Hospitals should expect to see higher Medicare inpatient payments by 0.95 percent and a decrease of 7.1 percent for long-term care in fiscal year 2017. That’s the bottom line in a massive, 2,434-page rule the Centers for Medicare and Medicaid Services dropped this week.
There’s no flipping way anyone at MedCity News read that tome, but someone at the Advisory Board Co. at least skimmed the document between Tuesday and Wednesday.
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As expected, CMS is effectively doing away with the “two-midnight” rule that treated hospital stays of less than two nights as outpatient visits. That policy drew so much ire from providers that the American Hospital Association sued the federal government in 2014 to block it.
The 2017 Inpatient Prospective Payment System rule eliminates the 0.2 percent cut previously planned for the fiscal year that begins Oct. 1 and offers a 0.6 percent bonus to compensate hospitals for reductions in 2014, 2015 and 2016.
According to the Advisory summary of the rule, inpatient hospital payments should rise by 0.95 percent in fiscal 2017, but it’s a complicated calculation for the estimated 3,330 acute care hospitals in the country.
Per the Washington-based consulting and research firm:
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The rule will increase overall inpatient hospital payment rates by 0.95 percent in FY 2017, after accounting for inflation and various required adjustments. That increase includes a 2.7 percent market-basket update for facilities that were meaningful users of electronic health records in FY 2015 and submitted data on quality metrics, adjusted by a:
- 1.5 percent payment cut to meet requirements under the American Taxpayer Relief Act of 2012;
- 0.75 percent payment cut required under the Affordable Care Act (ACA); and
- 0.3 percent productivity cut.
Included in the 2,000-plus pages was language updating payment rates for approximately 430 hospitals that provide long-term care, and those facilities won’t be happy. CMS is cutting those rates by 7.1 percent in an effort to save $363 million of taxpayer money.
Bringing the average down is the decision to cut payments by “site-neutral” LTC cases by 23 percent by moving this reimbursement to Medicare Part B from the Outpatient Prospective Payment System, Advisory said. This new policy is effective in January, since Medicare Part B follows the calendar year rather than the federal fiscal year.
CMS also is reducing the administrative burden for reporting on clinical quality measures, according to Medicare Compliance Watch. Additionally, there are updates to the Medicare Hospital-Acquired Conditions Reduction Program. the Hospitals Readmissions Reduction Program and the Hospital Value-Based Purchasing Program, Medicare Compliance Watch reported.
Photo: Flickr user Julie Meloni
