Inpatient Prospective Payment System

Hospital reimbursement: Outline the significant components that make up the CMS IPPS (inpatient prospective payment system).

The current paper examines the Disproportionate Share Hospital Payment Reduction CMS 2367F rule which was effective on November 18, 2013. The Disproportionate Share Hospital Payment Reduction CMS 2367F is Federal Legislation that was implemented due to the Affordable Care Act. The rule was initially proposed by the Centers for Medicare & Medicaid Services (CMS), HHS on May 13, 2013. The proposed rule was to implement the provision of the Affordable Care Act that reduces Medicaid Disproportionate Share Hospital (DSH) allotments.

The CMS reimbursement rules for never events cause serious revenue loss for the hospitals, hence a shift in the patient care delivery model in inpatient facilities is required. The goal of this rule is to motivate hospitals to accelerate improvement

APCs or "Ambulatory Payment Classifications" are the government's method of paying facilities for outpatient services for the Medicare program. A part of the Federal Balanced Budget Act of 1997 required HCFA (now CMS) to create a new Medicare "Outpatient Prospective Payment System" (OPPS) for hospital outpatient services -analogous to the Medicare prospective payment system for hospital inpatients known as "Diagnosis Related Groups" or DRGs. This OPPS was implemented on August 1, 2000. APCs are an outpatient prospective payment system applicable only to hospitals, and have no impact on physician payments under the Medicare Physician Fee Schedule.

The HAC Reduction program requires the Secretary of the Department of Health and Human Services to adjust payments to those hospitals that rank worse than others

The PPACA involves many legislative changes that will affect hospital reimbursement. The PPACA requires every citizen in the United States to get health insurance and those that are noncompliant will face tax penalties. The PPACA requires all states to establish an American Health Benefit Exchange by 2014 to assure that health insurance is affordable to individuals and companies with 100 or less employees. The PPACA establishes a pay for performance program, which is a value-based purchasing (VBP) program in which Medicare pays hospitals based on their performance as compared to how they meet quality measures. Beginning in 2013 using the VBP program, hospitals will be paid based on their performance on many quality measures for acute myocardial infarction, pneumonia, heart failure, surgeries and hospital associated infections.

In 2012, the ACA found an excessive amount of readmissions of patients that were hospitalized within 30 days for the same medical conditions. This factor viewed under the ACA as a quality issue and CMS implemented value-based incentive payments based on performance in a set of quality measures. The plan is to implement a pay for performance (P4P) in formulas used by Medicare to reimbursement providers. “The objective is to link reimbursement to quality and efficiency as an incentive to improve the quality of health care, as well as reduce system-wide costs” (Shi and Singh, 2015). In addition to the P4P, nonprofit hospitals also focus on continual improvement, data and cost containment throughout the organization (Adamopoulos,

I just want to share this information with you. When the F.A department complete the patient sliding fee scale documentation the patient needs to sign the contract where show on the form what type of scale the patient qualify and how much will be their copayment according to their scale levels. For example: The patient with the account 13010460 the scale level is scale F and was circle to the patient that he is responsible for the copayment of $80 dollars and for Dental $100 and for the rest of the charge fee amount .The patient was agree and sign the document. Please review the attach document. PMG can use that information to remid the patients that they was agree with the scale when the F.A department complete the process with

“The Tax Equity and Fiscal Responsibility Act (TEFRA), signed into law September 3, 1982, mandated the development of a prospective payment methodology for Medicare reimbursement to hospitals.” http://sunlightfoundation.com/blog/2009/09/08/slug/. It changed Medicare reimbursement from a fee for service to prospective payment system. Which is where there`s a reimbursement method where`s there an amount of payment determined in advance of services being performed. The rates are done annually. Reimbursements for inpatient care by a classification scheme called diagnosis-related groups. If the patient might have to stay longer in inpatient care more than average days, the hospital may lose money on that patient.

The Affordable Care Act was enacted to improve health care and to lower health care cost in America. The ACA developed different strategies to meet these goals called the “pay for performance” programs. These strategies are aimed at the different providers to improve quality care. The strategy that I selected is the “Hospital Readmissions Reduction Program” this program/strategy is also known as the HRRP and was begun in October of 2012. HRRP is aimed at hospitals and penalizes hospitals that have a high 30 day readmission rate. The penalties are assessed and based on a number of comparisons, those such as, performance, patient demographics, comorbidities and frailty.

HCAHPS survey is a patient satisfaction survey required by CMS (The Centers for Medicare and Medicaid Service for all hospitals in the United States. HCAHPS identified the attributes of affective support, health information, and quick response as the elements of nursing care in the interaction and relationship between patient and nurse that determine patient satisfaction. High score of these elements would increase the hospital competition.

The MPHFP enables certain rural hospitals to be licensed as Critical Access Hospitals (CAHs) that receive cost-based reimbursement from Medicare in return for limiting their services (Rural Assistance Center- CAH Frequently Asked Questions, 2012). Under costbased reimbursement, health care providers receive reimbursement based on actual costs incurred which is a more generous reimbursement method than allowed by the prospective payment system (Gapenski L, 2009). However, only those providers that fall under the following categories are eligible to become CAHs: currently participating Medicare hospitals; hospitals that ceased operation after November 29, 1989; or health clinics or centers (as defined by the State) that previously operated as a hospital before being downsized to a health clinic or center (Department of Health and Human Services, 2013). A Medicare participating hospital that wishes to convert to a CAH, has to meet certain criteria including (Department of Health and Human Services, 2013):        Be located in a state that has established a State rural health plan for the State Flex Program; Be located in a rural area or be treated as rural under a special provision that allows qualified hospital providers in urban areas to be treated as rural for purposes of

According to L. Horton, LTACHs are funded by commercial insurance, Medicare, and charity (personal communication, March 7, 2014). For claims reimbursed by Medicare, patient satisfaction survey’s or Hospital Consumer Assessment of Healthcare Providers and Systems/HCAHPS help determine the hospital’s reimbursement scores. Value Based Purchasing (VBP) was established by the Affordable Care Act, which implements a pay-for-performance approach to the Medicare payment system (“Linking Quality to Payment,” n.d.). This program can help hospitals evaluate the performance of the services they provide to the public. Part of the VBP plan includes a questionnaire to patients that determines 30% of the weight of the hospital’s reimbursement scores. There are eight measures included in the HCAPS: nursing communication, doctor communication, responsiveness of staff, pain management, communication of medications, discharge information, cleanliness and quietness of hospital environment, and overall rating (Grellner, 2012, p.57).

APC (Ambulatory Payment Classification) system is a government program. This is the program that is in charge of helping hospitals retain payments for outpatient services. This is one of the programs that helps medicare pay and maintain hospitals running. APC covers payments in different parts of the hospital. This applies to Outpatient Surgeries, Outpatient Clinic care, Emergency room services and lastly observational Services. APC payments might also cover any test an out patient needs. These can range from blood work to radiology.

Beginning next year, 2017, providers will begin to be scored by the new MIPS measurements and that score will directly impact 2019 reimbursements. And, as we mentioned, on top of being financially impacted by MIPS, providers are also looking at reputation ramifications of low MIPS scores, which will be made public online. The sooner practices can ensure their performance in Meaningful Use, PQRS, and the Value-Based Modifier, the better prepared they’ll be for 2019 MIPS implementation.