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Tag Archives: Rule

Is the 2-midnight rule going away and when will short-stay audits resume?

Is the 2-midnight rule going away and when will short-stay audits resume?

Learning objective

At the completion of this educational activity, the learner will be able to:

  • Identify updates to CMS’ 2-midnight rule and best practices for compliance.

 

Every couple months, it seems questions arise about the 2-midnight rule and there are rumors that it may be going away. Below are some questions with answers from our expert Ronald Hirsch, MD, FACP, CHCQM, vice president of the Regulations and Education Group at Accretive Health in Chicago, to clarify where things stand today with regard to the 2-midnight rule.

 

Q: I heard the 2-midnight rule is now gone based on changes to Medicare payment rates under the 2017 inpatient prospective payment system (IPPS) final rule. Is this true, and if not, what changed?

 

A: No, this is not the case. The 2-midnight rule is still alive and kicking. What the FY 2017 IPPS final rule did is finalize two adjustments in addition to updating the annual rate for inpatient hospital payments.

"First, CMS is finalizing the last year of recoupment adjustments required by the American Taxpayer Relief Act of 2012 (ATRA). Section 631 of ATRA requires CMS to recover $ 11 billion by FY 2017 to fully recoup documentation and coding overpayments related to the transition to the MS-DRGs that began in FY 2008," states the CMS Fact Sheet. "For FYs 2014, 2015, and 2016, CMS implemented a series of cumulative -0.8 percent adjustments. For FY 2017, CMS calculates that $ 5.05 billion of the $ 11 billion requirement remains to be addressed. Therefore, CMS is finalizing a -1.5 percent adjustment to complete the statutorily specified recoupment."

And the second part of the change, which seems to be causing the confusion, is CMS took action on a -0.2 percent adjustment it implemented in the FY 2014 IPPS final rule.

This adjustment was initially made to account for an estimated increase in Medicare spending due to the 2-midnight policy. "Specifically, in the FY 2014 IPPS final rule, CMS estimated that this policy would increase expenditures and accordingly made an adjustment of -0.2% to the payment rates," states the fact sheet.

While CMS thought this adjustment was reasonable at the time, a recent review led CMS to permanently remove this adjustment, "and its effects for FYs 2014, 2015, and 2016 by adjusting the 2017 payment rates. This will increase FY 2017 payments by approximately 0.8%," stated CMS.

Hirsch says this move is "purely about money." "They are leaving the 2-midnight rule itself completely intact," he says.

The bottom line: Pay attention to 2-midnight compliance and ensure your organization has good systems in place to support it.

 

Q: When are Beneficiary and Family Centered Care Quality Improvement Organizations (BFCC-QIO) short-stay reviews going to resume?

 

A: Back in May, CMS put a hold on short-stay inpatient audits related to the 2-midnight rule. That hold was lifted effective September 12, 2016, according to a FAQ published by CMS (http://ow.ly/DQxW304bCa6).

According to the FAQ, CMS decided to lift this temporary suspension for five reasons, which are as follows:

  1. BFCC-QIOs were successfully retrained on 2-midnight rule
  2. BFCC-QIOs finished a re-review of claims that were formally denied
  3. CMS "examined and validated the BFCC-QIOs peer review activities related to short-stay reviews"
  4. BFCC-QIOs reached out to providers on claims that were affected by the temporary suspension
  5. BFCC-QIOs started provider outreach and education on the 2-midnight rule

It appears that based on the five points, the temporary audit suspension accomplished its goal of helping BFCC-QIOs sort out the challenges they faced during the initial round of audits.

Prior to the suspension, hospitals complained about inconsistencies in the review process, which triggered the suspension. The BFCC-QIO audits began in October 2015, and hospitals reported a number of surprises including:

  • Auditors requested records as far back as May 2015 when many believed the audits would only look at records from 2015 forward
  • BFCC-QIOs missed deadlines, and provided audit results late
  • Failure by BFCC-QIOs to schedule timely education for providers

 

These problems made it difficult for hospitals to hit filing deadlines, and they were consequently reporting problems because they missed the window to appeal denied claims. Hospitals also didn’t have a chance to get education to understand what they were doing wrong to fix the problem.

