IPPS Proposed Rule: What’s in, What’s Out

There are winners and losers in the recently posted proposed rule.

Weighing in at 1,824 pages, the Inpatient Prospective Payment System (IPPS) proposed rule for the 2020 fiscal year had something for everyone – and, in some cases, nothing at all.

To the latter point, there’s no doubt that Ronald Hirsch, MD, vice president of the Regulations and Education Group at R1, RCM and a prominent panelist on Monitor Mondays, was somewhat disappointed when he read the proposed rule from the Centers for Medicare & Medicaid Services (CMS), released last Tuesday.

“I diligently searched for references to the two-midnight rule or the RACs (Recovery Audit Contractors), or other auditors or rules affecting the Medicare Advantage payer abuses, and found none,” Hirsch told the Monitor Mondays audience. “Boring. But then I looked a bit closer and did find some pretty interesting things.”

“Last week you heard me talk (on Monitor Mondays) about how the readmission reduction program is finally making adjustments to account for a hospital’s (percentage) of patients with Medicare and Medicaid as a surrogate for the social determinants of health (SdoH),” Hirsch said. “That’s a good first step. But in this rule, CMS took a second step: they are proposing to establish Z59.0 homelessness as a CC (complication and comorbidity) in coding.”

Hirsch then reminded the audience about other SDoH authorities prepared to speak to the issue of the Z codes on the broadcast, mentioning Ellen Fink Samnick and Diane Iversen and saying that they, along with himself, have been advocating for getting all of the social determinants coded onto claims – but also noting that the concept was not well-received by some, since it would adversely affect coding productivity with no financial benefit.

“That argument will soon be meritless,” Hirsch said. “Coding homelessness will be worth thousands of dollars in added reimbursement, at least for Medicare patients. But now that CMS has taken the first two steps, they still need to learn to walk by recognizing that many more social determinants influence the cost of care, and establishing them as CCs or even MCCs.”

The proposed rule also makes changes to the wage index, a factor applied to payments to account for the cost of employing staff, according to Hirsch. He said rural hospitals may see a significant boost in their wage index, noting that this is “great, but since this must be budget neutral, for some suburban and urban hospitals this may not be pretty, as their wage index drops.”

Hirsch also noted that CMS is proposing to impose more restrictions on long-term acute care hospitals (LTACHs) by lowering their payments if they don’t exceed 50 percent of their patients meeting the ICU or ventilator requirement.

“This bodes poorly for patients who need long-term acute care but weren’t in an ICU or on a vent,” Hirsch said. “I’m sad to see CMS deprive these patients of the excellent specialized care they can get in LTACHs.”

Facebook
Twitter
LinkedIn

Chuck Buck

Chuck Buck is the publisher of RACmonitor and is the program host and executive producer of Monitor Monday.

Related Stories

Leave a Reply

Please log in to your account to comment on this article.

Featured Webcasts

Inpatient Ulcers and Gangrene: Avoid FY 2027 ICD-10-CM Coding, Sequencing, and Documentation Errors

Avoid costly inpatient coding errors involving ulcers and gangrene. This practical FY 2027 ICD-10-CM webcast clarifies pressure injury staging, non-pressure ulcer severity, diagnosis sequencing, documentation requirements, and POA reporting. Through real-world cases, gain the confidence to make defensible coding decisions, reduce denials, strengthen compliance, and support accurate reimbursement.

November 4, 2026

One Chart, Five Truths: How CDI Prevents the Same Diagnosis from Becoming Five Different Outcomes

What happens when everyone reviews the same chart, but reaches a different conclusion? In this case-based clinical documentation integrity (CDI) webcast, Penny Jefferson examines how documentation involving clinical support, timing, causation, linkage, and terminology can produce very different outcomes for ICD-10 coding, reimbursement, quality, risk adjustment, medical necessity, denials, and compliance. Using cases involving postoperative respiratory failure, severe malnutrition, and encephalopathy, you’ll learn the practical CLEAR framework to help attendees learn to evaluate whether a diagnosis is codeable, consistent, specific, reportable, and ultimately defensible across the different teams and systems that rely on the medical record.

