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

NAUH LogoThe 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

July 2 – a much-needed adjustment to the methodology employed by the hospital readmissions reduction program

July 3 – hospital inpatient rates

Today – short hospital stays (two-midnight rule)

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

Short Hospital Stays (Two-Midnight Rule)

NAUH appreciates CMS’s solicitation of provider views on short hospital stay payment policy.  We recognize that this has been a controversial area and also appreciate the agency’s willingness to audit hospitals’ performance and educate them while it works to develop a satisfactory policy for reimbursing hospitals for such care.

In NAUH’s view, a Medicare short stay begins with a physician’s initial diagnosis that a patient needs to be admitted to the hospital as an inpatient and is expected to remain at least two midnights or more.  Then, when the patient’s stay is ultimately shorter, NAUH believes that stay should be classified as a short stay for Medicare payment purposes.  A short stay should be reimbursed by Medicare based on Medicare transfer reimbursement policy – that is, for this day, Medicare should pay the hospital twice the per diem rate for the applicable DRG’s average length of stay.  This proposal is based on the generally accepted view that the greatest investment of resources for patient care occurs during the very beginning of a patient’s stay in the hospital and that even in a short stay, a hospital is expending comparable resources on patient care during that first day or two as it does when a patient stays longer.  This is the basis for current Medicare transfer payment policy and NAUH believes it should be the basis for Medicare short hospital stay payment policy as well.  Further, hospitals that serve large numbers of low-income patients and have medical education programs should not be put at a disadvantage when patients just have short stays, so NAUH further proposes that they receive Medicare DSH and medical education payments for these short stays as well.

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

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