IPPS Proposed Rules Clarify Readmissions Penalties

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:

Readmissions
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.

Proposed Changes to the Hospital Inpatient Quality Reporting Program
The number of measures for reporting from 72 to 59 for the FY 2015 payment determination, and 60 for the FY 2016 payment determination would be reduced.

Hospital-Acquired Conditions
CMS proposed to add surgical site infection following cardiac implantable electronic device and iatrogenic pneumothorax with venous catheterization as conditions subject to the HAC payment provisions for FY 2013.

Future Hospital Value Based Purchasing Incentive Program
Starting with payments on Oct. 1, 2014, or FY 2015, CMS intends to add a provision for risk-adjusted efficiency or spending per beneficiary. The period for which costs will be assessed will be from three days prior to the inpatient admission to 30 days after discharge.

A new outcome measure would reward hospitals for avoiding central line-associated bloodstream infections or CLABSI.

CMS proposes to add perinatal care measures and readmission measures, including readmissions related to hip and knee replacement procedures as well as a measure to reward surgical teams that use checklists to reduce surgical errors.

Also proposed is a component of the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS), now a part of the VBP program, that evaluates the effectiveness of patient care transitions.

Other Hospitals
CMS defines quality and reporting measures that apply specifically to psychiatric hospitals and cancer hospitals. Other measures apply to other long-term care hospitals and ambulatory surgical centers.

CMS will accept comments to the proposed rule until June 25, 2012 and will respond to those comments in a final rule by August 1, 2012.

More specific information on the proposed rule is available here.