Premier detailed summaries of proposed FY15 Medicare inpatient/LTCH, SNF and IRF rules Last Updated: July 29, 2014
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Premier is pleased to provide a detailed summary of the proposed rule for FY15 inpatient prospective payment system (PPS)/long-term care hospital PPS that was released on April 30. In addition, Premier has prepared detailed summaries of the proposed Medicare payment rules for skilled nursing facilities and inpatient rehabilitation facilities.

Inpatient/long-term care hospital PPS

The FY15 Medicare inpatient/long-term care hospital (LTCH) PPS proposed rule largely updates existing policies, including refinements to performance-based payment adjustment programs (readmissions, hospital-acquired conditions and value-based purchasing programs) and the Medicare disproportionate share hospital cuts. CMS estimates that hospitals would face an average payment decrease of 0.8% starting in October 1 as a result of statutory changes and other adjustments. These include, among other provisions, a market basket increase of 2.7% adjusted as follows:

  • 0.4% decrease due to productivity cut
  • 0.2% additional market basket cut
  • 0.8% reduction due to documentation and coding offset

CMS estimates Medicare payments to LTCHs in FY15 will increase by approximately 0.8%. This includes the proposed update of 2.1%, the “one-time” budget neutrality adjustment to standard federal rate of approximately -1.3% under the last year of a 3-year phase-in and projected decrease in estimated high cost outlier payments.

The proposed IPPS/LTCH PPS rule was published in the Federal Register on May 15 and comments are due to CMS by June 30, 2014.

Please note that we are delaying preparing an Excel file comparing the proposed inpatient PPS base DRG rates with current rates as we believe CMS made errors in calculating the proposed weights and will likely be making corrections. 

Skilled nursing facilities

Payments to skilled nursing facilities (SNFs) would increase by 2% (or $750 million) in FY15 under the SNF PPS and consolidated billing proposed rule. The proposal would make changes to the therapy assessment policy, as well as implement ACA requirements related to the use of civil monetary penalties imposed by CMS against SNFs. CMS also proposes revisions to the wage index based on the latest labor market delineations put forward by the Office of Management and Budget that identifies a provider’s urban or rural status to determine which set of rates would apply.

The SNF proposed rule was published in the Federal Register on May 6 and comments are due June 30, 2014.

Inpatient rehabilitation facilities

Inpatient rehabilitation facilities (IRFs) will see their payments increase in FY15 by 2.2% (or $160 million) under the IRF proposed rule. The rule revises and updates quality measures and reporting requirements under the IRF quality reporting program. CMS also includes proposals on collecting data on the type and frequency of therapy provided in IRFs; refining the list of impairment group codes that meet presumptive compliance criteria; and providing for a new item on the IRF patient assessment instrument.

The IRF proposal was published in the May 7 Federal Register and CMS will accept comments until June 30, 2014.