- On Tuesday CMS issued its final rule on FY 2015 inpatient hospital payment and penalty rates.
- CMS is proposing a 1.4% payment increase for acute care hospitals and a 0.9% raise for long-term care hospitals. The maximum Medicare penalty stemming from the Hospital Readmissions Reduction Program will also rise from 2% to 3%, and providers whose Hospital Acquired Conditions (HACs) rates are in the highest quartile in the country will see an additional 1% reduction in Medicare payments.
- Almost all of the changes reflected in the final rule will apply to discharges that occur on or after October 1, 2014.
In addition to the aforementioned payment and penalty proposals, CMS also announced that it would be raising the share of Medicare money available under Obamacare's Hospital Value-Based Purchasing Program (VBP) to 1.5% of base operating diagnosis related group (DRG) funding for all participating providers, or approximately $1.4 billion in FY 2015.
Many of the provisions addressed by the CMS rule center on nascent Affordable Care Act programs aiming to shed wasteful spending in the healthcare sector. According to CMS, Medicare hospital readmissions declined by 150,000 between January 2012 and December 2013. Last year was especially rough on hospitals as Medicare penalized 1,451 hospitals under VBP while giving raises to 1,231 other providers. The penalties could wind up being even higher this year as the HAC prevention program takes effect, making it imperative for hospitals to renew their efforts to score well on patient satisfaction and overall quality metrics surveys.
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