CMS Releases 2014 IPPS Proposed Rule

Michelle A. Leppert, CPC, April 30, 2013

CMS added new quality measures and penalties for new categories of readmitted patients, emphasizing its push to improve the quality of healthcare through payment initiatives in its Inpatient Prospective Payment System fiscal year (FY) 2014 proposed rule released Friday, April 26. The release also includes a proposal to change the criteria for an inpatient admission.

Hospitals will see a net increase of 0.8% in payments, according to CMS. As always, some MS-DRG weights increased, while others decreased. Facilities should review the relative-weight change tables included in the proposed rule.

Facilities still face a negative 0.8% recoupment adjustment under the Documentation and Coding Adjustment, and CMS expects to make similar adjustments in FY 2015, 2016, and 2017 in order to recover the full $11 billion mandated in the American Taxpayer Relief Act of 2012. "I personally believe that any 'improvement' in a facility's case mix index with clinical documentation and coding integrity is a truer reflection of their patient's actual resource intensity in contrast to the 'underdocumentation' that occurred prior to MS-DRGs," says James S. Kennedy, MD, CCS, CDIP, managing director of FTI Healthcare in Brentwood, Tenn. "Even so, I believe that hospitals and physicians, as well as the entire healthcare delivery system, benefits in their partnership to consistently define, diagnose, and document conditions and treatments as to deploy clinically congruent ICD-9-CM codes essential to MS-DRGs and in their preparation for ICD-10-CM's impact as well."

Change to inpatient criteria

CMS solicited ideas for how to define an inpatient admission in the 2013 OPPS proposed and final rules because the agency was concerned about the increased length of outpatient stays in observation.

In the FY 2014 IPPS proposed rule, CMS suggests a significant revision to the definition of inpatient. CMS proposed redefinition is:

    Medicare’s external review contractors would presume that hospital inpatient admissions are reasonable and necessary for beneficiaries who require more than 1 Medicare utilization day (defined by encounters crossing 2 midnights) in the hospital receiving medically necessary services.


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