CMS issues final FY 2015 IPPS rule

AHA News Now

The Centers for Medicare & Medicaid Services late today issued its hospital inpatient prospective payment system final rule for fiscal year 2015. The rule will increase inpatient PPS rates by 1.4% in FY 2015, after accounting for inflation and other adjustments required by law, but excluding hospital-specific changes due to performance programs. Specifically, the final rule includes an initial market-basket update of 2.9% for those hospitals that submit data on quality measures and were meaningful users of electronic health records in FY 2013. Hospitals either not submitting quality data or that were not meaningful users of EHRs in FY 2013 will be subject to a one-quarter reduction of this initial market-basket rate; hospitals meeting neither of these requirements will be subject to a one-half reduction of this initial market basket rate. For all PPS hospitals, the rule makes a productivity cut of 0.5% and an additional market-basket cut of 0.2%, as mandated by the Affordable Care Act. In addition, CMS finalizes a 0.8% cut that would, in part, fulfill the requirement of the American Taxpayer Relief Act of 2012 that it recoup what the agency claims is the effect of documentation and coding changes from FYs 2010-2012 that it says do not reflect real changes in case mix. The rule also includes ACA-mandated Medicare Disproportionate Share Hospital payment reductions, which will reduce overall Medicare DSH payments by 1.3% in FY 2015. "We are very disappointed that the ACA-mandated Medicare disproportionate share hospital (DSH) cut is significantly higher than originally proposed," said Linda Fishman, senior vice president of public policy analysis and development. "While we understand some of the reductions are due to increased coverage, it is unclear how CMS arrived at the remaining reductions." In addition, CMS indicates it will continue to work with stakeholders to address an alternative payment methodology for short inpatient stays. The final rule will be published in the Aug. 22 Federal Register and most of its provisions will take effect Oct. 1. AHA staff is reviewing the rule, and members will receive a Special Bulletin tomorrow with further details.

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