Health Information Management

Associate Director's Note: IPPS final rule's focus on quality continues

CDI Strategies, August 6, 2015

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CMS updates the inpatient prospective payment system (IPPS) annually.

In simplest terms, this document dictates how the government pays for hospital inpatient stays for its Medicare beneficiaries. Created in 1983, the IPPS changed the way the government paid for services to one based on fixed rates and implemented the DRG system. In 2007, it further stratified that system to what we now know as MS-DRGs complete with CCs/MCCs. With it, the government anticipated facilities would begin implementing CDI programs (which they did) and so, in the 2008 IPPS Final Rule, consequently incorporated a documentation and coding adjustment (DCA) which reduced hospital reimbursement.

Why the history lesson? This brief review essentially outlines one of the principal reasons CDI programs began to pop into existence—like sunflowers in an August garden—roughly eight years ago. Additional specificity in the medical record could make a difference in vital Medicare reimbursement for hospitals.

But it’s not just history, not just knowing where you come from. It’s also about knowing where you’re headed.

The IPPS is updated every year and every year CMS adds new payment initiatives. If you’re not following these important updates you—and your program—could be missing out on vital CDI opportunities.

In the past few iterations (while coding and MS-DRG changes were essentially shelved during the shifting ICD-10-CM/PCS transition) CMS focused increased on quality measures. This year’s IPPS Final Rule (released Friday, July 31) builds on programs such as Readmissions Reduction, Value-Based Purchasing, and Hospital-Acquired Conditions Reduction, among other efforts.

All these areas represent opportunities for CDI professionals to become informed, reach out to quality, coding, and case management departments to determine where documentation improvement might mean an overall improvement in facility outcomes.

“The final rule includes policies that advance the vision and commitment to increasingly shift Medicare payments from volume to value,” says Shannon Newell, RHIA, CCS, director of CDI Quality Initiative for Huff DRG Review in Eads, Tennessee.

Looks like its time CDI programs shift toward quality too.

Editor’s Note: For additional information regarding the relevant IPPS changes read “CMS continues shift to value over volume in 2016 IPPS final rule,” by Michelle Leppert, CPC. 



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