CMS Releases Proposed IPPS Rule for Fiscal Year 2009

The Centers for Medicare & Medicaid Services (CMS) recently released a display copy of a proposed rule (Proposed Rule) that would make payment and policy changes to the Medicare hospital inpatient prospective payment system (IPPS) for fiscal year (FY) 2009. In brief, the proposed changes include:

• Market Basket Update.  For FY 2009, CMS projects that the market basket update will be 3.0 percent. However, hospitals that do not successfully report on the quality measures in FY 2009 would receive a market basket update of 1.0 percent.
• Quality Measures.  CMS proposes to add 43 new measures, and retire 1 measure, for the FY 2009 reporting period.  If adopted, the total number of measures for reporting for the FY 2010 update would be 72.  CMS has released a Fact Sheet on these proposed changes.
  
• Hospital Acquired Conditions.  CMS proposes to add additional categories of conditions that when acquired in the hospital will no longer lead to higher Medicare payment, including at least 1 from the National Quality Forum "never events" list that is associated with hypoglycemia.  CMS has released a Fact Sheet on these proposed changes.
• Relative Weights.  As part of the 3-year transition to cost-based weights, CMS proposes to base relative weights 100 percent on costs in FY 2009.  CMS also proposes to add a cost center to the cost report to allow costs and charges for relatively inexpensive medical supplies to be reported separately from the costs and charges of more expensive devices.
• Behavioral Offset.  Pursuant to the TMA, Abstinence Education and QI Programs Extension Act of 2007, CMS proposes to reduce the payment rates by -0.9 percent for FY 2009.
• MS-DRG Classifications.  CMS proposes changes to certain MS-DRG classifications for FY 2009, including MS-DRG 245 (AICD Lead and Generator Procedures).
• Outlier Threshold.  Based on current data, CMS proposes an outlier threshold of $21,025 for FY 2009, which would be lower than the threshold for FY 2008 ($22,185).
• Post-Acute Transfer Policy.  For FY 2009, CMS would apply the post-acute transfer policy to 273 MS-DRGs.
• New Technology Add-On Payments. Among other things, CMS would set July 1 of each year as the deadline by which new technology applicants must receive FDA approval or clearance to allow CMS enough time to fully consider all new technology add-on criteria in time for publication of the annual IPPS final rule.
• Wage Index and Data.  For FY 2009, CMS proposes a national average hourly wage of $32.2252, which would be an increase of 4.2 percent over the figure for FY 2008.  CMS also proposes to apply a statewide (rather than a nationwide) rural and imputed floor budget neutrality adjustment to the wage index beginning in FY 2009. CMS has released a background document addresses some of these changes.
• Geographic Reclassification.  CMS proposes to change the average hourly wage (AHW) comparison criteria that a hospital must satisfy for the Medicare Geographic Classification Review Board to approve a geographic reclassification.  For instance, CMS proposes that an urban hospital seeking reclassification have an AHW of at least 88 percent (rather than 84 percent) of the AHW for the area to which it seeks reclassification.
• EMTALA.  CMS proposes changes to the Emergency Medical Treatment and Labor Act (EMTALA) requirements, including changes that would allow hospitals to comply with the on-call list requirement by participating in a formal community call plan.  CMS also proposes to clarify the EMTALA obligations of hospitals with specialized capabilities.

In the Proposed Rule, CMS proposes to modify the physician self-referral "stand in the shoes" provisions to accommodate certain financial transactions between physicians and academic medical centers or integrated healthcare delivery systems.  CMS also solicits public comment on gainsharing arrangements and on a mandatory "Disclosure of Financial Relationships Report" that would collect information about the financial relationships between hospitals and physicians. 

The proposed IPPS changes would be applicable to discharges occurring on or after October 1, 2008.  With CMS' release of the display copy of the Proposed Rule, CMS also released a Fact Sheet addressing some of the proposed IPPS payment and policy changes for FY 2009.  The Proposed Rule is scheduled to appear in the Federal Register on April 30, 2008.

Comments

[Tomaso]

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