There were also rumored problems related to benchmark admissions. Hospitals reported that BFCC-QIOs were routinely and in some cases inappropriately denying inpatient admissions when the patient spent one night as an outpatient in the emergency department or in observation services before he or she was admitted?even when the patient spent a second night in the hospital as an inpatient.

To prevent future problems, CMS said in its FAQ that it will continue to provide oversight for BFCC-QIO efforts by:

  • Reviewing a sample of completed claim reviews each month
  • Monitoring provider education calls
  • Responding to individual provider inquiries and concern. Providers may send questions to the CMS Open Door Forum Mailbox at ODF@cms.hhs.gov.

 

CMS also said that BFCC-QIOs will continue tofollow the guidance called, "Reviewing Short-Stay Hospital Claims for Patient Status." To see a copy ofthe guidance, go to www.cms.gov/research-statistics- data-and-systems/monitoring-programs/medicare-ffs- compliance-programs/medical-review/inpatienthospitalreviews.html.   

The BFCC-QIOs will also be charged with providing provider education going forward. "The BFCC-QIOs were directed to use comprehensive outreach and communication approaches (i.e., website, newsletter, one-on-one training, and town hall type events) to continue to educate providers on when payment under Medicare Part A is appropriate under the 2-midnight policy," states the FAQ. "BFCC-QIOs are required to educate providers using quality improvement core principles that facilitate continuous learning and promote greater provider understanding of the appropriate application of the 2-midnight policy in accordance with the revisions in the CY 2016 OPPS Final Rule (CMS-1633-FC): www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices-Items/CMS-1633-FC.html."

Now that audits have resumed, organizations should maintain a focus on 2-midnight compliance. Below are some tips Hirsch has recommended in the past, including:

  • Reviewing every short-stay admission?those between zero and one day?prior to billing.
  • Ensuring that every patient’s status is appropriate up front. Reviewing the chart of every patient that goes upstairs.
  • Using the physician advisor to check compliance on cases that are murky to ensure that they meet one of the exceptions under the 2-midnight rule. Changing cases that don’t meet an exception using condition code 44. If the problem isn’t discovered until after discharge, self-deny and rebill the claim.
  • Ensuring that the case managers and the physicians are up to date about any potential changes to the 2-midnight rule and how to comply.

 

HCPro.com – Case Management Monthly

Making a checklist to prepare for the OPPS final rule

Making a checklist to prepare for the OPPS final rule

Editor’s note: Jugna Shah, MPH, president and founder of Nimitt Consulting, writes a bimonthly column for Briefings on APCs, commenting on the latest policies and regulations and analyzing their impact on providers.

 

The 2017 OPPS final rule will not be out for a couple of weeks, but that doesn’t mean providers can’t be thinking about what their action plan will be once the rule is released.

With only 60 days between the final rule’s release and the January 1 implementation date, providers will be ahead of the curve by spending time now and thinking about the processes they may need to review, change, or implement based on what CMS finalizes and the sort of financial impact the final rule is likely to have.

While I don’t know with 100% certainty what CMS will finalize, revise, delay, or back away from, I offer providers this list of what they should look at immediately upon the rule’s release.

 

Section 603

With Congress mandating payment changes for all non-grandfathered (those not billing under OPPS prior to November 2, 2015) off-campus, provider-based departments (PBD) starting January 2017, it was no surprise that CMS discussed this issue in the proposed rule. But it was a huge surprise to read CMS’ proposals, which, if finalized, would greatly impact otherwise protected grandfathered locations under Congress’ Section 603.

