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CMS Proposes New Updates for Hospital Inpatient Services

On April 17, 2015, the Centers for Medicare & Medicaid Services (CMS) published a proposed rule that would update policies and payment rates for inpatient and long-term care hospital services in fiscal year (FY) 2016.

The rule proposes a 1.1 percent increase in operating payment rates for general acute care hospitals that successfully participate in the Hospital Inpatient Quality Reporting (IQR) Program and are meaningful users of electronic health records (EHR). Hospitals that do not successfully participate in the Hospital IQR Program and do not submit the required quality data will be subject to a one-fourth reduction of the market basket update. Also, the law requires that the update for any hospital that is not a meaningful EHR user be reduced by one-half of the market basket update in FY 2016.

For FY 2016, no further changes are proposed for the two-midnight policy for short inpatient hospital stays. CMS does, however, acknowledge ongoing stakeholder concerns regarding short inpatient hospital stays and long outpatient hospital visits that include observation services. The agency notes that it is carefully reviewing feedback from the public, as well as recent MedPAC recommendations, and intends to further address the two-midnight policy in the upcoming proposed rule for hospital outpatient services.

Regarding the Hospital-Acquired Condition Reduction Program, CMS is proposing four new clinical episode-based payment measures in FY 2018, which includes a measure for Kidney/Urinary Tract Infections. CMS also proposes three changes to the existing policy for catheter-associated urinary tract infections (CAUTI). Specifically, CMS is proposing to expand the population for CAUTI to include patients in select non-intensive care units within a hospital, make adjustments to the score used to determine if a hospital will receive a payment adjustment; and align extraordinary circumstance exception policies for other quality reporting and payment programs.

CMS also discusses the potential expansion of the Bundled Payments for Care Improvement (BCPI) initiative. The BCPI initiative, launched in 2011, links payments for multiple services during an episode of care into a bundled payment. CMS is seeking comments on policy and operational issues surrounding the potential future expansion of this initiative.

CMS will accept comments on the inpatient hospital proposed rule until June 16, 2015. The agency is expected to issue a final rule on or before August 1, 2015.



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