CMS Releases FFY 2013 IPPS Final Rule - Aug. 14, 2012

The Centers for Medicare & Medicare Services (CMS) released on Aug. 1 the inpatient prospective payment system (IPPS) final rule for federal fiscal year (FFY) 2013. Items of note in the rule include the following:

• Labor and delivery bed days will be included in Medicare disproportionate share hospital (DSH) and indirect medical education (IME) payment calculations. NAPH and other hospital associations urged CMS to continue to exclude labor and delivery bed days from these calculations because these days are directly associated with healthy newborn days, which are not usually covered by Medicare.
• Three new Value-Based Purchasing (VBP) Program measures will be included for FFY 2015: a patient safety composite measure, a central-line associated bloodstream infection (CLABSI) measure and a Medicare spending per beneficiary measure.
• The methodology for calculating the VBP payment adjustments has been established, with no significant changes from the proposed rule.
• The IPPS payment update factor is 1.8 percent for FFY 2013 (representing a market basket increase of 2.6 percent, less a 0.7 percentage point productivity adjustment and an additional reduction of 0.1 percentage point, as required by the Affordable Care Act). The 1.8 percentage point increase applies to all acute care IPPS hospitals that satisfactorily report quality measures. Those hospitals that fail to report Inpatient Quality Reporting Program measures will receive a total update of -0.2 percent (i.e., a 1.8 percent update less a negative 2 percentage point adjustment for failing to report quality measures).