For example, CMS proposed that if an off-campus PBD moves, changes ownership, or expands its services beyond what it was providing as of November 2, 2015, as defined by APC-based clinical families, then its grandfathered status would be impacted. While this may sound relatively simple, the payment and operational impact would be a nightmare.

There is another aspect of Section 603 and CMS’ proposal to use the Medicare Physician Fee ­Schedule (MPFS) as the "applicable payment system" for ­Medicare Part B services provided at non-grandfathered locations or deemed "non-excepted." Specifically, there are many services for which the MPFS has no facility component for the facility costs associated with performing the procedure because they are only provided in hospital outpatient departments or ambulatory surgery centers. For these services, the industry has to wonder what CMS was thinking, as the agency cannot possibly expect to pay nothing for services that would continue to be rendered in off-campus PBDs.

CMS’ unexpected and hastily configured proposals create such large operational and financial problems that the industry is hoping the agency will simply retreat and delays the implementation of Section 603, or at a minimum revert to paying grandfathered facilities under the OPPS for all of their services, regardless of clinical service expansion, site relocation, or ownership changes. There is precedent for CMS to postpone implementation beyond statutory deadlines. If there were ever a situation where delay is advised, this is one.

Hopefully, providers sent in a surfeit of comments regarding these and other issues and outstanding questions related to the agency’s Section 603 implementation proposals. I hope CMS will acknowledge its proposals have administrative, operational, and financial gaps that are so large, it will be impossible to move forward by January. But even if CMS does choose to put off its proposals until proper payment mechanisms are developed, Congress was clear in its language requiring changes by January 1, 2017, so something is likely going to have to occur.

CMS’ proposals, if finalized, would have drastic long-term implications for all providers, including those who believe that their grandfathered status would protect them; the sad reality is that under CMS’ proposals, there will be massive operational and financial impact, so this is the first topic in the final rule that everyone should review.

 

Packaging proposals

Providers have gotten used to CMS expanding packaging in each OPPS rule, as the agency calls packaging an essential part of a prospective payment system. With CMS’ expansion of lab packaging from date of service to claim level this year, we should not be surprised if the agency finalizes its proposal of expanding the conditional packaging logic of CPT codes assigned to status indicators Q1 and Q2 to the claim level.

Claim-level packaging of these types of ancillary services will have a huge financial impact on providers submitting multiday claims, such as those for chemotherapy and radiation therapy services, despite the fact that multiday claims for these types of services are not required.

Currently, status indicators Q1 and Q2 are packaged into other OPPS services when provided on the same date of service, even when submitted on a claim that spans more than one day. If CMS finalizes its proposal, providers that continue submitting multiday claims when monthly or series claims are not required should not be surprised when they find themselves no longer receiving separate payment for many services.

This is the time for providers to assess whether they submit multiday claims for any services beyond the required repetitive services listed in the Medicare Claims Processing Manual, Chapter 1, section 50.2.2. While it is true the manual states that is is an option to bill nonrepetitive services on multiday claims, it did not have financial implications. At least, until this year, with the claim-based packaging of labs and proposal for claim-based packaging of Q1 and Q2 services. Providers should determine why they are billing multiday claims and what it would take to change their billing processes. If they elect not to move away from multiday claims, then assessing the financial impact that will occur is an important exercise to go through prior to January 1.

The other packaging proposal providers should look for in the final rule involves the use of modifier -L1 for reporting unrelated laboratory tests when they occur on a claim with other OPPS services. CMS proposes to delete the modifier for CY 2017 as it believes that the vast majority of labs should be packaged regardless of whether they are unrelated to other OPPS payable services.

This would have a big impact on providers who provide reference laboratory or nonpatient services, which the agency requires to be reported on the same claim as other OPPS services performed on the same date. Today, the use of the -L1 modifier allows providers to identify these services as separate and unrelated to the other OPPS services so that payment is received from the Clinical Laboratory Fee Schedule.

