Premier submits comments on FY15 inpatient prospective payment system proposed rule Last Updated: August 13, 2014
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Premier recently submitted comments on the FY15 inpatient prospective payment system (PPS) proposed rule, offering recommendations on various policies and payment adjustments proposed by the agency.

Highlights of Premier’s comments include:

Documentation and coding adjustment

Premier expressed support for CMS’ proposal to continue to phase in the documentation and coding adjustment by applying a -0.8%¬†recoupment adjustment to the standardized amount in FY15 as its second step to recouping the $11 billion required by law.

Medicare disproportionate share hospital (DSH) payment reductions

While generally supporting CMS’ methodology for the uncompensated care payment equation used to determine hospitals’ DSH payments, Premier urged CMS to improve the instructions to the cost report Worksheet S-10 so that it can move to this data source in the future.

Admission and medical review criteria

Premier expressed appreciation for CMS further engaging stakeholders through the proposed rule on what is commonly referred to as the “two-midnight” policy. Urging CMS to maintain the delay in enforcement until a new policy is finalized, Premier also called on CMS to remove the existing certification requirements and develop a short stay policy after careful analysis and with significant stakeholder input. Premier also told CMS that it should restore the more than $200 million it removed in FY14 associated with the two-midnight policy given that preliminary data shows a rise in observation cases and a drop in short-stay inpatient cases.

Readmissions penalty

Premier commented on proposed readmission measures and reiterated long-standing concerns with the Hospital Readmissions Reduction Program, urging CMS to:

  • Rectify the issue whereby the readmissions penalty can recoup more than four times the case cost of an excess readmission, which has become more urgent as the maximum penalty increased from 1 to 2%and now 3%.
  • Improve the measures before adding additional conditions to the program.
  • Adjust payment penalties for socioeconomic status, to avoid penalizing the very providers who are trying to eliminate disparities in healthcare.

Hospital-acquired condition penalty

Premier urged CMS to apply the HACs reduction to inpatient base payments and not to indirect medical education and DSH payments that are unrelated to the underlying quality policy the provision enforces. Premier also commented on the proposed scoring methodology, domain weights and a potential exemption process for hospitals located in areas that experience disasters or other extraordinary circumstances.

Value-based purchasing

Premier commented on the measures proposed for use in the Medicare Hospital Value-based Purchasing (VBP) Program for FY17 and future years, as well as the weights that CMS is proposing to assign to the measure domains. Premier urged CMS to remove the safety domain from VBP and consider the HAC Reduction Program as its Safety Domain, and then redistribute its weight to the other domains.

Quality measures

Premier provided a number of recommendations in its comments on quality measures for the Inpatient Quality Reporting (IQR) Program that CMS proposes to adopt, remove or suspend.