IPPS rule: Acute-care hospitals to gain higher Medicare payments

The Centers for Medicare & Medicaid Services (CMS) yesterday issued a final rule that will raise Medicare reimbursement to acute-care hospitals paid under the Inpatient Prospective Payment System (IPPS) and hospitals paid under the Long-Term Care Hospital Prospective Payment System (LTCH PPS) for fiscal year 2012.

Payments to general acute-care hospitals will grow by 1.1 percent, compared to the 0.55 percent cut previously proposed, according to a CMS press release. The final rule will also boost payments to LTCHs by 2.5 percent, compared to the proposed 1.9 percent increase.

CMS said the IPPS rule will enhance efforts to provide high-quality care with increased emphasis on preventing healthcare-associated infections in acute-care hospitals and creating the basis for a new quality reporting program for LTCHs.

"The final rule continues a payment approach that encourages hospitals to adopt practices that reduce errors and prevent patients from acquiring new illnesses or injuries during a hospital stay," said CMS Administrator Dr. Donald M. Berwick in a statement. "This approach is part of a comprehensive strategy being implemented across Medicare's payment systems that is intended to reduce overall costs by improving how care is delivered."

The final rule will affect about 3,400 acute-care hospitals and 420 LTCHs. It will be effective for discharges occurring on or after Oct. 1.

Acute-care hospital operators, including HealthSouth, Kindred Healthcare, Tenet Healthcare, and Community Health Systems, are likely to benefit from the Medicare payment hikes, notes Reuters.

The final IPPS rule will appear in the Federal Register on Aug. 18.

For more:
- read the CMS statement
- here's the Reuters article

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