If CMS finalizes its proposal to eliminate modifier -L1, we can hope the agency will also update its instructions for reporting reference laboratory services so they can be separately paid even when provided on the same date of service or claim as other OPPS services. If CMS does not make a change, then providers can again expect to see a large financial impact. Both of these packaging proposals should be looked at immediately in the final rule.

 

Device-intensive procedures

The final set of proposals providers will want to review relates to the changes proposed for device-intensive procedures. This is a place where we hope to see CMS finalizing changes as proposed.

For example, CMS proposes to use the implantable device cost-to-charge ratio (CCR) to calculate pass-through device payments for hospitals that file cost reports designating that cost center, as this is a more accurate CCR for determining separate pass-through payment. Currently, only about two-thirds of hospitals use the implantable device CCR, which means the remaining one-third need to examine their cost reporting process.

Providers should determine whether they are in the group that reports the implantable cost center; if a provider is not reporting, it should find out why and begin making changes. This will have an impact on facilities’ ability to generate much better pass-through payment going forward, when applicable. It will also ensure future payment rates for device-intensive procedures reflect more accurate payment of the device.

Finally, it will be interesting to see whether CMS finalizes the addition of another 25 comprehensive APCs (C-APC) encompassing 1,844 additional status indicator T services; if it does, a financial impact analysis of these services will also be important, as this will be a large increase in C-APCs for a one-year span.

I plan to discuss these and other final rule changes in my next column, as well as in HCPro’s annual OPPS final rule webcast December 1 (see www.hcmarketplace.com for details), but in the meantime I hope the above checklist will be useful to providers now and in the first weeks of the rule’s release.

HCPro.com – Briefings on APCs

New Proposed Rule to Reduce EHR Data Reporting

A new CMS proposed rule contains two provisions intended to reduce hospital eCQM reporting requirements in response to feedback calling for less aggressive EHR data reporting policies.

A couple provisions in a new Hospital Inpatient Quality Reporting (IQR) Program rule proposal outline modifications to electronic clinical quality measure (eCQM) reporting requirements and validation processes.

In a public document in the Federal Register, CMS proposed reductions to hospital eCQM reporting policies. In the 2017 calendar year reporting period (and 2019 fiscal year payment determination), hospitals would be required to choose six available eCQMs listed in the Hospital IQR Program measure set and offer two chosen calendar year quarters of data…

 

Continue reading this article

 

The post New Proposed Rule to Reduce EHR Data Reporting appeared first on Outsource Management Group, LLC..

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MOON requirement delayed in IPPS final rule: What next?

MOON requirement delayed in IPPS final rule: What next?

Hospitals got a last-minute reprieve from the Medicare Outpatient Observation Notice (MOON) notification requirement, which was set to go into effect August 6. Citing the need for additional time to revise the standardized notification form that hospitals will need to use to notify patients about the financial implications of being assigned to observation services, CMS moved back the start date for the requirement in the 2017 IPPS final rule to ‘no later than 90 days,’ after the final version of the form is approved (www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2017-IPPS-Final-Rule-Home-Page.html).

CMS released the new draft of the form (www.cms.gov/Regulations-and-Guidance/Legislation/PaperworkReductionActof1995/PRA-Listing-Items/CMS-10611.html?DLPage=1&DLEntries=10&DLFilter=10611&DLSort=1&DLSortDir=descending) August 1 and accepted public comments for 30 days. The MOON notification form is intended to be used to help hospitals comply with the Notice of Observation Treatment and Implication for Care Eligibility (NOTICE) Act. The Act requires hospitals to provide a verbal and written notice of outpatient status to any patient in observation who has been in the hospital for more than 24 hours, stipulating that hospitals must inform patients within 36 hours from the start of the service about their status. However, without a final version of the form ready for use, it would appear that hospitals cannot comply with the NOTICE Act at this time.

