CMS releases FY 2011 proposed IPPS rule

Medicare payments to acute-care hospitals for inpatient services will decline by 0.1% or $142 million in fiscal 2011 under a proposed rule issued by the CMS. The proposed rule does not address inpatient hospital related provisions of the recently enacted Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act.  CMS expects to provide further information on the implementation of health care reform provisions in these laws that affect FY 2010 and FY 2011 IPPS payments in the near future.   In today's announcement, CMS is proposing to update acute care hospital rates by 2.4 percent for inflation, a slight increase over the FY 2010 inflation rate, and apply an adjustment of -2.9 percentage points to recoup one-half of the estimated excess spending in FY 2008 and 2009 aggregate payments, due to changes in hospital coding practices that did not reflect increases in patients' severity of illness.  Under legislation passed in 2007, CMS is required to recoup the entire amount of FY 2008 and 2009 excess spending from changes in hospital coding practices by FY 2012.  CMS estimates that payments to general acute care hospitals under the proposed rule for operating expenses in FY 2011 will decline by 0.1 percent, or $142 million, compared with FY 2010, and taking into account all factors that would affect spending.   CMS is similarly proposing to update long-term care hospital (LTCH) rates by 2.4 percent for inflation and apply an adjustment of -2.5 percentage points for the estimated increase in spending in FYs 2008 and 2009 due to documentation and coding that did not reflect increases in patients' severity of illness.  Based on these two proposed provisions and other proposed changes, CMS estimates that payments to LTCHs would increase by 0.8 percent or $41 million.  CMS is also proposing to add 45 new measures for which hospitals must submit data under the Reporting Hospital Quality Data for Annual Payment Update (RHQDAPU) program for 2011 to receive the full market basket update.  Hospitals that do not participate in the quality reporting program will get the update less two percentage points.  Based on the required reporting in 2009, 96 percent of participating hospitals are receiving the full update for FY 2010.   The rule is posted at: www.archives.gov/federal-register/public-inspection/index.html (or, more directly at: http://www.federalregister.gov/OFRUpload/OFRData/2010-09163_PI.pdf)

 

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