marrow transplants, and qualify for additional payments through a temporary new technology add-on payment for high-cost cases that is set to expire this year. The new inpatient hospital payment category/Medicare Severity Diagnostic Related Group (MS-DRG) for CAR-T will “provide a predictable payment rate for hospitals administering the therapy,” CMS said in a press release, marking what the agency described as “another example of (their) commitment to ensuring that beneficiaries have access to the latest medical innovation and to removing barriers to medical innovation across our healthcare system.”

The rule also features proposals for what CMS described as removing barriers to new antimicrobials: antibiotics meant to treat drug-resistant infections. Medicare beneficiaries account for the majority of new diagnoses and resulting deaths resulting from such infections, officials said, so to support access to these antibiotics for Medicare beneficiaries, CMS is proposing changes for the new technology add-on payment (NTAP): an additional payment to hospitals for cases using eligible high-cost technologies. Officials also said that providers using drugs approved by the Food and Drug Administration (FDA) under the Limited Population Pathway for Antibacterial and Antifungal Drugs (LPAD pathway) can seek an NTAP through an alternative NTAP pathway for certain antimicrobial products – the same streamlined pathway made available last year for drugs designated by the FDA as Qualified Infectious Disease Products (QIDPs).

Finally, CMS is proposing to collect a summary of certain data already required to be disclosed by the agency’s 2019 price transparency rule – specifically, hospitals’ median payer-specific negotiated inpatient service charges for Medicare Advantage organizations and third-party payors.

To review a fact sheet on the various provisions of the proposed rule (CMS-1735-P), go online to The proposed rule also can be downloaded in its entirety from the Federal Register at

Mark Spivey

Mark Spivey is a national correspondent for,, and Auditor Monitor who has been writing and editing material about the federal oversight of American healthcare for more than a decade. He can be reached at

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