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August 3, 2007
CMS IPPS Rule Update: CMS Final Rule Hits Hospital IPPS
Despite opposition by the hospital community and Congress, CMS released final
rules last week that will bring cuts to Medicare payments for hospital inpatient
services of $1.1 billion in fiscal year 2008 and almost $20 billion over five
years. AHA and IHA are urging hospitals to keep contacting their members of
Congress to pass legislation to block these cuts. Key changes in the rules
include:
A new DRG system that creates 745 new Medicare severity-adjusted inpatient
DRGs to replace the current 538 DRGs to be phased in over two years.
A prospective "behavioral offset" adjustment to IPPS rates to account for
anticipated hospital changes in coding and documentation was retained, despite
an outcry from hospitals and a House vote to block the cuts. CMS responded by
phasing in the change over three years.
New quality measures include the required reporting of at least 28
measurements in order to receive a 3.3% market basket increase (1.3% if not
reporting measurements).
CMS will not provide higher payments for eight hospital-acquired
conditions, including three serious preventable events.
Other CMS rules affect inpatient rehabilitation facilities (IRF) and skilled
nursing facilities (SNFs) for FY2008:
- The IRF rule implements a market basket update of 3.2% but ends the
comorbidities provision that allowed certain patients to count toward the "75%
Rule."
- The SNF rule increases payments by the market basket update of 3.3% and
makes no major policy changes.
For more detailed information on quality provisions in the IPPS rule
click here.
The final rule will be published in the August 22 Federal Register; a copy
currently is available by
clicking here.
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