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NAUH Comments on Proposed FY 2015 Medicare Inpatient Regulation: Part 5 of 7

Every year, the Centers for Medicare & Medicare Services (CMS) publishes in the Federal Register a draft regulation describing how it proposes paying hospitals for the inpatient care they provide to their Medicare patients in the coming fiscal year.  The proposed inpatient prospective payment system regulation for FY 2015 was published on May 15, and as always, CMS invited interested parties to submit written comments.

The National Association of Urban Hospitals has always found CMS to be receptive and even responsive to its comments and therefore takes the opportunity to submit detailed comments and suggestions about the agency’s annual proposal.

NAUH is presenting excerpts from its comment letter to CMS.  The subjects and the dates they will be published are:

June 26 – The size of the Medicare DSH pool

June 27 – The manner in which CMS uses CBO estimates of changes in insurance status

June 30 – The methodology for distributing Medicare DSH funds

July 1 – The need for appropriate risk adjustment in the hospital readmissions reduction program

Today – a much-needed adjustment to the methodology employed by the hospital readmissions reduction program

July 3 – hospital inpatient rates

July 7 – short hospital stays (two-midnight rule)

NAUH’s complete comment letter to CMS can be found here, on the NAUH web site.

A Much-Needed Adjustment to the Methodology Employed by the Hospital Readmissions Reduction Program

NAUH objects to the practice of calculating a three-year average when scoring hospitals’ performance on avoidable Medicare readmissions.  Such an approach, we believe, fails to reward improvement and even continues to punish hospitals that have improved their performance.

law booksConsider, for example, the possibility that in the earliest year of any three-year period, a hospital performs poorly in attempting to prevent avoidable Medicare readmissions and is penalized the maximum amount, or close to the maximum amount, under the readmissions reduction program.  If this hospital takes its poor performance to heart and, stung by the financial penalties, implements new practices that lead to a significant improvement the following year, its poor performance the previous year is still held against it by the current scoring methodology and it may suffer financial penalties again even if it has raised its performance to an acceptable level.  Under the current program, one year of poor performance hurts a hospital for three years, not just for one.  This problem is further exacerbated by the lag in the data being used.  For FY 2015, for example, the applicable period is July 1, 2010 through June 30, 2013.  This means that three-quarters of the period represents readmissions from before this program was implemented.

NAUH believes this is wrong and urges CMS to stop using a three-year rolling score for grading hospitals and judge them only on their most recent performance.

* * *

Tomorrow – Hospital Inpatient Rates

NAUH’s complete comment letter to CMS can be found here, on the NAUH web site.

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