On August 2, the Centers for Medicare and Medicaid Services (CMS) issued a FY 2014 final rule.
Highlights include:
• Clarified that critical access hospitals (CAHs) must be able to provide inpatient care on-site
• Establishes a "two midnights" policy regarding inpatient admissions
• Hospitals may no longer claim full-time equivalent (FTE) residents training at a CAH for graduate medical education (GME) purposes. CAHs training residents may receive payment based on 101% of Medicare share of reasonable costs
• Implements Affordable Care Act (ACA) Medicare disproportionate share hospital (DSH) payment adjustment. DSH hospitals will receive 25% of their current payments, with the remaining 75% adjusted for decreases in uninsured rate
• Expiration of the Medicare-Dependent Hospital Program
• A 2% payment reduction for hospitals with excess readmissions. Adds conditions subject to the payment reduction
• Finalizes the Hospital-Acquired Condition Reduction program framework for implementation in FY 2015, including a 1% payment reduction for the lowest-performing hospitals
• Mandated payment adjustment to recoup prior years' documentation and coding overpayments
Outpatient Prospective Payment System/ASC
CMS issued a CY 2014 proposed rule. CMS proposes to:
• Enforce direct supervision requirement for hospital outpatient therapy services at CAHs and other small rural hospitals
• Amend conditions of participation (CoPs) for hospital and CAH "incident to" therapeutic outpatient services and supplies to require that individuals furnishing them do so in compliance with applicable state law
• Implement Medicare Electronic Health Record (EHR) Incentive Program changes to allow participation by eligible professionals at Method II CAHs
• Package seven new categories of supporting items and services with primary services
• Replace five levels of outpatient visit codes with a single healthcare common procedure coding system (HCPCS) code for each type of outpatient hospital visit, one for clinic, and one for each type of emergency department visit (24 hour and non-24 hour)
• Add five new measures for the Outpatient Quality Reporting (OQR) program, affecting CY 2016 payment with data collection beginning in CY 2014
• Set performance (2014) and baseline (2012) periods for the CY 2016 value-based purchasing
• Change the contracting process and regulations governing eligibility for quality improvement organizations (QIOs)
Physician Fee Schedule
CMS issued a CY 2014 proposed rule. CMS proposes to:
• Apply the outpatient therapy cap on CAHs (using physician fee schedule payment rates to calculate)
• Redefine a rural health professional shortage area (HPSA) for purposes of telehealth originating site eligibility by using the ORHP rural definition
• Require compliance with state law as a CoP for "incident to" services
• Implement a process to change clinical laboratory fee schedule payment amounts based on changes in technology
• Continue implementation of the physician value modifier
o Applicable to physicians in groups of 10 or more eligible professionals
o Increase payment risk from 1% to 2%
o Align quality measures and reporting mechanisms with PQRS
o Update Physician Quality Reporting System, electronic prescribing, Medicare Shared Savings Program/accountable care organization, and Physician Compare
• Update the Ambulance Fee Schedule
o Rural ground ambulance payment increases 3%
o Non-emergency end stage renal disease patient transport payment reduced 10%
