CMS Issues Inpatient Final Rule

The Centers for Medicare & Medicaid Services (CMS) issued, Aug. 1, a final rule for 2013 payment policies for inpatient stays at general acute care and long-term care hospitals (LTCH). The new rule includes elements of the Affordable Care Act (ACA) hospital value-based purchasing and hospital re-admissions reduction programs. The rule also includes new efforts to tie Medicare payments to quality health care across the delivery system, with new quality reporting measures for hospitals in 2015 and 2016, new measures for LTCHs in 2016, and new quality reporting programs for psychiatric and cancer hospitals.

2013 Payment Update

Under the final rule, payment rates to general acute care hospitals will increase by 2.8 percent in 2013. The increase 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, along with other policies in the final rule, will increase Medicare’s operating payments to acute care hospitals by approximately 2.3 percent in 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 2013, relative to 2012.

Under the final rule, LTCH payments are expected to increase by approximately $92 million or 1.7 percent in 2013, relative to 2012. This increase reflects a 1.8 percent payment rate update. LTCH payment rates will then be reduced to 0.5 percent due to the one-time budget neutrality adjustment for discharges on or after Dec. 29, 2012.

Source: CMS press release

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