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How IPPS Final Rule Affects Medical Coding

Michelle A. Leppert, CPC, August 7, 2013

The final Inpatient Prospective Payment System rule specifies how hospitals are to be paid for Medicare beneficiaries' inpatient care starting Oct. 1 and clarifies penalties to hospitals.

CMS offered hospitals some additional guidelines for inpatient admissions and finalized requirements for the Part A to Part B rebilling in the 2014 IPPS Final Rule, released August 2.

CMS also finalized a negative 0.8% recoupment adjustment as part of the documentation and coding adjustment mandated by the American Taxpayer Relief Act of 2012. The rule lays out the framework for the new Hospital-Acquired Condition Reduction Program, which will begin in FY 2015. The rule updates the measures and financial incentives in the Hospital Value-Based Purchasing and Readmissions Reduction programs.

Inpatient guidelines

CMS stated it was attempting to clarify guidelines around when a patient should be admitted to the hospital in its updated inpatient admission guidelines. In the past, CMS used 24 hours as a benchmark for medical necessity for inpatient admission. CMS finalized a change to that timeframe, making it care that is expected to cross two midnights.


See Also: Final IPPS Rule Elicits Objections from Hospital Groups


"I am not sure how facilities will communicate the new 'two-midnights' regulation to their physicians, staff, and patients," says Debbie Mackaman, RHIA, CHCO, regulatory specialist for HCPro, Inc., in Danvers, Mass. "Medicare has stated that the purpose of the new rule is to provide 'both consistency and clarity.' I am not convinced that they have done that and I am concerned that the beneficiaries will be impacted by this new rule more than what CMS has stated." If a physician expects a patient's treatment to cross two midnights and admits the patient based on that belief, then CMS will generally consider the inpatient admission to be appropriate. The physician must write an order for inpatient services and document the reasons for the admission in the patient's record.

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