General acute care hospitals are likely to see their Medicare payments drop slightly next year because of penalties for readmissions and hospital-acquired conditions, as well as other proposed payment cuts.
The Centers for Medicare & Medicaid Services released a proposed rule with new payment policies for fiscal year 2015 under the Inpatient Prospective Payment System and the Long-Term Care Hospital Prospective Payment System April 30. The proposal would provide a 1.3% payment increase for general acute care hospitals for fiscal year 2015 and a 0.8% increase for long-term care hospitals.
Marilyn Tavenner
But the agency estimates that general acute care hospitals will actually see a 0.8% pay cut because of reductions from the Hospital Readmissions Reduction Program, the Hospital-Acquired Condition Reduction Program, cuts to disproportionate share hospitals, and the expiration of some temporary payment increases.
Overall, the CMS estimates that Medicare spending on inpatient hospital services will drop by about $241 million in the next fiscal year, while payments to long-term care hospitals are projected to increase by $44 million.
The proposal also places new requirements on hospitals to be open with their patients about prices. Under the rule, the CMS is requiring hospitals to either make a list of their standard charges publicly available or publicize their policies for allowing the public to view a list of charges upon request.
"This proposed rule is geared toward improving hospital performance while creating an environment for improved Medicare beneficiary care and satisfaction," CMS Administrator Marilyn Tavenner said in a statement.
The proposal also increases the penalties for some quality improvement programs: For example, the CMS will reduce the base operating diagnosis-related group payment amounts for all hospitals 1.5%, up from 1.25% this year. Overall, the CMS estimates that $1.4 billion will be available to fund incentive payments through the program in the next fiscal year.
The proposal also calls for increasing penalties* for hospital readmissions from 2% to 3% starting in October. Hospitals will be evaluated based on how well they do in reducing readmissions due to myocardial infarction, heart failure, pneumonia, chronic obstructive pulmonary disease, and hip/knee arthroplasty.
The CMS is also proposing to launch the Hospital Acquired Condition Reduction Program in October. This Affordable Care Act program will reduce Medicare inpatient payments by 1% for hospitals with the poorest record of preventing hospital-acquired conditions.
The public can comment on the proposal until June 30 at regulations.gov. The CMS said a final rule will be issued by Aug. 1.
mschneider@frontlinemedcom.com
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*CORRECTION, 5/2/2014: An earlier version of this story incorrectly stated that there would be increased payments for hospital readmissions