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Insights

Aug 07, 2014

CMS Releases FY15 IPPS Final Rule; Policies Continue to Focus on Transparency and Quality

Published

Aug 07, 2014

On Aug. 4, CMS released the Fiscal Year (FY) 2015 Inpatient Prospective Payment Systems (IPPS) final rule. The rule made important changes to quality reporting programs and clarifies criteria for hospital inpatient admissions, in addition to its regular payment policies.

The general acute care hospital payment rate update will be 1.4 percent which includes a market basket update of 2.9 percent. CMS projects total IPPS operating payments will decrease by approximately 0.6 percent and total Medicare spending on inpatient services will decrease by approximately $756 million. Long-term care hospitals will experience an overall increase in payments of 1.1 percent.

Overall, Medicare Severity Diagnosis-Related Group (MS-DRG) payment rates remain largely unchanged from the current fiscal year.  However, 6 MS-DRGs decreased by 10 percent or more, whereas 39 MS-DRGs increased by 10 percent or more.  The rule is also unlikely to have any direct impact on physicians. However, providers will continue to be integral to hospitals’ efforts to meet value-based purchasing and quality improvement metrics.  

The finalized proposals go into effect on October 1, 2014. 

View the final rule.

Select Rule Highlights:

• CMS Received Mostly Positive Feedback on Developing an Alternative Payment Methodology for the “Two-Midnight Rule,” which will remain in place while they look for alternatives. 

• Three Technologies Received New Technology Add-on Payment (NTAP): 1) CardioMEMS™ Heart Failure System (CardioMEMS, Inc.), 2) MitraClip® System (Abbott Vascular), and 3) Responsive Neurostimulator (RNS®) System (NeuroPace, Inc).

• Increase in Hospital Charge Transparency Moves Forward: Per the ACA, CMS established guidelines implementing the hospital requirement to make public their standard charges for services or policies for receiving and fulfilling public requests to review their list of charges.

• Two New MS-DRGs for Endovascular Cardiac Valve Replacement: CMS created MS-DRGs 266 and 267 (Endovascular Cardiac Valve Replacement with MCC and without MCC respectively) based on CMS’ assertion that patients receiving endovascular cardiac valve replacements differ significantly from patients who undergo open chest cardiac valve replacement.

• Focus on Quality Leads CMS to Propose Significant Revisions to IQR, Adds High Profile Infections to VBP, and one measure to Readmissions Program: CMS is removing 19 of the 20 measures proposed for retirement. SCIP-INF-4 (Cardiac surgery patients with controlled postoperative blood glucose) was retained as it was updated for the 2014 collection period. CMS finalized 11 new measures to the IQR program for FY 2017.  Additionally, CMS finalized its proposal to include two outcome measures (methicillin-resistant staphylococcus aureas (MRSA) bacteremia and clostridium difficile (c. diff) infections) as well as one process measure (early elective deliveries) to the FY 2017 VBP program. CMS finalized to add readmissions due to coronary artery bypass graft (CABG) surgical procedures to the Hsopital Readmissions Reduction Program.

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