Hospitals receive slight Medicare payment bump in IPPS final rule


The Hospital Inpatient Prospective Payment System (IPPS) will increase Medicare payments to general acute care hospitals by 0.7 percent in fiscal year 2014, according to a final rule issued Friday by the Centers for Medicare & Medicaid Services.

CMS estimates general acute care hospitals will see $1.2 billion in total IPPS payments next year. Meanwhile, a 1.3 percent payment bump will give long-term care hospitals (LTCHs) $72 million in LTCH PPS payments in 2014.

As established by the Affordable Care Act, the final rule caps penalties for hospital readmissions at two percent of Medicare reimbursements for the upcoming year--a maximum fine that will hit 18 hospitals. It also added 15 new discharge status codes for planned readmissions that won't count against hospitals' readmission rates.

The final rule also clarifies when a patient should be admitted to the hospital, determining Medicare Part A payment is generally inappropriate for hospital stays lasting fewer than two midnights.

"This rule helps improve hospital care and establishes clearer guidance to hospitals for when we will consider inpatient care to be appropriate so the system works better for patients and providers," CMS Administrator Marilyn Tavenner said Friday in a statement.

However, last week the Office of Inspector General questioned whether such a requirement would actually reduce the number of observation and long outpatient stays.

In addition to OIG doubts, the GAO had raised concerns about how Medicare reimburses certain IPPS hospitals, as 91 percent of hospitals receive an adjustment or exemption to the IPPS flat fee per stay.

For more:
- here's the CMS announcement