AHA Criticizes CMS’ Plan To Reduce Inpatient Medicare Reimbursements

August 8, 2007 – 2:29 am | posted in Medicare, Rehabilitation

The American Hospital Association in a statement on Thursday said it will seek to have Congress block a rule announced by CMS that will reduce Medicare payments for inpatient hospital care, CQ HealthBeat reports (Reichard, CQ HealthBeat, 8/2).

The inpatient hospital care rule in fiscal year 2008 will reduce Medicare reimbursements by 1.2%, rather than 2.4% as CMS previously had proposed. The inpatient rehabilitation care rule will increase Medicare reimbursements for such treatment by an average of 3.2% in FY 2008. Under the rule, as of July 1, 2008, CMS no longer will consider “co-morbidities” in determinations of whether facilities qualify for Medicare reimbursements for inpatient rehabilitation care, a provision opposed by AHA. The skilled nursing facility care rule will increase Medicare reimbursements by 3.3% in FY 2008 (Kaiser Daily Health Policy Report, 8/2).

According to CQ HealthBeat, the proposed rule and the final rule both called for a 4.8% percent reduction in payments overall, although the final rule makes that cut over three years, instead of two. In the proposed rule, CMS would have cut payments by 2.4% in FY 2008 and in FY 2009, while the schedule in the final rule makes cuts of 1.2% in FY 2008, 1.8% in FY 2009 and 1.8% in FY 2010. The reductions are being made to offset anticipated “upcoding” from hospitals once a new coding system is put into place, CQ HealthBeat reports.

AHA Officials’ Comments
AHA President Richard Umbdenstock in a statement said, “In its final rule, CMS cut more than $20 billion in Medicare payments for hospital inpatient services, further depleting scarce health care resources.” He added, “CMS struck an unnecessary and demoralizing blow against hospitals’ ability to care for patients across America.” Umbdenstock said, “This misguided policy wrongly assumes major changes in how hospitals categorize patients for payment purposes, penalizing hospitals in advance based on a ‘guess’ by CMS.”

AHA says that payment adjustments should be made only after any upcoding activities have been observed. Don May, AHA’s vice president for policy, said the group would pursue legislation to block the coding adjustment but did not specify by what legislative vehicle (CQ HealthBeat, 8/2).

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