The Centers for Medicare and Medicaid Services (CMS) published final rules in the Federal Register on August 16 on the hospital inpatient prospective payment system (IPPS) for acute care hospitals and long term care hospitals. These rules apply to Medicare payments for discharges occurring on or after October 1, 2010 for 3,500 acute care hospitals and 420 long term care hospitals. CMS estimates that Medicare IPPS payments to acute care hospitals for operating expenses in FY 2011 will decline by 0.4 percent, or $440 million, as compared with the prior year, after taking into account all factors addressed in these rules, including significant coding adjustments. CMS estimates using similar methods that Medicare payments to long term care hospitals will increase 0.5 percent, or $22 million. The Medicare rules also add 12 measures to the quality data set that hospitals must report on to CMS in order to avoid a further 2.0 percent reduction. Quality measures will become even more significant from a hospital revenue standpoint as Medicare prepares to launch full-scale implementation of value-based purchasing for hospitals in October 2012 under the federal health care reform law. 

About Tom Entrikin

A former policy specialist with the U.S. Health Care Financing Administration (now Centers for Medicare & Medicaid Services (CMS)), Tom Entrikin has vast experience providing technical assistance to states on Medicaid eligibility, coverage, and reimbursement; provider certification and enrollment; program integrity; recovery of third party liabilities; Medicaid Management Information System (MMIS) performance specifications and operations; interagency agreements; contracts with managed care organizations; and Medicaid waiver programs. Since joining PCG in 1992, Tom has assisted in the design, development, and implementation of revenue projects for school-based health services; hospital-based and municipal projects for pregnant women, infants, and children; state services offered through youth services, child welfare, mental health, substance abuse, and public health agencies; and reimbursement systems for hospitals, long term care facilities, and community-based waiver programs. He has made presentations at national conferences on Medicaid waiver programs and participated in the development of a manual on self-determination under waiver programs for the Robert Wood Johnson Foundation.

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