IPPS Proposed Rule Adds Readmission Measures, HAC Timeline

Cheryl Clark, April 29, 2013

Under a proposed federal rule, some 3,400 acute care hospitals would receive a net .8% reimbursement increase, including sequestration cuts, but would face penalties for new categories of readmitted patients, and new measures in quality incentive pay starting Oct. 1.

The Centers for Medicare & Medicaid Services issued its heavily anticipated proposed rule governing acute care payment for FY 2014 on Friday, shortly after the stock market closed.

The 1,424-page proposal includes clarification on which patient stays qualify as legitimate hospitals admissions, an effort to resolve confusion that has resulted in hospitals placing 8% of its patients in "observation" status, up from 3% in 2006, and absorbing less than half of the payment it would normally receive for a patient officially admitted.

It also exempts certain planned admissions from the readmissions penalty.

The agency will accept comments on the rule until June 25 and will issue a final rule by Aug. 1. The major proposals are outlined here:

The agency wants to expand the conditions and procedures calculated for the 30-day readmission penalty, which increases Oct. 1 to 2% of a hospital's Medicare base DRG, to include patients admitted for exacerbation of chronic obstructive pulmonary disease (COPD) and patients admitted for elective total hip or total knee arthroplasty (THA/TKA).

These would be added to the current conditions: acute myocardial infarction, congestive heart failure and pneumonia.


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