CMS proposes few coding, reporting changes in IPPS
Proposed rule may slash hospital reimbursement
The 2010 proposed rule for the Inpatient Prospective Payment System (IPPS) includes only minimal changes to the MS-DRG system from a coding and reporting standpoint but is likely to have a significant impact on hospital reimbursement, according to Deborah Hale, CCS, president of Administrative Consultant Services LLC, a health care consulting firm based in Shawnee, OK.
In issuing its proposed rule May 1, the Centers for Medicare & Medicaid Services (CMS) recommended updating hospital rates for inflation but reducing payment rates by a documentation and coding adjustment to address changes in hospital coding practices as a result of the new MS-DRG system.
CMS contends that under the MS-DRG system, hospitals changed their documentation and coding of patient diagnoses in a manner that leads to an increase in aggregate payments without corresponding growth in actual patient severity.
After analyzing 2008 data, the Medicare Actuary found that additional coding that did not reflect actual changes in the severity of patients' illness increased payments by 2.5% in fiscal year 2008 and will further increase payment in fiscal year 2009.
"CMS attributes this almost entirely to improvements in the capture of complications and comorbidities [CCs] and major complications and comorbidities [MCCs]. Specificity and reporting of congestive heart failure, chronic obstructive pulmonary disorder, and simple pneumonia were cited as contributing diagnoses," Hale says.
The Medicare Actuary estimates that total adjustments of about 8.5% will have to be made to address changes in hospital coding practices over the next few years.
CMS has recommended a 3.4% cumulative payment reduction because of perceived changes in documentation and coding since hospitals began using the MS-DRG system, Hale says. The payment reduction would go into effect for all admissions that occur after Oct. 1, 2009.
"Overall, payments for 2010 are expected to be 4.8% less than payments in 2009, with the greatest reduction occurring in urban hospitals with more than 500 beds, which could see a reduction in reimbursement of 9.7%, Hale says.
The reduction in payment applies to all hospitals, even those that have not demonstrated improvements in documenting and coding, Hale says.
Beginning in October 2007, CMS replaced the DRG system with 745 new Medicare severity-adjusted DRGs (MS-DRGs) designed to better recognize severity of illness and the cost of treating Medicare patients.
System should be budget-neutral
In announcing the new system, CMS said it should be budget-neutral, meaning that total Medicare payments should not increase or decrease solely due to changes in documentation and coding.
"The documentation and coding adjustment ensures that Medicare spending for inpatient stays does not increase or decrease as a result of changes in hospital coding practices following adoption of a new inpatient hospital patient classification system in fiscal year 2008," CMS said in a press release.
CMS has requested public comment on whether to make a different adjustment than the one proposed. The public comment period ended June 30. CMS has announced its intention to issue the final rule for fiscal year 2010 no later than Aug. 1, 2009.
"We understand that hospitals will be concerned about lower-than-historical update amounts. However, we are proposing an adjustment that minimizes the effects of fiscal year 2010 payments while still meeting the requirements of the law, which may mean larger reductions in the next two years," says Charlene Frizzera, CMS acting administrator.
In the final rule, CMS made no changes to the post-acute care transfer policy and did not add any new conditions to the list of conditions that result in reduced payment if they are not present upon admission, Hale points out.
Hospitals should take advantage of the lull in regulatory changes to review and reinforce the major changes CMS has made in the past two years and to be sure they have processes in place to ensure that their documenting and coding are accurate, she says.
"Hospitals that do not continue to work to improve documenting and coding accuracy will find themselves falling even further behind," she says.
In the quality measure arena, CMS added four additional measures to the current set of 43 quality measures on which hospitals must report data in order to receive the full market basket reimbursement update in 2011.
Hospitals that report the 2010 quality measures will get the full reimbursement update. Those that do not participate in the quality reporting program will get the update, less 2 percentage points. CMS reports that 97% of participating hospitals received the full update last year.
CMS retired the acute myocardial infarction measure beta-blocker at arrival from the quality data based on evolving evidence that early beta-blockers should be avoided in certain patient populations due to increased mortality risk.
Two new proposed quality measures relate to the Surgical Care Improvement Project measures and postoperative urinary catheter removal on postoperative Day 1 or 2 and perioperative temperature management. These were added to the 25 other measures that require chart extraction.
Two additional measures require hospitals to participate in national registries, which collect quality data on nursing-sensitive care and stroke care.
The 2010 proposed rule for the Inpatient Prospective Payment System (IPPS) includes only minimal changes to the MS-DRG system from a coding and reporting standpoint but is likely to have a significant impact on hospital reimbursement, according to Deborah Hale, CCS, president of Administrative Consultant Services LLC, a health care consulting firm based in Shawnee, OK.You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
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