‘Hospitals should review the IPPS final rule that contains significant clarification on things like when and how the notice is delivered and finalize their own policies for delivering the notice pending the final version of the MOON being available,’ says Kimberly Anderwood Hoy Baker, JD, CPC, director of Medicare and compliance for HCPro in Middleton, Massachusetts.

CMS stated in the 2017 IPPS final rule:

We expect the final [Paperwork Reduction Act] PRA approval of the MOON around the time the implementing regulations are effective. Therefore, the implementation period for hospitals and CAHs will begin sometime after the effective date of this final rule and will be announced on the CMS Beneficiary Notices Initiative Website at: www.cms.gov/Medicare/Medicare-General-information/Bni/index.html and in an HPMS memorandum to MA plans. During this implementation period, hospitals and CAHs will have time to prepare for implementation, consistent with past implementation practices for beneficiary notices. Hospitals and CAHs will be required to deliver the MOON to applicable patients who begin receiving observation services as outpatients on or after the notice implementation date.

 

‘Hospitals should watch the Beneficiary Notice Initiative page, where CMS said they would announce implementation information, for more information on the finalization of the MOON and implementation time frames,’ says Baker.

Hospitals will likely not be required to provide the MOON notification form to patients until 90 days after PRA approval, which could mean compliance with the MOON and NOTICE Act is at least 120 days out from the final rule release date given that there is also a 30-day comment period on the revised form, according to Baker.

‘When the final version of the notice form is ready for use, hospitals should use the 90-day implementation period to develop a mechanism for the form to be in their EHR with a trigger to print the notice when the patient is registered as or has a status change to observation. This will allow for the form to be delivered by the designated individual to the patient immediately rather than attempting to do it at discharge,’ says Rose T. Dunn, MBA, RHIA, CPA, FACHE, chief operating officer for First Class Solutions, Inc.

The message should be delivered by hospital staff who are well versed in the purpose of the notice and how patient status may financially impact the patient. Dunn recommends that hospitals choose patient access staff, financial counselors, or utilization review/case management staff to deliver the MOON rather than patient care staff.

The role of HIM in MOON compliance

While many facilities plan to task departments outside of HIM with delivering the verbal and written notice to observation patients, that does not mean there isn’t a seat at the table for HIM when it comes to operationalizing this regulation.

At Via Christi Health in Wichita, Kansas, Sam Antonios, MD, FACP, FHM, CCDS, medical director of medical information and ICD-10 physician advisor, and his colleagues are working to ensure they understand the nuances of the MOON.

Antonios’ facility is currently building a daily report to help track patients who have been in observation 24 hours.

The report will help the facility ensure compliance with the NOTICE Act and MOON, but this may be a challenge for facilities that do not have the capability to create such a document in their electronic systems. But even with the right systems and alerts in place, relying on just one report may present challenges. ‘For example, you may have patients who don’t have the right trigger from the initiation of observation services,’ Antonios says. Remember, the MOON must be delivered 24?36 hours after the initiation of observation services, which is not always the time when the patient entered the hospital, especially for those in the emergency department, he says.

In general, HIM should aid in the creation of reports listing any admission for Medicare beneficiaries in observation. Records for patients who have been in observation for more than 24 hours should be flagged when the report is run, which should ideally be done twice daily and be sent to the team tasked with delivering the MOON, Antonios says.

HIM must play a role in deciding what to do with the MOON when it is completed and how to track verbal notification of observation status, Antonios says. Should HIM scan the MOON forms immediately for inclusion in the patient’s medical record, or should scanning be completed at the end of the patient’s hospital stay? Deciding which option is best may depend on the needs of your facility and staffing patterns.

‘HIM professionals should ensure that the form is properly signed and scanned into the appropriate section of the medical record where it can be consistently found during an audit,’ says Edward Hu, MD, CHCQM-PHYADV, system executive director of physician advisor services at UNC Health Care system in Chapel Hill, North Carolina, and president of the American College of Physician Advisors. In addition, HIM will also play a role in ensuring the CMS-approved MOON is given to observation patients, Hu says.

