The CMS is studying how and whether to replace its controversial “two-midnight” payment policy for short hospital stays in response to vigorous and persistent complaints from the provider community.
Deep within its sweeping proposed 2016 prospective payment rule (PDF) for acute and long-term-care hospitals released Friday, the agency acknowledged it has continued to receive complaints about the initiative and is studying the feedback and the recommendations of the Medicare Payment Advisory Commission. The agency said it would provide a response in a forthcoming proposed rule on hospital outpatient prospective payment systems that will be published this summer.
Elsewhere in the new draft payment rule, the agency suggests a modest 0.3% rate increase for inpatient prospective payment systems, which will mean a $120 million increase in fiscal 2016.
"These very modest increases will make it even more challenging for hospitals to deliver care patients and communities expect," the American Hospital Association said in a statement.
Conversely, for long-term-care hospitals, the CMS proposes a decrease in rates of 4.6%, or $250 million in fiscal 2016, because of a new site-neutral policy for less intensive cases.
The agency also is paying $1.3 billion less in Medicare Disproportionate Share Hospital uncompensated care funds than it paid in fiscal 2015. The decline stems from a provision of the Affordable Care Act that modifies the funding to reflect the decline in the number of uninsured patients yielded by the reform law's coverage expansions.
The newly enacted law replacing Medicare's sustainable growth-rate formula for paying doctors delayed enforcement of the two-midnight rule for six months.
MedPAC is suggesting a package of changes to the policy, including having HHS instruct recovery audit contractors, or RACs, to focus reviews of short inpatient stays on hospitals with high rates of such claims. MedPAC also suggested modifying each RAC's contingency fees to reflect the rate that its claim denials are eventually overturned in the appeals process.
The CMS will accept comments on the proposed rule until June 16 and issue a final rule by Aug. 1.