Medicare Proposes to Increase Payments to US Acute Care Hospitals

The Centers for Medicare and Medicaid Services (CMS) has issued a proposed rule, published in the Federal Register on May 10, 2013, to increase payments to US acute care hospitals by almost $27 million in fiscal year 2014.

The Centers for Medicare and Medicaid Services (CMS) has issued a proposed rule, published in the Federal Register on May 10, 2013, to increase payments to US acute care hospitals by almost $27 million in fiscal year 2014. The increase accounts for a rise in inflation and a 0.8% reduction that CMS took to recover part of the $11 billion in overpayments from previous years, which is mandated by the American Taxpayer Relief Act of 2012.

The final rule will be published August 1, 2013. The change goes into effect on or after October 1, 2013.

The proposed Inpatient Prospective Payment System (IPPS) rule would increase payments by 0.8% for inpatient stays at hospitals that participate in CMS’s Inpatient Quality Reporting Program. The rule also proposed that hospitals that do not participate successfully in the CMS Inpatient Quality Reporting Program would see a payment decrease of 2.0%.

The payments to long-term care hospitals would increase by 1.1% (approximately $62 million) in fiscal year 2014.

Two new measures will be used to calculate readmission penalties for fiscal year 2015 under a new Hospital Readmissions Reduction program.

The CMS provided more information about how it plans to pay hospitals based on quality of care. Beginning in fiscal year 2015, CMS will pay hospitals that rank lowest among the lowest-performing 25% in hospital-acquired infections 99% of what they would otherwise have been paid through the IPPS. Incentive payments are also increasing to 1.25% under the CMS’s Value Based Purchasing Program.

CMS is also seeking comment through June 25th on research the agency has done to help identify chronically ill/medical complex patients—research that will be considered when changes are proposed for long-term care hospital payments in the future. To submit comments electronically, visit http://www.regulations.com and follow directions for Comment or Submission and enter file code CMS-1588-P to submit comments on the proposed rule.

The CMS document is available here.