CMS Issues Inpatient Hospital and LTCH Proposed Rules

The Centers for Medicare & Medicaid Services has 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. 

In the proposed rule,  CMS projects that general acute care hospital payment rates will increase by 2.3 percent in FY 2013.  The 2.3 percent is a net update after inflation, improvements in productivity, a statutory adjustment factor, and adjustments for hospital documentation and coding changes.   Payments for IPPS hospitals are expected to increase by approximately 0.9 percent or $904 million in FY 2013.  CMS also projects that LTCH payments will increase by approximately $100 million or 1.9 percent.

The proposed rule makes a number of changes to payment policies and rates, including:

• Adding the Medicare spending per beneficiary measure to the Hospital VBP Program, which would affect all Part A and Part B payments beginning in FY 2015;

• Establishing a new methodology and the payment adjustment factors for excess readmissions for heart attack, heart failure and pneumonia, and

• Several changes to the LTCH payment system that would:
oExtend the existing moratorium on the “25 percent threshold” policy for one year;

o Apply a 1.3 percent reduction to the first year of a proposed three-year phase-in of a budget neutrality adjustment, so that the proposed adjustment will not apply to discharges occurring on or before Dec. 28, 2012; and,

o Include the IPPS comparable amount payment option for discharges occurring on or after Dec. 29, 2012 in Medicare payments for very short stays in LTCHs.  

To read the press release and fact sheets, go to:  http://www.cms.gov/Newsroom/Newsroom-Center.html.

The proposed rule can be downloaded from the Federal Register at: http://www.ofr.gov/inspection.aspx?AspxAutoDetectCookieSupport=1.