In an era when hospitals are increasingly using electronic methods of documentation and communication, it may be tempting to create an electronic version of the MOON for patients to read and sign. However, Hu notes that if this practice is implemented the patient must still receive a paper copy of the form. ‘Hospitals must provide a signed paper copy of the MOON to the beneficiary, even if he or she reviews and signs on an electronic pad,’ he says. ‘The hospital must provide the MOON on paper for the beneficiary’s review if the beneficiary asks to review a paper version.’

Tracking and delivering the MOON is one hurdle to overcome, but so too is ensuring that patients understand the information presented to them. Language barriers can present a challenge when delivering the MOON. While it may be relatively easy to obtain a copy of the notice for patients who speak more common languages like Spanish, it is a bit more difficult at Antonios’ facility where patients speak a variety of languages that the form is not available in. In turn, staff may have a difficult time verbally notifying patients of observation status during off hours when a translator is unavailable, he says.

Hu notes that HIM can play a role in ensuring the Spanish-language version of the MOON is made available to patients and staff when it is approved by CMS. ‘Hospitals also have an obligation to provide the information on the MOON in a language and manner that the patient understands. Although this does not mean the MOON must be translated into every language, it does mean that the hospital has an obligation to ensure understanding by beneficiaries with limited English proficiency,’ he says.

 

The ups and downs of MOON

Complying with the NOTICE Act and operationalizing MOON has presented a significant challenge for healthcare organizations. Some are unsure of how to deliver the form and little is known about the impact it will have on patient relations and hospital staffing.

The verbal and written notice to observation patients should be given between 24 and 36 hours of the patient being placed in this status, which has many wondering whether they should actually wait 24 hours to deliver the notice since it can be challenging to ensure the notice is given before the 36-hour mark, says Antonios. ‘It leaves you with an open window of only 12 hours of actually being able to deliver before missing the deadline,’ Antonios says. Failure to deliver the notice within the given time frame can result in noncompliance.

While Antonios points out that CMS stated in the 2017 IPPS final rule that facilities can deliver the MOON prior to 24 hours of observation care, this may not always be the best option?especially since CMS noted that it discourages this practice. Delivering it before the 24-hour ma=rk as a proactive measure to ensure observation patients in need of the notice are not overlooked?or even delivering it on time?can present challenges since an observation stay can often become an inpatient stay based on a physician’s finding during the early hours of patient care, Antonios says.

Whether you decide to wait 24 hours or deliver the MOON as soon as observation status is initiated, there will be pros and cons.

Not waiting for the 24-hour mark may mean the verbal and written notice were given but not needed and could result in patients who are confused about their status and the financial implications of it. ‘It’s so early in the process that you may have people switched to inpatient before 24 hours and then you would have wasted the little bit of energy and resources to do a task that you didn’t need to do, because if you switch someone before 24 hours you don’t have to give them anything,’ Antonios says.

Delivering the MOON to all patients when they are first assigned to observation makes it easier to capture these Medicare beneficiaries before the 24?36-hour window passes, he says. It lends a fair amount of standardization and automation to the process of complying with the NOTICE Act and MOON, Antonios says.

However, ensuring that staff who are educated on completing the written notice and verbally explaining observation to patients are available at all times is not an easy task. While emergency departments (ED) are often well staffed during nights and weekends, other areas of hospitals may not have the same coverage, which could result in noncompliance if the MOON delivery window is missed. The ED?be it registration or other staff?may be the ideal setting for delivering the MOON if it is done routinely prior to the 24-hour mark. ‘Staffing on the floor goes down significantly after hours. It goes down significantly during the weekend, but the ED typically still has staff,’ Antonios says. ‘People receive paperwork in the ED anyway. It’s part of the process.’

