CMS Final Rule Increases Payment Rates for Inpatient Services

Posted on by Frank J. Rosello

Medicare payment rates to acute-care hospitals will increase by about 2.8% in 2013, while the program’s total spending on inpatient hospital services will rise by about $2 billion compared with 2012, the CMS announced after releasing a final payment rule (PDF).

The CMS expects the combination of the rate hike and other policies in the rule to increase Medicare’s operating payments to the nation’s general acute-care hospitals by about 2.3% next year. Meanwhile, the final rule would complete all documentation and coding adjustments for fiscal 2008 and 2009 that an earlier law required This adjustment has been a contentious issue for providers for some time.

We commend CMS for recognizing that its proposed new cut of 0.8%, approximately $850 million, in Medicare payments to hospital care would have been detrimental for America’s seniors,” Richard Umbdenstock, president and CEO of the American Hospital Association (PDF), said in a statement. “Hospitals care for patients with complex medical needs and today’s rule reflects this reality.”

Similarly, the Premier healthcare alliance released a statement that applauded the agency for not finalizing the documentation and coding adjustment of -0.8% for payments that occurred in 2010 and for restoring to the base rates the 2.9% retrospective adjustment it made in 2011. “The combination of these policies will result in a net 1.0% increase in payments, funds that hospital desperately need in light of the other payment penalties and reimbursement cuts they face in the final rule,” the statement said.

Meanwhile, the regulation implements a host of the 2010 healthcare reform law’s provisions on value-based purchasing and hospital readmission reduction programs. For instance, the rule makes final a methodology and the payment adjustment factors to account for excess readmissions for heart attack, heart failure and pneumonia. It also includes a new outcome measure in the value-based purchasing program that rewards hospitals for avoiding certain types of life-threatening blood infections that can develop during inpatient hospital stays. And the regulation finalized requirements for the ambulatory surgical center quality reporting program, most of which will take effect in 2014. Those ambulatory surgery centers that do not report quality data or fail to comply with the requirements will see a 2 percentage point reduction in their annual payment update for that payment year, starting with 2014.

Article written by By Jessica Zigmond, writer for Modern Healthcare.Com

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