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CMS Proposes New Rewards and Penalties for Hospitals

The Centers for Medicare and Medicaid Services (CMS) has proposed the Inpatient Prospective Payment System (IPPS) rule that would represent an increase in payments to hospitals of approximately $27 million in 2014.

Under IPPS, hospitals that take part in the Inpatient Quality Reporting Program will receive 0.8 percent in additional payments, while those not successfully participating would have payments reduced by 2 percent. The proposed rule would update fiscal year 2014 Medicare payment policies and rates for inpatient stays at general acute care and long-term care hospitals.

CMS also proposed two new readmission measures used to calculate readmission penalties for fiscal 2015 under its Hospital Readmissions Reduction program. In fiscal 2014, the maximum payment reduction penalty will increase from 1 percent to 2 percent.

The proposed rule will be published in the Federal Register on May 10. CMS will accept comments on the proposed rule until June 25, 2013, and will respond to comments in its final rule to be issued by August 1, 2013.

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