News: IPPS proposed rule released

CMS issued the fiscal year (FY) 2017 IPPS proposed rule yesterday with updates to several quality initiatives. Payment rates will increase by 0.9% in FY 2017, after inflation and other adjustments for hospitals participating in the Inpatient Quality Reporting (IQR) Program and meaningful EHR use, according to a CMS Fact Sheet.

 

This reflects the projected hospital market basket update of 2.8% adjusted by -0.5% for multi-factor productivity and -0.75% in accordance with the Affordable Care Act. It also reflects a proposed 1.5% reduction for documentation and coding required by the American Taxpayer Relief Act of 2012.

 

In the rule, CMS proposes two adjustments to reverse the effects of the 0.2% cut it instituted along with the 2-midnight rule, which has been the source of an ongoing legal challenge by the American Hospital Association and other parties. CMS proposes a permanent adjustment of approximately 0.2% to remove the cut for FY 2017 onward, and a temporary adjustment of 0.6% to address the retroactive impacts of this cut for FYs 2014, 2015 and 2016, CMS states.

 

CMS additionally proposed five changes to the Hospital-Acquired Conditions (HAC) Reduction Program, as well as updates to the IQR program, changes to the Hospital Readmissions Reduction Program, and updates to the Hospital Value-Based Purchasing Program.

 

CMS also announced expected changes to MS-DRGs 469 and 470, related to major joint replacement and their relative weights related to the Bundled Payments for Care Improvement Initiative. Another shift, comes from the current MS-DRG 228-230, other cardiothoracic procedure in which CMS eliminated the DRG with a CC only, according to James S. Kennedy, MD, CCDS, president of CDIMD Physician Champions.  

Proposed changes with the ICD-10-CM/PCS code set are also worth further investigation, Kennedy says, and can be found in Tables 6A and 6B of the proposed rule.

 

“There’s a lot of great history in the adaptation of ICD-10-CM/PCS to MS-DRGs that is worth reading. I believe once Medicare analyzes the FY2016 MedPAR (which I suspect that they are doing now as they receive data) we will see major changes in the CC/MCC table. In general, I believe that this is a thoughtful Rule, one warranting ongoing study,” Kennedy says.

 

For more information on the rule, see CMS’ fact sheet. Comments are due to CMS by June 16, and the agency expects to issue a Final Rule by August 1. Once finalized, changes will become effective October 1.

 

Editor’s note: Portions of the article were originally published on Medicare Compliance Watch and the Revenue Cycle Daily Advisor. Stay informed of the latest news and additional information on the ACDIS Blog and social media.