IPPS pays acute-care hospitals a predetermined rate per discharge based on the assigned MS-DRG. The annual IPPS rule updates rates, NTAPs, and DRG reassignments - closely watched by MedTech. The IPPS proposed rule is usually released in April, with the final rule around August and changes taking effect on October 1, the start of the federal fiscal year. Payment is the DRG relative weight multiplied by a standardized amount, adjusted for local wages and add-ons such as teaching and disproportionate share payments. Outlier payments cover unusually costly cases.

Why it matters

Comments to the annual IPPS proposed rule are a key advocacy lever for new device coverage and payment.

Common pitfalls

•Hospitals might not fully understand the specific documentation requirements for optimal MS-DRG assignment, potentially leading to under-reimbursement.
•MedTech manufacturers may over-estimate the impact of a new technology add-on payment (NTAP) without considering the broader IPPS payment structure.
•Failing to engage in the annual IPPS rulemaking process can result in missed opportunities for advocating for appropriate reimbursement of innovative devices.
•Misinterpreting the nuances of DRG assignments can lead to inaccurate financial forecasting for MedTech products used in inpatient settings.

Sources

CMS IPPS · CMS
42 CFR 412.2: Basis of payment · eCFR

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