CMS IPPS Final Rule for FY 2015 Updates Payment Rates, Quality Reporting Requirements

August 13, 2014 | Strategic Insights for Health System


​The Centers for Medicare and Medicaid Services (CMS) has issued a final rule updating the annual payment rates and quality reporting requirements for hospital inpatient prospective payment systems (IPPS) in fiscal year (FY) 2015. According to the rule, in FY 2015, the payment rate update to general acute care hospitals will be 1.4% and the rate update for long-term care hospitals will be 0.9%. For its Hospital Value-Based Purchasing Program, CMS is increasing the applicable percent reduction (the portion of Medicare payments available to fund the value-based incentive payments under the program) to 1.5% of the base operating diagnosis-related group payment amounts to all participating hospitals. Under the Hospital Readmissions Reduction Program, the maximum reduction in payments will increase from 2% to 3% as required by law. CMS will also begin to assess hospitals' readmissions penalties using five readmissions measures endorsed by the National Quality Forum, including two new conditions: elective total hip or knee arthroplasty and chronic obstructive pulmonary disease. Also beginning in FY 2015, CMS will implement the Patient Safety and Affordable Care Act's Hospital-Acquired Condition (HAC) Reduction Program.

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