The Centers for Medicare & Medicaid Services has finalized a 1.5 percent reduction in payments to acute care providers, a move aimed to correct overpayments.
CMS said in a fact sheet about the 2007 Inpatient Prospective Payment System final rule that it adjusted the payments to acute care hospitals because Medicare still has to recoup approximately $5.05 billion it made in overpayments due to coding errors that date back to Fiscal Year 2008.
The rule also overturns 0.2 percent payment cuts imposed under the “two-midnight” rule, the subject of a lawsuit filed by more than 50 hospitals in January. American Hospital Association Executive Vice President Tom Nickels praised this provision but expressed disappointment in the “unjustified” cut to acute care payments.
“While a reduction to the hospital update factor was mandated by law in 2012, CMS is undermining Congress’ intent by imposing a cut that is nearly two times what Congress specified,” Nickels said in a statement. “And while CMS reduced its proposed requirements on reporting electronic clinical quality measures, much more work needs to be done to ensure that the measures are valid and reliable before broad-scale implementation.”
In the final rule, CMS further addresses disproportionate share payments to safety-net hospitals, delaying a change to the formula that would have shifted the basis of such payments to hospitals’ charity care and uncompensated care claims.
Federation of American Hospitals President and CEO Chip Kahn praised the delay in a statement. “It is gratifying that CMS clearly listened and it is essential that critically important DSH funds will continue to flow where they are most needed,” Kahn wrote.
- read the final rule (.pdf)
- here's the fact sheet
- here’s the AHA statement
- read the FAH statement