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On August 1, 2011, the Centers for Medicare and Medicaid Services (CMS) published the fiscal year 2012 Final Rule for the Inpatient Prospective Payment System (IPPS). The rule includes several adjustments to payment rates as well as changes to existing regulations. However, much of the rule focuses on implementing many of the quality of care initiatives set forth in the Patient Protection and Affordable Care Act (PPACA). This alert summarizes the following components of the rule:
Hospital Inpatient Quality Reporting
CMS expanded upon the Inpatient Quality Reporting (IQR) program, which was enacted to improve data collection on quality of care for hospitals paid under the IPPS. The program reduces payments by 2 percent of the IPPS market basket update for hospitals that do not successfully participate. [Read more ...]
Inpatient Value-Based Purchasing Program
The PPACA established the Inpatient Value Based Purchasing (VBP) program, which uses certain measures reported under the IQR program and will distribute incentive payments to hospitals based on the hospital's quality performance. CMS added new targets that will apply to FY 2012 and beyond. [Read more ...]
Hospital Readmissions Reduction Program
The PPACA also established the Medicare hospital inpatient readmissions reduction program, which may reduce IPPS payments by up to 1 percent of the market basket for acute care hospitals with higher than expected readmission rates for certain conditions. The program, which begins on October 1, 2012, provides financial incentives in order reduce preventable readmission rates that will improve quality of care and reduce costs. Read more on new developments made by CMS to this payment reduction program. [Read more ...]
Preventable Hospital Acquired Conditions
One component of lowering healthcare costs and improving outcomes is punishing hospitals with substandard care. An indicator of substandard care is a high rate of patients acquiring certain conditions after admission in the hospital that were not present at the time of admission. As such, CMS expands upon payment reduction on hospitals with high hospital acquired condition (HAC) rates imposed by Congress under the PPACA. [Read more ...]
Changes to the Three-Day Payment Window
Patients often receive outpatient services prior to admission in a hospital. These may include either diagnostic (e.g. x-ray, lab tests) or non-diagnostic (e.g. therapeutic) services. Recent changes have been made to how the payment window applies to non-diagnostic services and to services performed in hospital owned or operated physician practices [Read more ...]
Changes to the Under Arrangements Requirements
For several years, CMS has had concerns regarding the services which may be provided "under arrangements" with the hospital. "Under arrangement" services are those which an outside entity provides under contractual arrangements with the hospital, but are billed for by the hospital. This rule further limits those services that may be provided "under arrangement." [Read more ...]
For More Information
To read the entire Final Rule summary, click here.
If you have questions regarding this regulatory update or any other issues, please contact:
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