The Center for Medicare and Medicaid Services' final rule to update Medicare's inpatient prospective payment system rates for hospitals beginning Oct. 1 will increase overall payments to hospitals by 1.1%, but also will begin implementing policies that ultimately will cut hospital reimbursement if patients are readmitted too quickly.
Hospitals are ramping up quality improvement initiatives that they hope will decrease readmission rates by October 2012, when those pay cuts will start to take effect.
“We see preventable readmissions, but we also see a whole large group of nonpreventable readmissions,” said Dr. Lauren Doctoroff, a hospitalist at Beth Israel Deaconess Medical Center, Boston. “What the payment system is trying to do is measure all-cause readmissions, and this makes most hospitalists nervous.”
The final Medicare Inpatient Prospective Payment System rule estimates that total payments to acute care hospitals for inpatient services occurring in fiscal year 2012 (which begins Oct. 1) will increase by about $1.1 billion to total approximately $100 billion. Each year, the rule spells out recalculated payments for individual codes, leading to a mixed bag of increases and decreases for specific procedures.
This year, the CMS rule also expanded the Hospital Inpatient Quality Reporting Program, with a greater focus on patient outcomes and experiences. The agency added a reporting measure involving the rates of methicillin-resistant Staphylococcus aureus (MRSA) bacteremia, along with reporting measures for stroke and venous thromboembolism.
However, the agency said that it is not adopting its prior proposal to add contrast-induced acute kidney injury to the list of hospital-acquired conditions that are not eligible for Medicare payments. In an interview, Dr. Doctoroff welcomed that news, saying “it's a condition that's hard to prevent.”
But for hospitals, the most important provisions in the new rule are those asking them to begin measuring readmission rates for three conditions (acute myocardial infarction, heart failure, and pneumonia) in preparation for Medicare to begin cutting reimbursement for “excessive” all-cause readmission rates. The rule also outlines a methodology to calculate those excessive readmission rates.
The CMS defines readmission as “occurring when a patient is discharged from the applicable hospital and then is admitted to the same or another acute care hospital within a specified time period from the time of discharge from the index hospitalization.”
The CMS has set 30 days as the time period it will use to determine if a patient was readmitted unnecessarily. Beginning in 2012, it will begin cutting overall payments for hospitals that have numbers the agency deems excessive.
“As many as one in three Medicare patients who leave the hospital will be readmitted within 30 days of discharge,” the agency said in a statement. “A large portion of these readmissions can be avoided through well-coordinated, high-quality hospital care.”
The American College of Cardiology has advocated use of registries to report on performance measures, however no registries were included in the final rule.
Nuts and Bolts of the Final Rule
The CMS's final rule to update Medicare's inpatient prospective payment system rates includes the following:
▸ Reporting measures for the rates of MRSA bacteremia, stroke, and venous thromboembolism.
▸ No adoption of its prior proposal to add contrast-induced acute kidney injury to the list of hospital-acquired conditions that are not eligible for Medicare payments.
▸ A directive that hospitals should begin measuring readmission rates for three conditions (acute MI, heart failure, and pneumonia) in preparation for Medicare to begin cutting reimbursement for “excessive” all-cause readmission rates.
▸ Methodology to calculate those excessive readmission rates.
▸ More than 20 new procedure codes, including codes for atherectomy and for endovascular and transapical heart valve procedures.
▸ A Medicare spending-per-beneficiary measure to assess Part A and Part B beneficiary spending from 3 days before a hospital admission through 30 days after a patient is discharged, in an effort to encourage hospitals to provide high-quality care to Medicare beneficiaries at a lower cost.