The CMS will keep in place a 2.9% pay reduction to offset what it sees as overpayments made to hospitals under its new new coding system, according to a final payment rule.
Taking that and other payment changes into account, payments made to the 3,500 acute care hospitals across the nation for fiscal 2011 beginning Oct. 1 will decline by 0.4%, or roughly $440 million, compared with fiscal 2010. The new reform law reduces payments by an expected 0.25%, but hospitals will receive a 2.6% inflationary increase.
“America's hospitals strongly disagree with the (CMS') final inpatient rule,” Richard Umbdenstock, president and CEO of the American Hospital Association, said in a written statement. “The rule cuts billions of dollars from the healthcare system at a time when patients are sicker, more people are losing coverage due to the economic downturn and hospitals are dealing with significant changes contained in the health reform bill.”
Additionally, the CMS said it would reduce the inflationary update for long-term-care hospitals by 3%—in part because of a measure in the 4-month-old reform law but also in an effort to offset mismatched coding. All told, approximately 420 long-term care hospitals will see a 2.5% inflationary update for fiscal 2011, or roughly $22 million more than they saw last year.