CMS Releases Final Rule on 2014 Inpatient Payments

Hospital inpatient prospective payment system rates will increase by 0.7 percent in fiscal year 2014, according to a final rule issued by CMS.

The pay adjustment includes an initial 2.5 percent market basket update for hospitals that submit data on quality measures and a 0.5 percent update for those that don't submit quality measure data.

The rule also takes into account several reductions required by law, including a 0.3 percentage point cut under the Patient Protection and Affordable Care Act and a productivity cut of 0.5 percentage points. CMS will also reduce pay rates by 0.8 percentage points under the American Taxpayer Relief Act and 0.2 percentage points to offset the effect of the agency's inpatient admission and medical review criteria.

Additionally, Medicare will reduce its payments to disproportionate share hospitals by approximately $550 million in 2014 as required by the PPACA.

The final rule also finalized a proposal to generally consider inpatient admissions spanning two midnights as qualifying for payment under Medicare Part A. The American Hospital Association has issued a statement asserting that this change "is unlikely to reduce the number appeals of Part A claims denials," despite its attempt to clarify inpatient admission criteria.  

Furthermore, CMS finalized a proposal that will place a time limit on rebilling Part A claims denied by Medicare contractors, allowing rebilling only for claims within one year of the date when the services were provided.

The AHA said this change in policy "demonstrates that CMS is unwilling to fundamentally change its rebilling policy" and that the change will have "little practical effect overall."  The AHA will proceed with a lawsuit against CMS challenging the agency's payment denial policy.

More Articles on Medicare Payments:
Congress Considers Bill to Equalize Physician, Hospital Cancer Treatment Pay
CMS Releases Final Rules on Inpatient Rehab, Skilled Nursing Facility Pay
How is the Country's Largest Medicare Provider Preparing for Healthcare Reform? 

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