CMS issued its inpatient prospective payment system (IPPS) proposed rule last week, and it includes more quality measures hospitals will need to meet in order to prevent revenue losses. 
The proposed rule would increase Medicare payments made to inpatient hospitals by 0.8% in fiscal year (FY) 2014, representing an overall $27 million increase. The slight bump comes after accounting for inflation and other adjustments required by law, including a 0.8% reduction that is being used to pay for the latest “doc fix”. However the biggest story from the proposed rule is the amount of quality improvement updates, which are beginning to overwhelm some experts. “When you start to add up the quality-oriented programs, it’s just a lot,” said Erik Johnson, senior vice president at advisory firm Avalere Health, told Modern Healthcare. First of all, CMS made updates to the Hospital Readmission Reduction Program. The rule would implement the expected increase to the maximum penalty for excess 30-day readmissions, which will be 2% in FY 2014. CMS also proposed adding two new conditions to the list of readmission measures for FY 2015: knee and hip implants and chronic obstructive pulmonary disorder (COPD). Also proposed for FY 2015 is a new hospital-acquired condition reduction program. Similar to the Hospital Readmission Reduction Program, the new program would penalize poor-performing hospitals by reducing their overall Medicare payment. However, under the Hospital-Acquired Condition Reduction Program, the lowest-performing 25% with regard to hospital-acquired conditions will be paid 99% of what they would otherwise be paid under the IPPS. Providers will have until June 25 to submit comments to CMS on the proposals. CMS will take the comments into account before releasing the final rule no later than August 1, 2013.
The proposed rule would increase Medicare payments made to inpatient hospitals by 0.8% in fiscal year (FY) 2014, representing an overall $27 million increase. The slight bump comes after accounting for inflation and other adjustments required by law, including a 0.8% reduction that is being used to pay for the latest “doc fix”. However the biggest story from the proposed rule is the amount of quality improvement updates, which are beginning to overwhelm some experts. “When you start to add up the quality-oriented programs, it’s just a lot,” said Erik Johnson, senior vice president at advisory firm Avalere Health, told Modern Healthcare. First of all, CMS made updates to the Hospital Readmission Reduction Program. The rule would implement the expected increase to the maximum penalty for excess 30-day readmissions, which will be 2% in FY 2014. CMS also proposed adding two new conditions to the list of readmission measures for FY 2015: knee and hip implants and chronic obstructive pulmonary disorder (COPD). Also proposed for FY 2015 is a new hospital-acquired condition reduction program. Similar to the Hospital Readmission Reduction Program, the new program would penalize poor-performing hospitals by reducing their overall Medicare payment. However, under the Hospital-Acquired Condition Reduction Program, the lowest-performing 25% with regard to hospital-acquired conditions will be paid 99% of what they would otherwise be paid under the IPPS. Providers will have until June 25 to submit comments to CMS on the proposals. CMS will take the comments into account before releasing the final rule no later than August 1, 2013.
