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Proposed CMS rule would increase net acute-care hospital pay by 0.9 percent

A rule proposed by CMS Tuesday to update Medicare payment rates for acute-care hospitals would increase payment rates to hospitals by 0.9 percent in Fiscal Year 2013.

The rule will update payment policies and rates for inpatient stays to general acute care hospitals paid under the Inpatient Prospective Payment System (IPPS) and long-term care hospitals (LTCHs) paid under the LTCH Prospective Payment System (PPS).

"The proposed rule would implement key elements of the Affordable Care Act's value-based purchasing program as well as the hospital readmissions reduction program. It also establishes the groundwork for extending Medicare's quality reporting programs beyond general acute care hospitals to other types of facilities," said CMS Acting Administrator Marilyn Tavenner, in a press release announcing the proposed rule.

In all, CMS is projecting that it will increase inpatient Medicare spending on inpatient hospital services by $175 million in 2013. This includes a net payment increase of 2.3 percent, after adjustments for inflation, improvements in productivity, a statutory adjustment factor and adjustments for hospital documentation and coding changes.

When taken with the entire scope of other payment and regulatory changes, the total increase in payments is anticipated to be 0.9 percent.

In particular, the CMS proposal intends to strengthen the current Hospital Value-Based Purchasing Program, which is set to take effect in 2013 to adjust payments made to hospitals based on how well they meet or improve performance on particular quality measures. The changes, to take effect in 2015, would add the Medicare spending per beneficiary measure to the existing set and would include all Part A and Part B payments.

In conjunction with this CMS has also suggested changes to the inpatient quality reporting program (IQR) to include measures for perinatal care and readmissions, including overall readmissions and readmissions relating to hip and knee replacement procedures, and for the use of surgery checklists designed to reduce errors. CMS is also proposing to add a new survey measure to the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) measures to assess the quality of patients' care transitions.

CMS will be accepting comments on the rule until June 25 and will publish a final rule by August. Once published, the new rule will be effective for payments on or after Oct. 1, 2012.

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