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Focus on Regulation

Medicare Inpatient Hospital Rule for Fiscal Year 2013 Finalized

Center for Medicare and Medicaid ServicesThe Centers for Medicare & Medicaid Services (CMS) finalized the Hospital Inpatient Prospective Payment System (IPPS) rule for fiscal year (FY) 2013 on August 1, 2012.  The final rule addresses changes in payment rates for acute care and long-term care hospitals effective October 1, 2012, as well as revisions to the Hospital Value-Based Purchasing Program and hospital quality measure programs as required by the Patient Protection and Affordable Care Act (PPACA). 

Payment Changes

The final rule increases Medicare payments to acute care hospitals that participate successfully in the Hospital Inpatient Quality Reporting (IQR) Program by 2.8%, while those that do not participate will receive an increase of only 0.8%.  CMS estimates that this rate increase, combined with certain other policies in the rule, will result in an increase in payments of roughly $2 billion, or 2.3% in FY 2013. Payments to long-term care hospitals are expected to increase less, at approximately 1.7%.

Quality Provisions

The final rule includes changes to the Hospital IQR Program that are designed to reduce the reporting requirements for hospitals to successfully participate in the program.  The current set of 72 measures will be reduced to 59 for FY 2015, and will be 60 for FY 2016. The finalized set of quality measures includes a focus on perinatal care, surgical complications for hip and knee replacements, readmissions, and care transitions. The rule also finalizes changes to measures to be used in the FY 2014 and FY 2015 quality reporting program for long-term care hospitals.  Starting in FY 2014, long-term care hospitals that do not participate in the quality reporting program will experience a payment reduction of 2 percentage points.

CMS finalized a number of other provisions related to quality in the final rule, including provisions:

  • Creating quality reporting programs for IPPS-exempt cancer hospitals and inpatient psychiatric facilities, as required by PPACA;
  • Establishing requirements for the Ambulatory Surgical Center Quality Reporting Program;
  • Updating the Hospital-Acquired Condition payment policy to include Surgical Site Infection Following Cardiac Implantable Electronic Device (CIED) and Iatrogenic Pneumothorax with Venous Catheterization; and
  • Setting forth program requirements for FY 2013 and FY 2015 for the Hospital Value-Based Purchasing Program.

The final rule will be published in the Federal Register on August 31, 2012