Two major health care organizations have "serious concern" that CMS's proposed Inpatient Prospective Payment System (IPPS) for fiscal year (FY) 2013 includes four measures that will harm hospitals.
AHA's three concerns
In a letter to CMS Acting Administrator Marilyn Tavenner, the American Hospital Association (AHA) warns that the proposed IPPS contains:
"Excessive" cuts to documentation and coding reimbursement, based on CMS using an outdated methodology that is "fundamentally flawed."
Unfair penalties for hospitals with above average 30-day readmissions rates, with AHA arguing that CMS's readmissions criteria do not exclude planned and unrelated readmissions, as mandated by the Affordable Care Act, or account for disparities in readmission rates that may be affected by high-risk patient demographics.
Inappropriately punitive measures for sole community hospitals (SCHs). If an SCH does not report any information that could have affected its initial classification as an SCH, CMS will retroactively void the hospital's SCH status.
Meanwhile, the Association of American Medical Colleges (AAMC) says it "is deeply troubled by" CMS's Medicare's indirect medical education (IME) payment cuts and, like the AHA, concerned by the documentation and coding adjustments.
Under the proposed IPPS, CMS estimates a decrease of $170 million in payments to teaching hospitals, given that the rule changes certain classification so inpatient beds will include labor and delivery beds, thereby decreasing payment for the same number of residents.
AAMC cautions that cutting IME support will reduce teaching hospitals and their physicians' ability to "care for the most vulnerable people in our communities and will endanger [certain] critical services… that often are unavailable elsewhere." Furthermore, teaching hospitals depend on IME support to train care providers, including physicians, nurses, and first responders, it says (AHA News, 6/19; McKinney, Modern Physician, 4/26 [subscription required]; AAMC release, 4/25).