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Federal Register – CMS-1588-P; FR 5/11/12 – Proposed rules

The proposed rules were officially released today for Inpatient Acute PPS services in FY 2013 (10/1/12 – 9/30/13).  Today marks the 45 day window for hospitals to request withdrawal of a wage index reclassification that is determined to be lower than their native CBSA. 

Unfortunately, the proposed rules are based on the wage information published in February 2012 and that does not contain complete information or all of the finalized wage data.  CMS posted the final wage index file updated through May 4, 2012 that will be used in the final rules issuance.  Hospitals have one more chance to review this information to confirm that data has been posted accurately.  Any errors found in this data must be reported to CMS by June 4, 2012.

We are in the process of creating an updated wage index file using the May 4^th data and will make this available in a future news you need to know distribution.

Below are links to other summaries recently released summarizing the FY 2013 proposed rules:

Powers Pyles Sutter & Verville PC – 5/4/12

King & Spalding – Hospital Medicare Update – 5/9/12

Proposed Rules – IP PPS Acute Rules FY 2013

Inpatient PPS PC Pricer Update – FY 2012

From: CMS – 5/4/12

Text of Notification

The Fiscal Year (FY) 2012 Inpatient Prospective Payment System (PPS) PC Pricer has been updated with newer provider data. The latest version is now available on the Inpatient PPS PC Pricer website in the “Downloads” section. This PC Pricer is for claims dated from October 1, 2011 to September 30, 2012.

Federal Register – CMS-1588-P; Filed 4/24/12; FR date 5/11/12 – Proposed rules CMS filed the proposed rules on Tuesday 4/24 for FFY 2013.  I have included several links below concerning this 1,313 page document and related tables.  CMS is proposing a net increase of 2.1%  (3.0% market basket less .9% ACA required reductions) for providers that report the required quality measure information and .1% for providers that do not.  After consideration of coding adjustments related to FFY 2008 – 2010, the adjusted PPS rate increase is 2.23% as compared to FFY 2012.  Overall Capital PPS rates increased .71% compared to FFY 2012.
Included below is a table summarizing the changes to the PPS rates:

Preliminary wage index information changed significantly in California.  The rural statewide average index increased 3% from 1.1950 in FFY 2012 to 1.2321 in the preliminary FFY 2013 rules.  Santa Cruz has the highest wage index in the Country at 1.7326, topping the 1.7 level for the first time that I am aware of.  The San Francisco wage index increased slightly below 6% to 1.6344. We have been informed that there appears to be an error in this index as the Occupational Mix adjustment had not been properly applied.  Included below is a 3 year comparison of the wage index for California, Minnesota, Nevada and Washington.

There are two significant reimbursement additions of note for FFY 2013 related to the Hospital Readmission Reduction program and implementation of the Value Based Purchasing (VBP).   Both of these programs are requirements of ACA.

Hospital Readmission Reduction Program

• Effective October 1, 2012
• Hospital Specific in its application.  New CMS Table 15 contains the adjustment factor to be applied to each Hospital
• Factor will be used to adjust the PPS base rate
• The maximum reduction in FFY 2013 is 1%.  This adjustment factor maximum will be increased to 2% in FFY 2014 and 3% in FFY 2015.
• The adjustment is derived from an analysis of the readmission rates for the following 3 procedures:
• Pneumonia
• Heart Failure
• Acute Myocardial Infarction
• CMS is proposing to expand the readmission analysis to 4 procedures in FFY 2015
• CMS Table 15 contains the hospital specific impact based on services covering 7/1/07 – 6/30/10.  The final rules will use updated information covering 7/1/08 – 6/30/11.

Hospital Value Based Purchasing Program

• Effective October 1, 2012
• Hospital Specific in its application.  New CMS Table 16 contains the adjustment
  factor to be applied to each Hospital.
• Factor will be used to adjust the PPS base
  rate.  Implementation of this is
  projected to take place on January 1, 2013. Inpatient service claims will
  be reprocessed back to October 1, 2012.
• The Value Based Purchasing pool increases over the
  next 5 years:
• FFY 2013 – 1.00%
• FFY 2014 – 1.25%
• FFY 2015 – 1.50%
• FFY 2016 – 1.75%
• FFY 2017 – 2.0%

• CMS Table 16 contains the net adjustment factor that will be applied to the PPS base rate.  The 1% PPS rate reduction is included in this overall factor.  The table in  the proposed rule will be updated in the final rule that will include data  covering 7/1/11 – 3/31/12.

Other
Changes of Note

• Outlier threshold increases to $27,425 for FFY 2013  from $23,375 in FFY 2012
• Medicare Dependent Hospitals (MDH) program will end on September 30, 2012.  CMS has  proposed rules related to the timing of those MDH’s that will be submitting requests to become a Sole Community Hospital.
• The Low Volume Adjustment additional two year (FFY 2012 -2012) reimbursement formula change implemented by ACA will revert to the original methodology on October 1, 2012.
• Available Bed Days used for Medicare DSH and IME will be modified to include Labor and Delivery bed days consistent with their treatment of observation, swing-bed and hospice days.  This provision would be effective for cost reporting periods beginning on or after October 1, 2012.
• New teaching programs establishment of the residency cap are proposed to be developed over a five year window instead of the current three year window.  This is proposed to be effective on or after October 1, 2012.