September 30, 2026

Mastering Spinal Fusion Coding for Inpatient Facilities: ICD-10-PCS Precision, Documentation, and MS-DRG Impact

Spinal fusion cases are among the most complex inpatient procedures to code, where even minor ICD-10-PCS errors can affect MS-DRG assignment, reimbursement, compliance, and audit outcomes. This practical webcast provides a step-by-step framework for interpreting operative reports, assigning accurate ICD-10-PCS codes, recognizing documentation gaps, and confidently coding complex fusion procedures. You’ll leave with practical tools that improve coding accuracy, reduce denials and audit risk, and strengthen documentation-driven reimbursement decisions.

July 29, 2026

AI, Audits, and the Future of the Revenue Cycle

Artificial intelligence is rapidly transforming healthcare revenue cycle operations, from coding and auditing to compliance and denials. Join industry leaders Pam Warren (MaineHealth) and Raemarie Jimenez (AAPC) for a live fireside chat exploring how AI is changing workflows, workforce roles, payer-provider dynamics, and compliance risk—and what organizations should be doing now to prepare.

Webcast Only Available On ICD10monitor Subscription – Subscribe Below

June 17, 2026

Trending News

Featured Webcasts

Radiation Oncology Fundamentals: Coding, Billing & Compliance for Hospital Outpatient & Professional Services

Join Michael Calahan, PA, MBA for this radiation oncology coding and compliance webcast as he explains the fundamentals of coding, billing, reporting, and documentation for hospital outpatient and professional services. Learn how the 2026 radiation therapy coding changes affect current practices, how to distinguish technical and professional services, and how to address bundling, units, frequency, modifiers, and documentation requirements. Michael will also help you identify radiation oncology coding and billing vulnerabilities that could lead to denials, overpayments, repayment demands, or federal audit exposure.

October 20, 2026

Preparing for 2027: Inpatient & Outpatient Policy Changes for Case Management and Utilization Review

The 2027 CMS policy changes will impact case management, utilization review, reimbursement, and patient status decision-making long before they officially take effect. Join nationally recognized physician advisor Dr. Ronald Hirsch as he explains the finalized and proposed inpatient and outpatient rule changes, expanding bundled payment initiatives, payment updates, and evolving payer expectations. Gain practical guidance to help your organization prepare early, strengthen compliance, reduce reimbursement risk, and confidently navigate the transition to 2027.

September 17, 2026

The Two-Midnight Rule: Strengthening Compliance Through the Fundamentals, 2026 Updates, & 2027 Proposed Changes.

The Two-Midnight Rule continues to be one of Medicare’s most closely monitored compliance areas and now the rules are changing again. Join compliance expert Michael Calahan for a practical review of the latest 2026 policy updates, the proposed 2027 OPPS changes affecting inpatient-only procedures, and the best practices hospitals need to reduce audit risk, strengthen admission decisions, and protect reimbursement. Leave with actionable strategies you can immediately apply to improve compliance and confidently prepare for increased federal and Medicare Advantage scrutiny.

August 11, 2026

Trending News

Celebrate Lab Week with MedLearn! Sign up to win one year of our Laboratory All Access Pass! Click here to learn more →

Have a Medicare regulation question you’d love Dr. Hirsch to answer? Now is your chance! CLICK HERE to learn more→

Happy National Doctor’s Day! Learn how to get a complimentary webcast on ‘Decoding Social Admissions’ as a token of our heartfelt appreciation! Click here to learn more →

This Memorial Day, we honor those who gave all for our freedom. Take 20% off sitewide through May 29 with code MEMORIAL26 at checkout

CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 1 with code CYBER25

CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 2 with code CYBER24