CMS Issues Proposed IPPS and LTCH Rule
On April 30, CMS issued its hospital inpatient prospective payment system (“IPPS”) and long-term care hospital (“LTCH”) proposed rule for fiscal year 2015. The overall payment update for fiscal year (“FY”) 2015 would be 1.3% for general acute care hospitals and 0.8% for LTCHs.
Also included in the proposed rule were potential payment cuts for hospital readmissions. As part of the Hospital Readmission Reduction Program, Medicare payments could be reduced by a maximum of 3%, up from 2%. The penalty first took effect in October 2012.
CMS also proposes to implement the Hospital Acquired Condition (“HAC”) Reduction Program. Beginning in FY 2015, the poorest performing hospitals with regard to HACs could have their Medicare inpatient payments reduced by 1%.
The rule also includes ACA-mandated Medicare Disproportionate Share Hospital (“DSH”) reductions, which would reduce overall Medicare DSH payments by 1% in FY 2015 compared to FY 2014.
Finally, CMS is proposing to update the wage index by using the most recent labor market area delineations issued by the Office of Management and Budget using 2010 Census data with a transition period for certain hospitals.
CMS will accept comments on the proposed rule until June 30, 2014 and will respond to comments in the final rule to be issued by August 1, 2014.
Final Deadline Announced for ICD-10 Coding
On May 1, a CMS spokeswoman issued a statement that HHS expects to release an interim final rule in the near future that will include a new compliance date that would require the use of the ICD-10 billing code system beginning October 1, 2015. The rule will also require HIPAA-covered entities to continue to use ICD-9-CM through September 30, 2015.
Congress recently passed legislation (PL-113-93) that included an open-ended delay of ICD-10, giving authority to CMS to decide when it would begin. The legislation pushed back the transition to the new coding system for at least a year but didn’t include a compliance date.
CMS Proposes FY 2015 Payment Rates for Three Facility Types
On May 1, CMS issued proposed rules for skilled nursing facilities, inpatient rehabilitation facilitiesand inpatient psychiatric facilities (“IPFs”). Payments to the nursing facilities would increase by 2% over payments in FY 2014, payments to the rehabilitation facilities would increase by about 2.2% and payments to the psychiatric facilities would increase by 2.1%. The proposed payment rates would apply for the 12-month period beginning October 1, 2014.
New Medicare Payment System Could Boost FQHCs
On April 29, CMS published a final rule that could boost Medicare payments to Federally Qualified Health Centers (“FQHCs”) by as much as 32%. Under the new prospective payment system for FQHCs, Medicare will pay health centers a single fee of $158.85 for each patient each day. That rate may be adjusted for geographic variations in cost. Medicare currently pays health centers a flat rate for each Medicare patient without adjustments. That rate is subject to productivity standards and upper payment limits, which are $111.67 for rural clinics and $129.02 for urban clinics.
The rule will be published in the Federal Register on May 2 and the new payment system will be implemented starting with the new fiscal year on October 1, 2014. While it is a final rule, CMS will accept comments on the rule until July 1, 2014.
Deputy Administrator Jonathan Blum Leaving CMS
CMS Deputy Administrator Jonathan Blum announced on April 22 that he plans to leave the agency on May 16. Blum has served at CMS for more than five years. CMS Administrator Marilyn Tavenner announced Sean Cavanaugh, the current Deputy Director for the Center for Medicare and Medicaid Innovation (“CMMI”), will fill Blum’s role at CMS.
Bills Introduced This Week
H.R. 4494: Rep. DeGette (D-CO) introduced legislation that would direct the HHS Secretary to establish a Regenerative Medicine Coordinating Council among the federal health agencies. The council would then be tasked with developing a national strategy to support research into regenerative medicine.
Next Week in Washington
Sylvia Burwell, the nominee to replace Kathleen Sebelius as Secretary of HHS, will go before the Senate Health, Education, Labor and Pensions (“HELP”) Committee for a confirmation hearing on May 8. Burwell will also have a confirmation hearing at the Senate Finance Committee but that date is still pending. The HELP Committee will not vote on Burwell’s nomination, but the Finance Committee will have to vote for her nomination to go to the Senate floor.
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