The Centers for Medicare & Medicaid Services (CMS) on Aug. 1, 2012 issued a final rule that updates fiscal year (FY) 2013 Medicare payment policies and rates for inpatient stays at general acute-care and long-term care hospitals (LTCHs), and builds on the Obama Administrations work to slow growth in future healthcare costs by improving patient care.
The final rule also implements key elements of the Affordable Care Acts hospital value-based purchasing and hospital readmissions reduction programs. The rule advances Administration efforts to tie Medicare payments to quality health care across the delivery system, with new quality reporting measures for general acute-care hospitals in FY 2015 and FY 2016; new measures for long-term care hospitals in FY 2016, and new quality reporting programs for psychiatric hospitals and cancer hospitals. In addition, the rule establishes new reporting and other requirements for the Ambulatory Surgical Center Quality Reporting (ASCQR) Program.
Hospitals are at the forefront of our strategy to both save money and improve the quality and coordination of care, says CMS acting administrator Marilyn Tavenner. This rule takes further important steps to ensure all patients receive the best possible care.
FY 2013 Payment Update
Under the final rule, payment rates to general acute-care hospitals will increase by 2.8 percent in FY 2013. The 2.8 percent is a net update after the market basket update, improvements in productivity, a statutory adjustment factor, and adjustments for hospital documentation and coding changes. The rate increase, together with other policies in the final rule, would increase Medicares operating payments to acute-care hospitals by approximately 2.3 percent in FY 2013. After taking into account the expiration of certain statutory provisions that provided special temporary increases in payments to hospitals, and other changes to IPPS payment policies, CMS projects that total Medicare spending on inpatient hospital services will increase by about $2 billion in FY 2013 relative to FY 2012.
Under the final rule LTCH payments are expected to increase by approximately $92 million or 1.7 percent in FY 2013 relative to FY 2012, this reflects a 1.8 percent payment rate update. As explained further below, in addition to this 1.8 percent update for inflation (adjusted as required by the statute), to LTCH payment rates will be reduced to 0.5 percent due to the one-time budget neutrality adjustment for discharges on or after December 29, 2012.
Provisions Promoting Improved Patient Care
To provide hospitals with an incentive to reduce hospital readmissions and improve care coordination, the Affordable Care Act created a Hospital Readmissions Reduction Program that will reduce payments beginning in FY 2013 (for discharges on or after Oct. 1, 2012) to certain hospitals that have excess readmissions for three selected conditions: heart attack, heart failure and pneumonia. The final rule finalizes a methodology and the payment adjustment factors to account for excess readmissions for these three conditions.
The final rule strengthens the Hospital Value-Based Purchasing Program (VBP program) to reward efficient, high-quality care. This program, which was created by the Affordable Care Act, will adjust hospital payments beginning in FY 2013 and annually thereafter based on how well hospitals perform or improve their performance on a set of quality measures.
The final rule includes a new outcome measure in the VBP program that rewards hospitals for avoiding certain kinds of life-threatening blood infections that can develop during inpatient hospital stays. This measure, the central line-associated bloodstream infection measure, supports ongoing work by CMS and other hospital safety leaders to reduce healthcare-associated infections through the Partnership for Patients initiative. The final rule adds surgical site infection following CIED implantation as a condition subject to the Hospital Acquired Condition (HAC) payment provision. CMS considers these infections to be reasonably preventable and has classified them as complicating conditions that would otherwise result in higher payment to the hospital. Under the new policy, CMS will pay for the original surgery, but will not reimburse hospitals at a higher rate for treating the infection.
The HACs payment policy, which was mandated by the Deficit Reduction Act of 2005, prevents hospitals from being paid at the higher MS-DRG rate for patients with complications or major complications if the sole reason for the higher payment is the occurrence, during the beneficiarys hospital stay, of one of the conditions on the HACs list. CMS is adding Surgical Site Infection Following Cardiac Implantable Electronic Device (CIED) and Iatrogenic Pneumothorax with Venous Catheterization to the HAC payment provision for FY 2013. Surgical Site Infection Following Cardiac Implantable Electronic Device (CIED) procedures will be added as a sub-category under the broader, Surgical Site Infections HAC category.
More than 500,000 CIEDs are implanted each year in the United States, and 70 percent of CIED recipients are age 65 or older. CIED therapy reduces morbidity and mortality in selected patients with cardiac rhythm disturbances. However, the benefit of CIED therapy is somewhat reduced by complications following device placement, including infections. Patients can present with early or late infections because of CIED placement.
Pneumothorax is defined as the presence of air or gas in the space between the tissue of the lung and parietal pleura, or surface lining of the lung (the pleural cavity). The presence of air in thisspace partially or completely collapses the lung and is life threatening. Air can enter the intrapleural space through the chest wall. Iatrogenic pneumothorax is a type of traumatic pneumothorax that results from infiltration into the pleural space during the course of a diagnostic or therapeutic medical intervention, such as needle placement for central line catheter guidance.
CMS is also adding two codes, 999.32 (Bloodstream infection due to central catheter) and 999.33 (Local infection due to central venous catheter) to the existing Vascular Catheter-Associated Infection HAC Category.
The final rule also strengthens the Inpatient Quality Reporting (IQR) program. Specifically, CMS is including measures for perinatal care and readmissions, including overall readmissions and readmissions relating to hip and knee replacement procedures, as well as a measure related to whether hospitals use surgery checklists. CMS is also adding a new survey measure to the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) measures to assess the quality of care for patients as they transition from one care setting to another.
The final rule builds on CMS quality reporting initiatives by adopting the measures that will be used for LTCHs for the FY 2015 and FY 2016 quality-based payment determinations and establishing quality reporting for psychiatric hospitals and psychiatric units that are paid under the Inpatient Psychiatric Facilities Prospective Payment System and for PPS-exempt cancer hospitals. Reporting and other requirements are also finalized for the ASCQR program.
For more information on the payment and quality provisions in the final IPPS/LTCH rule, go to: http://www.cms.gov/apps/media/fact_sheets.asp
The final rule can be downloaded from the Federal Register at: http://www.ofr.gov/inspection.aspx?AspxAutoDetectCookieSupport=1.
The final rule will appear in the Aug. 31, 2012 Federal Register, and will take effect Oct. 1, 2012.