2016 Inpatient Prospective Payment System Proposal Highlights

Apr 23, 2015 | Healthcare Industry News, Hospital Finance Efficiency

In a 1,500-page document, the Centers for Medicare and Medicaid Services (CMS) recently proposed changes to the inpatient prospective payment system (IPPS). The CMS' suggested revisions to the IPPS deals with payment rates for acute and longer-term care hospitals, changes to the disproportionate share hospital system and will update current readmissions program and quality reporting guidelines. The official proposal is expected to updated in August 2015.

According to the published document, the CMS proposes to raise the payment rate by 1.1 percent for acute hospitals that demonstrate meaningful use of electronic health records. The increased rate takes into account a 0.8 recoupment charge to recover around $11 billion tied to overpayments for Medicare diagnosis-related groups bound to the American Taxpayer Relief Act of 2012. The CMS expects total Medicare spending on inpatient hospital services to increase by $120 million in fiscal 2016.

Furthermore, changes to the value-based purchasing program would mean that a care coordination measure would be added to the program by 2018 and a 30-day mortality measure for chronic obstructive pulmonary disease by 2021. The CMS also said it would improve the readmission measure tied to pneumonia and adopt an extraordinary circumstance option and adopt an extraordinary circumstance option, accounting for events such as natural disasters, which could affect readmissions. Finally, long-term care hospitals must submit three additional quality measures to the CMS in relation to skin integrity, mobility and falls. The organization aims to begin reporting quality data on long-term care hospitals by fall 2016.

With revisions to the IPPS on the horizon, hospital administrators can reduce their backlog and focus on high-priority cases by availing of the outsource receivables management services that Professional Medical Services has to offer.