United States

CMS proposes FY 2014 Medicare IPPS update

An analysis and commentary on federal health care issues


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The Centers for Medicare and Medicaid Services (CMS) have released a proposed rule to update both the Hospital Inpatient Prospective Payment System (IPPS) and the Long Term Care Hospital (LTCH) Prospective Payment System for fiscal year 2014. The rule is 1,424 pages. While the rule is long and appears to become lengthier every year, the number of issues continues to grow, too, with many having significant financial consequences, such as readmissions and the hospital value-based purchasing program.

While CMS has projected an increase of only $27 million in overall IPPS payments, there are many proposed reductions, in addition to the multiyear productivity and Affordable Care Act requirements to consider. Reductions to readmissions, the hospital-based value purchasing system, one-day stays and the MS-DRG weights all need careful attention. There are also the documentation and coding reductions that will recoup $11 billion over four years. If sequestration is in effect next year, many hospitals could incur significant Medicare payment losses.


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