2011 Proposed IPPS Rule Posted
The Centers for Medicare & Medicaid Services (CMS) announced a proposed rule Monday, March 19, that would change Medicare policies and payment rates for inpatient services furnished by both acute care hospitals and long-term care hospitals in 2011.
CMS is proposing in this rule to update acute care hospital rates by 2.4 percent for inflation and apply an adjustment of -2.9 percentage points to recoup one-half of the increase in 2008 and 2009 aggregate payments due to changes in hospital coding practices that did not reflect increases in patients’ severity of illness. By law, CMS must recoup the excess 2008 and 2009 spending by 2012. This reduction, coupled with other adjustments to maintain budget neutrality and ensure proper payment of outlier claims, is estimated to reduce total payments for operating expenses to Inpatient Prospective Payment System (IPPS) hospitals in 2011 by 0.1 percent or $142 million.
CMS also proposes to update long-term care hospital (LTCH) rates by 2.4 percent for inflation and apply an adjustment of -2.5 percentage points for the effect of documentation and coding that did not reflect increases in patients’ severity of illness. Under the proposed rule, LTCH payments are estimated to increase by 0.8 percent or $41 million.
In late March 2010, the Patient Protection and Affordable Care Act was enacted and amended shortly afterwards by the Health Care and Education Affordability Reconciliation Act of 2010. A number of provisions in this new legislation will have an impact on IPPS hospitals, LTCH PPS hospitals, and other Medicare providers. Due to the timing of the passage of the legislation, CMS was unable to incorporate those provisions in this proposed rule. CMS expects to provide further information on the implementation of health care reform provisions in these laws that affect 2010 and 2011 IPPS payments in the near future.