AHANewMazIcon
(Click to read AHA News newspaper stories)


AHA urges CMS to drop 'excessive' coding cuts from proposed inpatient payment rule

June 25, 2012


The AHA last week urged the Centers for Medicare & Medicaid Services (CMS) to drop plans to impose “excessive” documentation and coding offsets to hospital payments under Medicare’s proposed fiscal year (FY) 2013 inpatient prospective payment system (PPS) rule. The proposal would result in hospital Medicare cuts totaling nearly $3 billion in FY 2013, the AHA told the agency.

The association also urged CMS to change its policies on Medicare’s Hospital Readmissions Reduction Program and Sole Community Hospitals, among a number of other issues it raised in a 62-page comment letter.

Coding cuts.
In its June 19 comments on the proposed inpatient PPS rule, the AHA took aim at two sets of coding and document offsets that would cut hospital payments by a total of 2.7%, or $2.9 billion, for the fiscal year beginning Oct. 1.

The agency proposed a 1.9% payment cut to eliminate what it claims was the effect of improper FY 2008 and FY 2009 documentation and coding changes.

The agency maintains Medicare overpaid hospitals in those fiscal years, because there were not real changes in patient case mix. The coding cut would reduce payments by some $1.9 billion.

While CMS had signaled in previous inpatient PPS regulations that this coding and documentation adjustment was coming, the proposed FY 2013 rule, released April 24, also called for a new 0.8% cut to offset document and coding changes made in FY 2010.

That offset would cut payments by nearly $1 billion.

The AHA said it was “extremely troubled” by the newly proposed coding cut. As in previous comment letters on CMS’ inpatient PPS policy, the association took issue with how the agency analyzed documentation and coding changes since it replaced in FY 2008 the Diagnosis-Related Group (DRG) system with the more refined Medicare Severity DRG system, which better reflects the severity of a patient’s illness.

The AHA called it “highly inappropriate” for CMS to compare hospitals’ documentation and coding practices since implementation of MS-DRG to practices under the “obsolete” DRG system. And it pointed to its own analysis of Medicare inpatient claims to assert that “much of the change CMS cites is actually the continuation of historical increases in the case-mix index, rather than the effect of documentation and coding changes” that accompanied MS-DRG.

The association told the agency that the proposed cuts are “excessive in light of these historical trends” and should not take effect. If CMS does go forward with the cuts, it should acknowledge that its analysis overestimates coding and documentation changes – as the Medicare Payment Advisory Commission has observed – and scale back the size of its proposed payment reductions, the AHA said.

Readmissions. The AHA also expressed concern over the proposed rule’s readmissions policy. Under the 2010 “Patient Protection and Affordable Care Act’s” Hospital Readmissions Reduction Program, hospitals with higher- than-expected 30-day readmission rates will experience lower Medicare payments beginning in FY 2013. To measure readmission rates, the regulation would use three readmissions measures that are part of the Medicare pay-forreporting program and reported on Hospital Compare for acute myocardial infarction (heart attack), heart failure and pneumonia, with more conditions possibly added later. The health care overhaul law requires CMS to modify the measures to exclude planned readmissions, as well as readmissions that are unrelated to the first admission.

“CMS has not excluded all planned and unrelated readmissions from these measures, despite ongoing feedback from the AHA and others,” the AHA said. The association added that it “strongly disagrees with this decision and believes the agency has ignored Congress’ intent that the measures be modified to explicitly exclude these readmissions.” In addition, the AHA asked the agency to account for disparities in the readmission data by adjusting for patient characteristics that are beyond hospitals’ control, like, for example, when patients are enrolled in both Medicare and Medicaid as “dual eligibles.”

Sole Community Hospitals.

The AHA also urged CMS to scrap a proposal that could revoke a hospital’s classification as a Sole Community Hospital. These rural hospitals are the primary and often only source of inpatient services for a community and qualify for an enhanced Medicare reimbursement. Under the proposed rule, they would be required to notify their fiscal intermediary or Medicare contractor of “all factors and information” that may have led CMS to incorrectly classify them as Sole Community Hospitals. CMS could use that information to take away a hospital’s status as a Sole Community Hospital.

The AHA called the proposed policy “inappropriately punitive” and inconsistent with existing regulations. It said the agency seems to want a Sole Community Hospital to “continually monitor and verify whether CMS itself correctly interpreted its own regulations.”

For more on the AHA’s June 19 letter, go to “Advocacy Issues” at www.aha.org, and click on “Letters” under “Tools & Resources.”

By Dominic F. Perella