CMS Proposal Promotes Better Inpatient Care
Last week, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would update Medicare payment policies and rates for inpatient stays to general acute care hospitals paid under the Inpatient Prospective Payment System (IPPS) and long-term care hospitals (LTCHs) paid under the LTCH Prospective Payment System (PPS). This proposed rule is a continuation of efforts to promote improvements in hospital care that will lead to better patient outcomes while slowing the long-term health care cost growth.
"The proposed rule would implement key elements of the Affordable Care Act's value-based purchasing program as well as the hospital readmissions reduction program," says CMS Acting Administrator Marilyn Tavenner. "It also establishes the groundwork for extending Medicare's quality reporting programs beyond general acute care hospitals to other types of facilities. It is part of a comprehensive strategy to use Medicare's payment systems to foster better care and better value in all settings, thereby reducing overall Medicare spending."
The CMS is projecting that payment rates to general acute care hospitals will increase by 2.3 percent in FY 2013 - a net update after inflation, improvements in productivity, a statutory adjustment factor, and adjustments for hospital documentation and coding changes. The rate increase, with other policies in the proposed rule and projected utilization of inpatient services, would increase Medicare's operating payments to acute care hospitals by approximately 0.9 percent in FY 2013. After taking into account the expiration of certain statutory provisions providing special temporary increases in payments to hospitals and other proposed changes to IPPS payment policies, CMS projects that total Medicare spending on inpatient hospital services will increase by about $175 million in FY 2013.
LTCH payments are also expected to increase by approximately $100 million or 1.9 percent in FY 2013 under the proposed rule, and the CMS is proposing an annual update to LTCH payment rates of 2.1 percent. In addition to the update for inflation (adjusted as required by the statute), the 2.1 percent update to LTCH payment rates will be reduced by approximately 1.3 percent to 0.8 percent for the "one-time" budget neutrality adjustment for discharges on or after Dec. 29.
In the rule, CMS is proposing:
- A one-year extension of the existing moratorium on the "25 percent threshold" policy, pending results of an on-going research initiative to re-define the role of LTCHs in the Medicare program.
- To apply an approximate 1.3 percent reduction (first year of three-year phase-in) for a one-time prospective budget neutrality adjustment. The proposed reduction would not apply to discharges occurring on or before Dec. 28 because the law prohibits its application before that date. The budget neutrality adjustment reduces the update from 2.1 percent to 0.8 percent.
- To reduce Medicare payments for very short stay cases in LTCHs to the IPPS comparable per diem amount payment option for discharges occurring on or after Dec. 29. The law prohibits application of this policy prior to that date.
The proposed rule can be downloaded from the Federal Register at: https://s3.amazonaws.com/public-inspection.federalregister.gov/2012-09985.pdf and will appear in the May 11 Federal Register. The CMS will accept comments on the proposed rule until June 25 and will respond to all comments in a final rule issued by Aug. 1.