Some mar­ginal im­prove­ment

But fu­ture ad­just­ments concern hos­pi­tals

Modern Healthcare - - Front Page - Jessica Zig­mond

Hos­pi­tals were pleas­antly sur­prised last week when the CMS re­versed course and an­nounced a 1.1% in­crease in Medi­care pay­ments for 2012. But they re­main con­cerned about fu­ture ad­just­ments for cod­ing and cer­tain el­e­ments of the hos­pi­tal read­mis­sion re­duc­tion pro­gram in the agency’s fi­nal in­pa­tient PPS rule.

Ear­lier this year, the CMS had pro­posed what would have amounted to a 0.55% re­duc­tion in pay­ments for acute-care hos­pi­tals. In­stead, the CMS is­sued a pay­ment in­crease in its fi­nal rule Aug. 1 that the agency ex­pects will raise pay­ments for these fa­cil­i­ties by about $1.13 bil­lion next year.

The boost is due in part to a higher mar­ket bas­ket up­date of 3%, com­pared with the pro­posed rule’s rec­om­men­da­tion of 2.8%. But even more sig­nif­i­cant was a lower ad­just­ment for doc­u­men­ta­tion and cod­ing of -2% ver­sus the -3.15% the CMS had pro­posed.

“Clearly, CMS made the right choice from our view­point by de­cid­ing to even out the ef­fect over time for the cod­ing ad­just­ment for MS-DRGs,” said Chip Kahn, pres­i­dent and CEO of the Fed­er­a­tion of Amer­i­can Hos­pi­tals. The MS-DRG, or Medi­care Sever­ity Diagnosis Re­lated Group, took ef­fect for fis­cal 2008.

Jessica Roth, di­rec­tor of leg­is­la­tion and pol­icy at the law firm McDer­mott, Will & Emery in Wash­ing­ton, said the doc­u­men­ta­tion and cod­ing ad­just­ment is likely the big­gest change in the fi­nal rule from the pro- posed rule. This change of­fered a greater level of de­tail for cod­ing—in­creas­ing the num­ber of diagnosis-re­lated groups to 999 from 467—to dis­tin­guish the sever­ity of cases, Roth ex­plained.

The Amer­i­can Hos­pi­tal As­so­ci­a­tion still be­lieves the num­ber the CMS has es­tab­lished for changes to cod­ing is too high, ac­cord­ing to Don May, vice pres­i­dent for pol­icy at the AHA. “They had said that they be­lieved there was a to­tal of 3.9% re­main­ing” to ad­just for cod­ing changes, he said. “We would ar­gue with that num­ber.” And while the fi­nal rule called for a lower ad­just­ment than was an­tic­i­pated, it in­di­cated that the CMS will re­visit the is­sue.

“In CMS’ pro­posed rule, it al­luded to a fu­ture ad­just­ment that would be re­quired since it is not tak­ing the full -3.9% in 2012,” said a re­search note from Deutsche Bank Se­cu­ri­ties. “In keep­ing with its pol­icy in­tent to re­cover pro­gram dol­lars per­ceived to be lost to higher doc­u­ment and cod­ing, the CMS stated that be­cause only a -2% will be made in 2012, an ad­di­tional 1.9% will be

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