HCPro.com – HIM Briefings

Pay-per-view: CMS shifts 2-midnight rule responsibility to QIOs, finalizes packaging expansion

CMS finalized its proposals regarding the 2-midnight rule, including moving responsibility for rule enforcement and education from Recovery Auditors to Quality Improvement Organizations (QIO). This latter change occurred October 1, 2015.

For stays in which the physician expects the patient will need less than two midnights of hospital care, inpatient admission may be allowed on a case-by-case basis determined by the judgment of the admitting physician. The documentation must support the admission and will be subject to review by a QIO. CMS expects inpatient admission for minor surgical procedures to be unlikely and will prioritize those cases for medical review. For hospital stays expected to last two midnights or longer, CMS policy remains unchanged.
 
Continue reading "CMS shifts 2-midnight rule responsibility to QIOs, finalizes packaging expansion" on HCPro’s website. Subscribers to Briefings on APCs have free access to this article in the January issue. 

HCPro.com – APCs Insider

CMS Issues Its Proposed 2017 Medicare Physician Fee Schedule Rule

The Centers for Medicare and Medicaid Services (CMS) has issued its proposed revisions to the Medicare Physician Fee Schedule (MPFS) for 2017, thus beginning the annual cycle of review, comment, planning and preparation that goes along with this release.  Missing from this year’s proposed rule are provisions related to the Medicare quality reporting programs (PQRS, VM, MU-EHR*) that have been a large part of the rule in recent years. 


Medical Billing and Coding Blog

[Announcement] Hospital IPPS and LTCH PPS Final Rule Policy and Payment Changes for FY 2017

Hospital Discharges

Originally Published in MLN Connects

On August 2, CMS issued a final rule to update FY 2017 Medicare payment policies and rates under the Inpatient Prospective Payment System (IPPS) and the Long-Term Care Hospital (LTCH) Prospective Payment System (PPS). The final rule, which would apply to approximately 3,330 acute care hospitals and approximately 430 LTCHs, would affect discharges occurring on or after October 1, 2016.

The final increase in operating payment rates for general acute care hospitals paid under the IPPS that successfully participate in the Hospital Inpatient Quality Reporting (IQR) Program and are meaningful Electronic Health Record (EHR) users is approximately 0.95 percent. This reflects the projected hospital market basket update of 2.7 percent adjusted by -0.3 percentage point for multi-factor productivity and an additional adjustment of -0.75 percentage point in accordance with the Affordable Care Act. This also reflects a 1.5 percentage point reduction for documentation and coding required by the American Taxpayer Relief Act of 2012 and an increase of approximately 0.8 percentage points to remove the adjustment to offset the estimated costs of the Two Midnight policy and address its effects in FYs 2014, 2015, and 2016.

• In sum, CMS projects that total Medicare spending on inpatient hospital services, including capital, will increase by about $ 746 million in FY 2017
• This projected increase in spending includes an estimated $ 350,000 increase in FY 2017 payments to hospitals located in Puerto Rico under the final policy to make IPPS payments for capital-related costs based solely on the national capital Federal rate

The final rule also includes:

• IPPS rate adjustments for documentation and coding and Two-Midnight Policy Medicare uncompensated care payments
• CMS-1632-F & IFC: Finalization of the extension of the Medicare-Dependent Hospital Program and low-volume hospital adjustment provided by MACRA
• Notification procedures for outpatients receiving observation services
• Hospital-Acquired Condition Reduction Program
• Hospital Readmissions Reduction Program
• Medicare and Medicaid EHR Incentive Programs 
• Hospital IQR Program
• Hospital Value-Based Purchasing Program
• PPS-Exempt Cancer Hospital Quality Reporting Program
• Inpatient Psychiatric Facility Quality Reporting Quality Reporting Program
• LTCH PPS changes
• LTCH Quality Reporting Program


See the full text of this excerpted CMS fact sheet (issued August 2).

The Medical Management Institute – MMI – Medical Coding News & MMI Updates