Providers have mixed feelings on CMS proposed hospital payments

Healthcare providers had a mixed response to Tuesday's proposed rule by the Centers for Medicare & Medicaid Services that would increase payment rates to general acute care hospitals by 0.9 percent in fiscal year 2013 and 1.9 percent for long-term care (LTC) hospitals, among other changes.

Despite the slight increase, the American Hospital Association was "deeply disappointed" with the new coding cuts in the proposed Inpatient Prospective Payment System (IPPS) rule, which fails to account for automatic across-the-board budget cuts going into effect next January, the trade association said. "Taken together, this will result in a negative update for hospitals next year unless changes are made," AHA President and CEO Rich Umbdenstock said Wednesday in a statement.

Meanwhile, Bill Walters, CEO of Acute Long Term Hospital Association, said his members, which include Kindred and Select Medical, are pleased with the proposal to apply a budget neutrality adjustment over a three-year period. "[I]f it had been implemented in one year, would have caused great instability for LTC hospitals," he told the Dow Jones Newswire. "By phasing the budget neutrality in over three years, LTC hospitals will have time to adapt to this fairly significant change in payment policy."

The agency's plan to narrow down quality measures for hospital reporting also received some favorable feedback. "It's good that they're lowering the burden on hospitals from tracking so many quality issues, but they're coming up with a couple other things, like [hospital-acquired conditions]," Robert S. Gold, CEO of clinical documentation consultant DCBA, Inc., told HCPro.

However, teaching hospitals voiced concerns about including labor and delivery beds in the total bed count when determining indirect medical education (IME) payments. Under the proposed rule, IME payments would drop $170 million next year. "These counterproductive cuts will reduce the ability of teaching hospitals and their physicians to care for the most vulnerable people in our communities and will endanger critical services such as 24/7 trauma and burn units that often are unavailable elsewhere," the Association of American Medical Colleges said in a statement Wednesday.

The public has until June 25 to submit comments on the proposed rule.

To learn more:
- here's the AHA statement (.pdf)
- read the Dow Jones article (subscription required)
- read the HCPro article
- check out the AAMC statement

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