IPPS Proposed Rule Details Payment Rates and Quality Measures for FY 2013

The Centers for Medicare and Medicaid Services (CMS) has issued a proposed rule for its inpatient prospective payment system (IPPS), which if finalized, will increase average Medicare inpatient payments to general acute care hospitals by 2.3% for fiscal year (FY) 2013. Hospitals that do not successfully participate in the Inpatient Quality Reporting program would receive a payment rate update of 0.3%. According to an April 24, 2012, CMS press release, the proposed rule will strengthen the relationship between payment and care quality in several ways. First, the rule continues the implementation of the Hospital Readmissions Reduction Program, which was mandated by the Patient Protection and Affordable Care Act (PPACA) and initiated by CMS’s IPPS final rule for FY 2012. In the IPPS proposed rule for FY 2013, CMS proposes a methodology for how the agency will calculate the readmissions adjustment factor and how that factor will be applied to a hospital’s base operating diagnosis-related group payment. Second, and also mandated by PPACA, the proposed rule would strengthen the Hospital Value-Based Purchasing Program by adding a Medicare spending-per-beneficiary measure, which would affect payments beginning in FY 2015.