CMS Releases FY 2013 IPPS Proposed Rule – On April 24, 2011, CMS issued a proposed rule to revise the Medicare hospital inpatient prospective payment systems (IPPS) for acute care hospitals and the prospective payment system for inpatient services provided by long-term care hospitals for fiscal year (FY) 2013 (Proposed Rule). In the Proposed Rule, CMS continues to implement statutory provisions from the 2010 Patient Protection and Affordable Care Act (PPACA) and makes additional changes to the IPPS. The changes under the Proposed Rule would be applicable to discharges occurring on or after October 1, 2012.
Highlights from the Proposed Rule include the following:
- CMS projects that payment rates to general acute care hospitals will increase by 2.3 percent in FY 2013. The 2.3 percent is a net update after inflation, improvements in productivity, a statutory adjustment factor, and adjustments for hospital documentation and coding changes. CMS projects that the rate increase, together with other policies in the proposed rule and projected utilization of inpatient services, would increase Medicare’s operating payments to acute care hospitals by approximately 0.9 percent in FY 2013.
- The number of Inpatient Quality Reporting (IQR) quality measures would be reduced from 72 to 59 for FY 2015, which includes the addition of four new quality measures.
- CMS proposes adding two new conditions to the list of Hospital-Acquired Conditions (HACs): (1) Surgical Site Infection Following Cardiac Implantable Electronic Device, and (2) Pneumothorax with Venous Catheterization.
- Regarding the Hospital Readmissions Reduction Program, CMS proposes a method of calculating the ratio of a hospital’s aggregate payments for excess readmissions to its aggregate payments for all discharges. This follows last year’s IPPS final rule, where several other policies related to the Readmissions Reduction Program were finalized. CMS estimates that this adjustment will result in a 0.3% payment decrease for hospitals.
- CMS proposes increasing the timeframe for new teaching hospitals to establish their graduate medical education and indirect medical education caps from three to five years.
- CMS also proposes to undo changes to the Low-Volume Hospital Payment Adjustment that were a part of PPACA. Under the new rules, hospitals will have to be more than 25 miles from another hospital and have less than 200 discharges (under the PPACA rules, the limits were 15 miles and 1,600 discharges). In order for hospitals to receive the 25 percent payment adjustment, they must apply in writing to the fiscal intermediary or MAC by September 1, 2012.
- The “services furnished under arrangements” requirement would be postponed until FY 2014. Under that rule, only therapeutic and diagnostic services could be furnished outside the hospital under arrangements with another entity. Routine services, including bed, board, and nursing would have to be performed by the hospital.
- CMS proposes to include labor and delivery beds in the bed count for purposes of Medicare DSH and IME adjustments. CMS asserts that this harmonizes the calculation with the current method of including labor and delivery days in the patient count for the Medicare DSH adjustment.
CMS is accepting comments on the proposed rule until June 25 and anticipates publishing a final rule by August 1. The Proposed Rule can be found here.
Reporter, Adam Laughton, Houston, +1 713 276 7400, alaughton@kslaw.com.
IPPS Proposed Rule Clarifies Immediate Jeopardy in the VBP Program – In the Hospital Inpatient Prospective Payment Systems proposed rule issued by CMS on April 24 (Proposed Rule), CMS proposes a number of policies related to the Hospital Value-Based Purchasing Program (VBP Program), including clarifications regarding exclusion on the basis of “immediate jeopardy” (IJ) citations. Under the Social Security Act, a hospital is excluded from the VBP Program if it has been cited during the performance period for deficiencies that pose immediate jeopardy to the health or safety of patients. In the Proposed Rule, CMS proposes that “immediate jeopardy” be defined in the VBP Program regulations as it is currently defined for survey, certification, enforcement, and termination procedures in 42 C.F.R. § 489.3; that is, as “a situation in which the provider’s noncompliance with one or more requirements of participation has caused, or is likely to cause, serious injury, harm, impairment, or death to a resident.” Additionally, CMS also addresses what an IJ “citation” signifies for purposes of the VBP Program. After discussing the various situations in which a hospital may be cited and may correct an IJ finding identified during the survey process, CMS concludes that “citation” of immediate jeopardy within the context of the VBP Program means the identification of an immediate jeopardy situation, as noted on the Form CMS-2567 that is issued to the hospital after a survey. CMS considered whether, for purposes of the VBP Program, it would be reasonable to treat only those hospitals that failed to remove the IJ situation while a survey team was still on-site as having been “cited for an immediate jeopardy,” but CMS concluded that this approach was inequitable. In the Proposed Rule, CMS also notes that the statutory requirements of the VBP Program refer to a hospital that has been cited for “deficiencies” in the plural form. CMS proposes that for purposes of the VBP Program, “cited for deficiencies that pose immediate jeopardy” means that during the applicable performance period, the hospital had more than one survey for which it was cited for an immediate jeopardy situation on the Form CMS-2567, Statement of Deficiencies and Plan of Correction. While CMS notes that each tag included on a CMS-2567 may be considered a separate deficiency, CMS acknowledges that the tags were implemented to assist surveyors. Among other VBP-related clarifications, the Proposed Rule also includes:
- a complete list of the measures adopted for the FY 2014 VBP Program;
- a proposed definition of “base operating DRG payment amount,” as well as proposals for calculating the funding amount VBP incentive payments;
- an administrative appeals process that offers hospitals a chance to appeal the calculation of their performance assessment with respect to the performance standards, as well as their total performance score; and
- proposed measures for the FY 2015 VBP Program.
As noted in the preceding article, CMS is accepting comments on the Proposed Rule until June 25, with a final rule to be issued by August 1, 2012. The text of the proposed rule is available here.
Reporter, Christina A. Gonzalez, Houston, + 1 713 276 7340, cagonzalez@kslaw.com.
FDA & Life Sciences Practice Group Client Alert – The following client alert was published today by the firm's FDA & Life Sciences Practice Group: “CMS Issues Final Rule on Changes to the Medicare Advantage Program and the Medicare Prescription Drug Benefit Program for Contract Year 2013.” The alert is available by clicking here.
K&S Counsel Preeya Noronha Pinto to Speak at Joint AHLA/FDLI Conference – For the first time, the American Health Lawyers Association (AHLA) and the Food and Drug Law Institute (FDLI) are teaming up for an in-person program. “The Intersecting Worlds of Drug, Device, Biologics, & Health Law” will be held in Washington, DC on May 21 and 22 at the St. Regis Hotel, and will cover topics where FDA and health law intersect, including fraud, reimbursement, and clinical research. King & Spalding Counsel Preeya Noronha Pinto will be speaking on “Coordinating FDA and CMS Strategies in New Product Development,” in which she will discuss the separate and distinct regulatory expectations of FDA and CMS and ways for manufacturers to maximize future Medicare reimbursement (coverage, coding and payment) while seeking product approval. She will also provide an overview of the new FDA-CMS Parallel Review Pilot Program. To register for this program, please click here.
This bulletin provides a general summary of recent legal developments. It is not intended to be and should not be relied upon as legal advice.
>> Back to Top
