Regulatory Advisory

CMS Releases Proposed Rule for FFY 2013 IPPS and LTCH PPS

The Centers for Medicare & Medicaid Services (CMS) issued its proposed rule today for rate updates and policy changes to the Medicare inpatient prospective payment system (IPPS) and long-term-care hospital (LTCH) PPS for federal fiscal year (FFY) 2013. According to CMS, the IPPS proposed rule would increase operating payments to general acute-care hospitals by .9 percent or $904 million in FFY 2013. CMS estimates the FFY 2013 IPPS market basket update at 3.0 percent. However, the Affordable Care Act requires an adjustment in FFY 2013 for productivity (negative 0.8), as well as a 0.1 decrease in the market basket. In addition, among other policy and payment changes, CMS proposes continued implementation of a documentation and coding adjustment of negative 2.7 to remove any remaining effect of documentation and coding that occurred in FFYs 2008, 2009 and 2010. CHA is disappointed that CMS has once again proposed an additional year of coding and documentation adjustments.After taking into account the expiration of certain statutory provisions that provided special temporary increases in payments to hospitals, and other proposed changes to IPPS payment policies, CMS projects that total Medicare spending on inpatient hospital services will increase by approximately $175 million in FFY 2013 compared to FFY 2012.

The rule also proposes a significant number of changes to the hospital inpatient quality reporting program, including reducing the number of measures from 72 to 59 for FFY 2015 and 60 for FFY 2016. CMS also lays out quality measure and reporting requirements for inpatient psychiatric facilities, PPS exempt cancer hospitals and LTCHs. In addition, CMS articulates several new proposals for hospital value-based purchasing, including details regarding an administrative appeals process and new measures for FFYs 2015 and 2016.

The proposed rule will be published in the May 11 Federal Register. CHA is preparing its “first glance” summary of the IPPS proposed rule with a more detailed summary to follow in coming weeks. CHA will work with members to craft our response to CMS. Comments are due June 25. Additional updates will be posted on the CHA website and in CHA News.