This is simply our first pass of these proposed rules. Other important items discovered will be shared with you in a future e-mail.

CMS links related to the proposed rules:

• Inpatient PPS Fact Sheet
• Proposed Rule Tables
• Proposed Rule Data & Impact Files

See more: Inpatient PPS FY 2013 Rates for Acute Hospitals

CMS Releases Updated Wage Data File – FFY 2013

From: CMS – 2/22/12

CMS released the revised FY 2013 wage index and occupational mix files earlier this week.  The wage data in this file includes the FI/MAC desk reviews.  An average hourly wage comparison by CBSA file is also included comparing the current wage information to FY 2012. 

March 5^th is the next deadline for hospitals to submit requests (including supporting documentation) for:

1. Corrections to errors in the February 2012 PUF or mishandling wage index data.
2. Revisions of the desk review adjustments (appeal) to their wage index data included in the February 2012 PUF.

The FIs/MACs must receive these requests and the supporting documentation by this March 5, 2012 deadline.

Inpatient Prospective Payment System FY2012 Pricer File Update

From: CMS E-mail – 2/8/12

Text of E-mail

The FY2012 Inpatient Prospective Payment System (INP PPS) PC Pricer has been updated with newer provider data, and is now available on the CMS website at http://www.CMS.gov/PCPricer/03_inpatient.asp. This Pricer is for claims dated from 10/01/2011 to 09/30/2012, and the update is dated 02/07/2012.

From: Federal Register – 2/1/12

CMS issued corrections to the Final FFY 2012 rules on February 1, 2012.  The changes were very minor in nature.

Summary from Federal Register

This document corrects technical errors that occurred in the Addendum of the final rule entitled “Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Fiscal Year 2012 Rates” which appeared in the August 18, 2011 Federal Register.

From: HFMA Region 11 Conference – 1/30/12

Paul Crofton from the PRRB shared in a session earlier this week at the HFMA Region 11 conference, that CMS would be releasing the long awaited SSI information within the next 60 to 90 days.  The final PPS rules for FFY 2011 modified the match process and the paid claims information included in the SSI match from 6 months after the fiscal year to 15 months of paid claims information after the fiscal year (See 8/16/10 FR Excerpt). Based on the new criteria SSI criteria effective for issuances on or after October 1, 2010, the we should be anticipating the following SSI issuances:

•     FFY 2006 – Reprocessed Listing
•     FFY 2007 – Reprocessed Lising
•     FFY 2008 – New Release (After 3/31/10)
•     FFY 2009 – New Release (After 3/31/11)
•     FFY 2010 – New Release (After 3/31/12)

The delay in the SSI issuance has created a tremendous back log in the finalization of Medicare Hospital cost reports (Providers Qualifying for DSH).  We will be anticipating a deluge of finalized cost reports for the Spring and Summer of 2012.

From: CMS Transmittal 2395 (Pub 100-04) – 1/26/12

Summary of Changes

This instruction implements the Multiple Payment Reduction (MPPR) for physician services for certain diagnostic imaging procedures in CAHs.

From: CMS E-mail Notification – 1/10/12

Text of CMS E-mail:

Section 302 of the Temporary Payroll Tax Cut Continuation Act of 2011 (TPTCCA) extends Section 508 reclassifications and certain special exception wage indexes for 2 months, from October 1, 2011, through November 30, 2011. For the period beginning on October 1, 2011, and ending on November 30, 2011, Section 302 also requires removing Section 508 and special exception wage data from the calculation of the reclassified wage index if doing so raises the reclassified wage index. All hospitals affected by Section 302 of the TPTCCA shall be assigned a special wage index effective for only October and November 2011. We will apply the provision to both inpatient and outpatient hospital payments. For hospital outpatient payments only, special exception hospitals and other reclassified hospitals that would have a higher wage index based on the removal of section 508 and special exception hospitals’ wage data will receive a special exception wage index from January 1, 2012, through February 29, 2012.

IPPS and OPPS claims from section 508 hospitals, IPPS special exception hospitals and IPPS non section 508 hospitals affected by section 302 with discharge dates on or after October 1, 2011, through November 30, 2011, will be reprocessed no later than December 31, 2012, in accordance with the TPTCCA.

OPPS claims for hospitals reclassified for special exceptions and other affected reclassified hospitals that completed processing before the wage index was updated will be reprocessed by early February, 2012.

Please note that for OPPS hospitals, a section 508 hospital that has geographic reclassification extended from October 1, 2011, to November 30, 2011, will revert to its previously scheduled October 1, 2011, reclassification or its home area wage index from December 1, 2011, to December 31, 2011. OPPS special exception hospitals and reclassified hospitals that benefit based on removal of section 508 and special exception hospital data shall revert to the CY2012 rule wage index, beginning March 1, 2012. IPPS hospitals shall revert to their wage index promulgated in the FY2012 rule located on our website at http://www.CMS.gov/AcuteInpatientPPS/FR2012/itemdetail.asp?itemID=CMS1250520.

Inpatient PPS Pricer Correction – FY 2012

CMS E-mail notice – 12/8/11

Text of CMS E-mail

The Fiscal Year (FY) 2012 INP PPS PC Pricer has had a correction made to it and it has been updated on the CMS website. This PC Pricer is for claims dated from 10/01/2011 to 09/30/2012. The update is dated 12/08/2011