CMS issues final rule on Medicare payment rates for inpatient stays

CMS has issued its final rule on Medicare payment guidelines for inpatient stays, which also increases the maximum reduction payments for 30-day readmission rates and changes the way payments are distributed to Medicare Disproportionate Share Hospitals.

“This rule helps improve hospital care and establishes clearer guidance to hospitals for when we will consider inpatient care to be appropriate so the system works better for patients and providers,” CMS Administrator Marilyn Tavenner, stated in a CMS press release.

Under the new rule, physicians who expect a surgical procedure on a Medicare patient will result in a stay longer than two midnights can admit the patient under the assumption the hospital will receive Medicare Part A payment. CMS noted that while a formal order for inpatient status must be filed, the physician can consider the patient’s time spend as an outpatient receiving observation or in the emergency department in their decision-making.

Marilyn Tavenner

In addition, overall Hospital Inpatient Prospective Payment System (IPPS) operating rates by 0.7% to $1.2 billion in 2014. CMS also plans to reduce projected spending increases by 0.2% due to medical review criteria for inpatient services and changes to admission.

The rule also finalizes the rate of reimbursement for hospitals with a high number of hospital-acquired conditions that will take effect in 2015. Hospitals in the lowest quartile for medical errors or serious infections will be paid 99% of their normal IPPS operating rate.

For hospitals with “excess 30-day readmissions,” CMS increased the maximum reduction of payments to 2% for pneumonia, heart attack and heart failure patients. CMS also added hip surgery, knee surgery and chronic obstructive pulmonary disease to the list of conditions it will use to determine the reduction, which will take effect in 2015.

Reference:
http://www.cms.gov