Health Information Management

News: IPPS final rule reverses reimbursement rate cut

CDI Strategies, August 6, 2009

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Concern regarding CMS’ 2010 Inpatient Prospective Payment System (IPPS) proposed rule dissipated somewhat last week when the agency decided to forgo a proposed negative documentation and coding adjustment (DCA) of 1.9%. Instead, hospitals can expect an overall increase in hospital payments by 2.1% to accommodate for inflation, according to the final rule released Friday, July 31.
The initial proposal represented historically low payments for hospitals and would have penalized facilities yet to implement clinical documentation improvement (CDI) programs, says DeAnne Bloomquist, RHIT, CCS, president and chief consultant for Mid-Continent Coding, Inc. in Overland Park, KS.  
Removing the 1.9% DCA reduction from the final rule gives facilities a bit more breathing room in terms of establishing documentation improvement programs. In the next year, hospitals with CDI programs should continue their initiatives, while those who have not implemented one yet should work toward that goal, says Gloryanne Bryant, RHIA, CCS, CCDS, regional managing HIM director at Kaiser Foundation Health Plan Inc. & Hospitals.
“Hospitals should be capturing all valid codeable conditions to represent the patient severity, acuity, and risk of mortality,” Bryant says. “We will need to stay tuned [to] the analysis that CMS will be doing on the data insofar as the possible impact and/or reduction for FY2011.”
CMS intended to reduce future payment rates “based on the observed increase in spending due to documentation and coding that occurred in fiscal 2008,” according to a CMS’ press release. However, because the agency does not have a full year of data to illustrate the range of documentation and coding effects in 2009, CMS decided not to implement the adjustment until it has a full year of data.
This does not mean hospitals won’t see an adjustment in the future, however. The press release also states, “Based on complete analysis of [FY] 2008 and [FY] 2009 data, CMS will consider phasing in future adjustments over an extended period beginning in fiscal 2011.”
“This is basically granting [hospitals] a reprieve,” Bloomquist says. “I think that means that hospitals can breathe a sigh of relief.”
Editor’s Note: Additional coverage of the IPPS final rule release is available online at The Revenue Cycle Institute.

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