Healthcare Business News

CMS issues final rules for inpatient, hospice payments

By Virgil Dickson and Paul Demko
Posted: August 4, 2014 - 7:15 pm ET

The CMS has finalized a rule (PDF) that decreases inpatient prospective payment system payments by $756 million overall. Meanwhile, long-term-care hospitals will see payments increase by 1.1%, or approximately $62 million in fiscal 2015, which starts Oct. 1.

The CMS Monday also released its final rule (PDF) for hospice payments in fiscal 2015. Those payments are expected to increase by 1.4%, or $230 million, over the current year.

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The final inpatient rule applies to approximately 3,400 acute-care hospitals and 435 long-term-care hospitals, and will go into effect for discharges occurring on or after Oct. 1. Not all inpatient hospitals will see cuts. If they are participating in the Hospital Inpatient Quality Reporting Program and regularly use electronic health records, their payments will be increased by 1.4%.

The policy also limits payment for hospital-acquired conditions and readmissions. The maximum reduction in payments under the Hospital Readmissions Reduction Program will increase from 2% to 3%. The agency estimates the program already has been successful, with hospital readmissions in Medicare declining by a total of 150,000 from January 2012 through December 2013.

Acute-care facilities struggling most with hospital-acquired conditions will have their Medicare inpatient payments reduced by 1%.

In the hospice rule, the CMS finalized a requirement that hospices file a “notice of election” within five days after a beneficiary is referred for hospice care or face financial penalties. The change is designed to reduce nonhospice claims related to a patient’s terminal illness.

“Prompt recording of the notice of election prevents inappropriate payments, as claims filed by providers other than the hospice or the attending physician will be rejected by the system, unless those claims are for items or services unrelated to the terminal illness and related conditions,” the final rule states.

In response to concerns about the new policy raised in public comments, the CMS will allow providers to make the case that they missed the five-day deadline because of exceptional circumstances and therefore shouldn’t be penalized. The agency detailed four circumstances under which a provider could qualify for the exception, including damage from a flood, fire or earthquake.

Follow Virgil Dickson on Twitter: @MHVDickson

Follow Paul Demko on Twitter: @MHPDemko

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