The Centers for Medicare and Medicaid Services (CMS) Dec. 1 released a notice outlining the basis for a 0.2 percent payment reduction in Inpatient Prospective Payment Systems (IPPS) rates to account for expenditures resulting from the two-midnight policy. CMS issued the notice in response to the federal district court ruling in Shands Jacksonville Medical Center, Inc., et al. v. Burwell.
In fiscal year (FY) 2014, CMS adopted a 0.2 percent ($220 million) payment reduction to offset a projected net shift of 40,000 patient encounters from outpatient to inpatient settings. The AAMC submitted an Aug. 31 letter to CMS Acting Administrator Andy Slavitt, urging the agency to consider repealing the reduction by reexamining and adjusting original assumptions in light of more recent data and feedback from stakeholders [see Washington Highlights, Sept. 3].
CMS is not proposing to reconsider the 0.2 percent reduction in the FY 2014 IPPS/Long-Term Care Hospital (LTCH) Prospective Payments System (PPS) final rule due to incomplete analyses of FY 2014 and FY 2015 claims data. However, the agency is seeking comments on whether it should await completion of the analysis before the resolution of this issue.
In accordance with the court order, CMS outlines assumptions and methodologies used to justify the 0.2 percent payment cut and provides further explanation on how the original analysis was conducted, such as definition and selection criteria of long outpatient stays and data steps employed to remove anomalies.
CMS seeks comments on all aspects of the decision that resulted in a 0.2 percent payment reduction, including but not limited to the information, assumptions, and analyses supporting the adjustment. CMS also invites comments on whether its original assumptions are still justified in light of new claims data in 2014 and subsequent years.
Comments on the notice are due by Feb. 2, 2016.