For acute-care hospitals, the CMS is proposing a 2.4% annual inflation increase in Medicare payments, a slight increase over the fiscal 2010 level. However, it is also applying an adjustment of negative 2.9 percentage points to recoup estimated excess spending that took place in fiscal 2008 and 2009 because of changes in hospital coding practices. Taking into account other factors that would affect spending, the agency estimates that hospital inpatient payments will decrease by 0.1% next fiscal year.
Earlier this year, the Medicare Payment Advisory Commission, in researching documentation and coding trends under the Medicare severity diagnosis-related groups, or MS-DRGs, found that hospitals were coding more accurately for procedures and getting higher payments as a result.
Hospitals may have been getting paid more, but changes in their coding practices “did not reflect increases in patients' severity of illness,” the agency said, explaining the reasons why it was recouping payments from the industry.
Umbdenstock countered that hospital patients are in fact getting sicker.
“Hospitals supported the move toward a more refined payment system that would better characterize patient severity, yet CMS' coding offset distorts any improvements to payment accuracy,” he said.
Long-term-care hospitals will experience a similar adjustment under the proposed rulemaking, although their inpatient Medicare payments are expected to increase by 0.8% or $41 million in fiscal 2011.