IPPS Proposed Rules Clarify Readmissions Penalties

Cheryl Clark, April 25, 2012

Acute care hospitals will receive a 2.3% increase in operating payment for Medicare patients if they participate in hospital inpatient quality reporting programs under the latest proposed rules form the Centers for Medicare & Medicaid Services. Those that don't participate will receive a 2% reduction, or a payment update of .3%.

This would amount to a projected $904 million increase in FY 2013, but after reductions accounting for the expiration of certain temporary payment increases, the real amount of increase is $175 million.

The 1,313-page document includes the following proposed provisions to apply to 3,400 acute care hospitals and/or 440 long-term care hospitals starting Oct. 1, 2012, and some provisions for subsequent years:

CMS proposes a final methodology to calculate penalties for hospitals with high rates of 30-day readmissions, saying the penalty will result in $300 million decrease for those hospitals.

Immediate Jeopardy
CMS specifies that only hospitals that received at least two immediate jeopardies during the first Hospital Value Based Purchasing Program performance period, between July 1, 2011 and March 31, 2012, would be precluded from participating in the VBP incentive program. Additionally, those hospitals that are excluded would not be subject to a 1% withholding from their Medicare payments, the amount that would be redistributed to reward those hospitals with higher quality scores.

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