Author: Tom Entrikin | Posted: 4. August 2011 12:47
The Centers for Medicare and Medicaid Services (CMS) has finalized its FY 2012 Medicare payment rules over the last few days for acute care hospitals, long term care hospitals, inpatient rehabilitation facilities, and skilled nursing facilities. Most notably, final rules released on July 29 for skilled nursing facilities will reduce Medicare payments in FY 2012 by $3.87 billion, 11.1 percent lower than in FY 2011. This sharp drop results in part from CMS’s recalibration of case-mix indices used in calculating prospective per diem rates in the resource utilization group (RUG) treatment intensity classification system. CMS acknowledges that it made a forecasting error in the transition from RUG-III to RUG-IV in FY 2011 and that the FY 2012 reduction mainly represents CMS’s reversal of that error. Other factors in the rate reduction for skilled nursing facilities include a productivity adjustment required by the Affordable Care Act (ACA) that offsets an inflation adjustment in the rate calculations. PCG can assist states and facilities in assessing the potentially severe impact of the reductions on revenues on a facility-specific basis, which will vary greatly depending on each facility’s case-mix, each facility’s payer mix, and the extent to which the state’s Medicaid payment methods for skilled nursing facilities are driven by Medicare’s RUG-IV classification system.
CMS’s final FY 2012 Medicare payment rules for acute care hospitals, released on August 1, include a less startling 1.1 percent increase, representing $1.13 billion, but they also include key provisions designed to transition 3,400 acute care hospitals into the “value-based purchasing” system that will be launched in FY 2013 under the Affordable Care Act (ACA). These include hospital readmission measures related to patients treated for heart attacks, heart failure, and pneumonia; methods for calculating statistically aberrant, excessive readmission rates for those conditions for each hospital; and methods for calculating overall expenditures per beneficiary under Medicare Part A and Part B for each episode of care throughout a period beginning three days prior to the beneficiary’s admission to the hospital and ending 30 days after discharge. These data will help Quality Improvement Organizations (QIOs) and other health care experts to analyze and compare the extent to which patients served by competing health care delivery systems actually receive high value, coordinated care throughout their episodes of care. An estimated $850 million in Medicare payments will be reallocated among hospitals in FY 2013 based on their comparative performance under the ACA’s value-based purchasing system.
The final rules released by CMS also include a 2.2 percent ($150 million) increase in Medicare payments for 1,200 inpatient rehabilitation facilities and a 2.5 percent ($126 million) increase in payments for 420 long term care hospitals. Nearly all of the provisions in the rules released since July 29 will be effective October 1, 2011.
