CMS Scales Back on Payment Cuts

Andrea Kraynak, for HealthLeaders Media , August 3, 2011

“I’m grateful that they chose not to use acute renal failure as an HAC. The ICD-9 and ICD-10 coding systems aren’t robust enough to track contrast-induced nephropathy,” Kennedy says. “While the logic for using contrast induced renal failure is sound, the ICD-9-CM Coordination and Maintenance Committee will have to create codes to implement this policy.”

If that happens, CMS might choose to add this as an HAC in the future, he says, as CMS has stated it is an area of interest and it believes there is room for quality improvement in this area.

According to the final rule, CMS did adopt five new ICD-9-CM codes to be added to their respective HAC categories:

  • Procedure codes 808.44 and 808.54 for multiple pelvic fractures are added to the falls and trauma category
  • Procedure codes 539.01 and 539.81 for infections related to gastric procedures are added to the surgical site infection following certain bariatric procedures category
  •  Procedure code 415.13 describing a type of pulmonary embolus is added to the deep vein thrombosis and pulmonary embolism following certain orthopedic procedures category.
Three-day payment window changes

CMS continued to address comments about the three-day payment window in the final rule.

Specifically, commenters were looking for information on billing in relation to the three-day rule for free-standing physician offices, according to Kimberly Anderwood Hoy, JD, CPC, director of Medicare and compliance for HCPro. However, CMS basically indicated further information would be available in the upcoming Medicare Physician Fee Schedule that will be released this fall.

“People need to read very carefully the physician fee schedule final rule for further billing instructions on how to divide up the overhead piece vs. the professional piece,” Hoy says. “We know [the three-day rule] applies, but how? We were hoping for some sort of formula.”

Other commenters asked for clarification on what “clinically associated” really means, Hoy says, but CMS provided no clarification on that matter.

Hoy offers another interesting note: CMS indicated in the rule that providers shouldn’t assume that all services provided during a continuous stay are related.

“CMS seems to be saying that continuous stays are not necessarily related and could result in some bundling of unrelated services if you made that assumption,” Hoy says. “Though this could be a positive change in terms of reimbursement if you get payment for a few services that didn’t need to be bundled, it makes it all that much more confusing and operationally difficult to individually review all of the services.”

Value-based purchasing program

CMS has finalized the addition of the Medicare Spending per Beneficiary measure in 2014 to the Hospital Inpatient Value-Based Purchasing program required by the PPACA.

While the proposed rule indicated the measure would assess Medicare parts A and B spending from three days prior to an inpatient admission until 90 days after discharge, the finalized measure tracks spending from three days prior to admission until 30 days post-discharge.

“One new measure that’s outside what we’ve seen to date is the Medicare spending per beneficiary measure . . . CMS had originally proposed that it measure spending from three days pre-hospitalization through 90 days post-discharge, but as we requested, they shortened the time period to 30 days post-discharge,” Kim says. “It’s a new type of measure, a spending measure, which we haven’t seen before in the inpatient quality reporting program.”

LTCH PPS changes

In addition to hospitals paid under the IPPS, the rule also updates payment policies and rates for those under the long-term care hospital prospective payment system (LTCH PPS).

LTCHs finalizes an expected increase of $126 million (a net increase of 2.5%), due to a 1.8% rise in payment rates and other policies, compared to the proposed rule, which estimated a 1.9% increase.

A new pay-for-reporting program was also finalized in the rule for the following quality measures:

  • ·         Catheter-associated urinary tract infection
  • ·         Central line catheter-associated bloodstream infections
  • ·         New or worsening pressure ulcers

The first measure set for reporting will take effect in October 2012, with a 2% payment penalty for non-reporting beginning in October 2013.

Editor’s note: The final rule will appear in the August 18 issue of the Federal Register. Changes are effective October 1, 2012 unless otherwise specified. For additional information, including IPPS and LTCH PPS tables, visit the CMS website.

Andrea Kraynak, CPC, is senior managing editor of Medical Records Briefing and HIM Connection. She may be reached at

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