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:
See more: Inpatient PPS FY 2013 Rates for Acute Hospitals
