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CMS' IPPS Final Rule Not as Bad as Feared

Kristen Kohrt, for HealthLeaders Media, August 3, 2009

Though many hospitals feared a 1.9% reduction in payment for 2010, they will actually see a 2.1% increase, according to the fiscal year 2010 IPPS final rule that CMS released Friday.

CMS had originally proposed a documentation and coding adjustment to account for the effect of increases in aggregate payments because of changes in hospital coding practices that it said do not reflect increases in patients' severity of illness.

The proposed adjustment would have resulted in historically low payments for hospitals and especially penalize hospitals that have yet to develop a clinical documentation improvement (CDI) program, says DeAnne Bloomquist, RHIT, CCS, president and chief consultant for Mid-Continent Coding, Inc., in Overland Park, KS. "I think that means that hospitals can breathe a sigh of relief."

James S. Kennedy, MD, CCS, a director with FTI Healthcare in Atlanta, agrees. "CMS' proposed imposition of a documentation and coding adjustment, while logical and consistent with their rules, would have financially disadvantaged hospitals that have not enacted rigorous clinical definition accountability and documentation improvement programs," he says.

Payment changes

In the proposed IPPS rule, CMS intended to reduce future payment rates "based on the observed increase in spending due to documentation and coding that occurred in fiscal 2008," according to CMS' press release. However, because it does not have a full year of data that would show the extent of documentation and coding effects on 2009, CMS decided not to implement the adjustment until it has a full year of FY 2009 data.

This does not mean hospitals won't see an adjustment in the future, however. The press release also states, "Based on complete analysis of fiscal 2008 and fiscal 2009 data, CMS will consider phasing in future adjustments over an extended period beginning in fiscal 2011."

"This is basically granting [hospitals] a reprieve," Bloomquist says.

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