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CMS Issues Final FY2015 Rule on Inpatient Hospital Payments

Cheryl Clark, for HealthLeaders Media, August 5, 2014

The Centers for Medicare & Medicaid Services' Inpatient Prospective Payment System final rule for FY 2015 includes a 1.4% increase for operating payment rates.

Hospitals learned late Monday the precise rules for how they will be paid for care provided to Medicare beneficiaries in the fiscal year starting Oct. 1, including guidelines for three penalties for poor quality performers.

The Centers for Medicare & Medicaid Services' Inpatient Prospective Payment System final rule for FY 2015 includes a 1.4% increase for operating payment rates. This factors in a market basket update of 2.9%, offset by -.5% percentage point productivity adjustment and a -.2 percentage point decrease as specified by the Patient Protection and Affordable Care Act, and  a -.8% decrease in accordance with the American Taxpayer Relief Act of 2012.

In a news release, however, CMS tempered that amount saying that the 1.4% increase combined with the hospital readmissions reduction program whose penalties rise to the maximum of 3%, changes to payments for disproportionate share hospitals, and the expiration of other temporary increases "will decrease IPPS operating payments by approximately .6%."

Other highlights of the 2,442-page rule include the following:

Hospital-Acquired Condition Reduction Program
Hospitals that rank in the lowest performing quartile of certain adverse events will receive a 1% payment reduction.  "These HACs are a group of reasonably-preventable conditions selected by CMS that patients did not have upon admission to a hospital, but which developed during their hospital stay."

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