CHA News Article

CMS Issues FFY 2015 IPPS Final Rule
Inpatient payments to decrease for many hospitals

The Centers for Medicare & Medicaid Services (CMS) today released the attached final rule for rate updates and policy changes to the Medicare inpatient prospective payment system (IPPS) and long-term care hospital (LTCH) payment changes for federal fiscal year (FFY) 2015. For acute care hospitals, CMS finalized a 1.4 percent market basket increase for FFY 2015 for hospitals that successfully participate in the Hospital Inpatient Quality Reporting (IQR) program and are meaningful users of electronic health records. However, taken together with continued mandated legislative reductions for coding and documentation — as well as changes in the hospital value-based purchasing (VBP) program, readmissions reduction program, the hospital-acquired conditions (HAC) penalty program ­— and the Medicare DSH reductions, CMS estimates that total inpatient payments will decrease by 0.6 percent, or $756 million, compared to FFY 2014. Of particular note, CMS estimates that due to more recent data on the number of uninsured and a decrease in hospital spending, the Medicare Disproportionate Share (DSH) uncompensated care payments that will be redistributed will decrease from the estimates in the proposed rule – from $8.56 billion to $7.65 billion for FFY 2015. CHA continues to strongly advocate for a legislative delay of the cuts to Medicare DSH.

Finally, CMS also finalized a number of its proposed changes to the IQR program, the VBP program, the hospital readmissions reduction program and the HAC penalty program in this rule.

Also included here are links to CMS fact sheets on provisions outlined in the IPPS final rule. A more detailed summary will be released in the coming weeks. Additional information on updates to the LTCH prospective payment system provisions will follow in tomorrow’s edition of CHA News.

CMS Fact Sheet: Payment Provisions
CMS Fact Sheet: Quality Provisions