AHA Criticizes CMS' Plan To Reduce Inpatient Medicare Reimbursements

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The American Hospital Association in a statement on Thursday said it will seek to have Congress block a rule announced by CMS that will reduce Medicare payments for inpatient hospital care, CQ HealthBeat reports (Reichard, CQ HealthBeat, 8/2).

Theinpatient hospital care rule in fiscal year 2008 will reduce Medicarereimbursements by 1.2%, rather than 2.4% as CMS previously hadproposed. The inpatient rehabilitation care rule will increase Medicarereimbursements for such treatment by an average of 3.2% in FY 2008.Under the rule, as of July 1, 2008, CMS no longer will consider"co-morbidities" in determinations of whether facilities qualify forMedicare reimbursements for inpatient rehabilitation care, a provisionopposed by AHA. The skilled nursing facility care rule will increaseMedicare reimbursements by 3.3% in FY 2008 (Kaiser Daily Health Policy Report, 8/2).

According to CQ HealthBeat,the proposed rule and the final rule both called for a 4.8% percentreduction in payments overall, although the final rule makes that cutover three years, instead of two. In the proposed rule, CMS would havecut payments by 2.4% in FY 2008 and in FY 2009, while the schedule inthe final rule makes cuts of 1.2% in FY 2008, 1.8% in FY 2009 and 1.8%in FY 2010. The reductions are being made to offset anticipated"upcoding" from hospitals once a new coding system is put into place, CQ HealthBeat reports.

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AHA Officials' Comments

AHA President Richard Umbdenstock in a statement said, "In its finalrule, CMS cut more than $20 billion in Medicare payments for hospitalinpatient services, further depleting scarce health care resources." Headded, "CMS struck an unnecessary and demoralizing blow againsthospitals' ability to care for patients across America." Umbdenstocksaid, "This misguided policy wrongly assumes major changes in howhospitals categorize patients for payment purposes, penalizinghospitals in advance based on a 'guess' by CMS."

AHA says thatpayment adjustments should be made only after any upcoding activitieshave been observed. Don May, AHA's vice president for policy, said thegroup would pursue legislation to block the coding adjustment but didnot specify by what legislative vehicle (CQ HealthBeat, 8/2).

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