CMS postpones payment reduction in 2010 IPPS
Further evaluation of impact to come
The Centers for Medicare & Medicaid Services (CMS) has granted hospitals a temporary reprieve from a reduction in Medicare payments.
In its final rule for the Inpatient Prospective Payment System (IPPS), CMS backed away from a proposal to reduce Medicare payments in FY 2010 to address changes in hospital coding practices as a result of the new MS-DRG system.
Instead, hospitals will receive a 2.1% inflation update in their payment rate for all admissions on or after Oct. 1, 2009.
In its proposed rule, issued May 1, CMS had recommended updating hospital rates for inflation but reducing payment rates to account for perceived changes in documentation and coding since hospitals began using the MS-DRG system. The adjustment would have had the net effect of reducing payments by 1.9%.
CMS contends that under the new 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.
CMS had proposed adjusting the payments after an analysis by the Medicare actuary found that additional coding that did not reflect actual changes in the severity of patients' illness increased payments by 2.5%.
CMS responds to comments
In response to public comment on the proposed rule, CMS decided not to implement the adjustment until it has a full year of 2009 data. However, in announcing the final rule, CMS stated that it is considering phasing in future adjustments over an extended period beginning in FY 2011, based on analysis of FY 2008 and FY 2009 year data.
"The decision by CMS to delay the payment rate adjustment is good news for hospitals. However, it's important that case managers and clinical documentation specialists continue to ensure that the documentation completely describes the severity of illness for their patients. In the future, clinical documentation assurance programs are going to be more important than ever," says Deborah Hale, CCS, president of Administrative Consultant Services LLC, a health care consulting firm based in Shawnee, OK.
Documentation improvement still needed
The final rule did not change the list of hospital-acquired conditions for which CMS will not provide reimbursement but affirms CMS' plans to evaluate the impact of the existing policy on hospital practices and patient care.
Medicare has selected 10 categories of conditions that are reasonably preventable and that when present as a secondary diagnosis at discharge, result in the case being assigned to a higher-paying MS-DRG.
As of Oct. 1, 2008, CMS no longer pays at the higher MS-DRG if diagnoses on the hospital-acquired conditions list are the only secondary diagnosis on a claim and were not reported as being present when the patient was admitted.
During the coming fiscal year, CMS is planning to conduct a joint evaluation of the program's impact with the Department of Health and Human Services, the Centers for Disease Control and Prevention, the Agency for Healthcare Research and Quality, and the Office of Public Health and Science.
Quality measure changes
The final rule also expanded the hospital quality measures to 47 by adding four measures for which hospitals must submit data to receive the full market basket reimbursement update in 2011.
CMS retired one quality measure, beta-blocker at arrival for acute myocardial infarction patients because new guidelines by the American College of Cardiology/American Heart Association recommend that early beta-blockers should be avoided in certain patient populations due to increased risk of mortality.
Hospitals that do not report data will receive an inflation update equal to the market basket less two percentage points. In 2010, that means an update of 0.1% for nonparticipating hospitals.
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.
(For more information, contact Deborah Hale, president of Administrative Consultant Services LLC, e-mail: [email protected].)
The Centers for Medicare & Medicaid Services (CMS) has granted hospitals a temporary reprieve from a reduction in Medicare payments.You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
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