IPPS Proposed Rule: Read Once, Then Take an Aspirin

by BakerHostetler
Contact

The Centers for Medicare and Medicaid Services (CMS) has set its sights on the quality of care during hospital inpatient stays and much, much more. On May 15, 2014, CMS published a proposed rule that would update Medicare payment policies and rates under the Inpatient Prospective Payment System and Long-Term Care Hospital Prospective Payment System (IPPS Rule) in fiscal year (FY) 2015. The following is a list of the top five things that you need to know about the proposed IPPS Rule.

1. Payment Updates

Overall, hospitals will see a net 1.3 percent increase in payments. This increase resulted from a market basket update of 2.7 percent reduced by: (1) 0.4 percent as a productivity adjustment; (2) 0.8 percent documentation and coding creep adjustment; and (3) 0.2 percent for a cut mandated by the Affordable Care Act (ACA). The 0.8 percent reduction was mandated by the American Taxpayer Relief Act of 2012 (ATRA). This continues CMS’s recoupment approach that began in FY 2014. Although unclear at this time, CMS notes that the agency can fulfill the ATRA cut requirements within the statutory four-year timeline by implementing additional cuts of 0.8 percent in FYs 2016 and 2017. If so, absent new cuts, hospitals should see a payment increase in 2018 once the recovery is complete.

Notwithstanding, hospitals that do not submit quality data or that were not meaningful users of electronic health records in FY 2013 will be subject to a 0.25 percent reduction. Additionally, hospitals that fail to meet both of these requirements will be subject to a 0.5 percent reduction.

The proposed rule sets a 0.8 percent increase in payments for Long-Term Care Hospitals (LTCHs). This includes a one-time budget neutrality adjustment of a 1.3 percent reduction. CMS believes this reduction accounts for overpayments in FY 2003, the first year of the prospective payment system (PPS) for LTCHs.

2. Quality of Care and Quality Reporting Changes

CMS proposes making several substantive changes to the Hospital Inpatient Quality Reporting (IQR) Program. CMS proposes to remove five measures from the IQR program for FY 2016 and subsequent years, which begins in calendar year 2015. CMS also proposes to remove 15 chart-abstracted measures for FY 2017 because the measures no longer discriminate among providers’ quality, although 11 of these measures are reincorporated as electronic reporting measures. In addition, CMS proposes adding 11 measures to the IQR program. Nine of these measures are new. Two of the measures, however, are not new, having been added back to the program as electronic reporting measures despite not providing significant quality of care differentiation. The agency also proposes to more closely align the data collection periods and deadlines for chart-abstracted and electronically reported measure data.

The IPPS Rule made changes to the Value Based Purchasing (VBP) program. First, it reduced the weight of the clinical process measures from ten percent to five percent, as the clinical process measures CMS used failed to provide sufficient quality of care differentiation. Second, for 2017, it proposed removing six clinical process measures, but will add three new measures related to infections and early elective deliveries. For 2019, CMS proposes adding a measure of hip and knee arthroplasty complications.

Finally, as required by the ACA, the Hospital Readmission Reduction Program (HRRP) penalty has been increased from two percent to three percent of base Medicare payments. In addition, the algorithm used to compute the readmission rate will be modified slightly.

3. Wage Index Geographic Update

CMS proposes utilizing the new Office of Management and Budget (OMB) definitions of “rural” and “urban” counties. The OMB updates area classifications every ten years using census data. The OMB recently updated its definitions in 2013, and CMS proposes to implement and adopt OMB’s new Core Based Statistical Areas (CBSAs). The changes will reassign some hospitals previously treated as rural hospitals under the prior OMB definitions to urban hospitals and vice-versa. CMS also proposes a transition payment period for those hospitals adversely impacted by reclassification.

4. Standard Charge Transparency

The IPPS Rule also reminds hospitals of their obligation to establish and make public a list of their standard charges for items and services. This statutory requirement is found in the ACA, but this appears to be one of the first times that CMS has publicly commented on the requirement. The agency additionally noted that hospitals can establish policies for allowing the public to view a list of standard charges in response to requests, instead of publishing a list of those charges.

5. Two-Midnight Rule

The two-midnight rule, established in last year’s IPPS rule, provides that inpatient stays lasting fewer than two midnights must be billed as outpatient services. The rule has been controversial and is subject to litigation by the American Hospital Association. Recognizing that hospitals continue to have concerns about the implementation of the rule, CMS invites feedback from providers to further define short inpatient hospital stays and determine an appropriate payment system for them. In addition, CMS solicits comments for suggested exceptions to the two-midnight rule.

CMS will accept comments on the proposed rule through July 14, 2014. The final rule is slated for publication in August 2014.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© BakerHostetler | Attorney Advertising

Written by:

BakerHostetler
Contact
more
less

BakerHostetler on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!