Some Hospitals Will See Increases in Medicare Payments in 2015

Hospitals that successfully participate in the Hospital Inpatient Quality Reporting (IQR) Program and are meaningful electronic health record (EHR) users will see an increase of 1.4 percent operating payment rates for inpatient stays in 2015, according to a final rule released last week by CMS.


However, overall payments under the Inpatient Prospective Payment System (IPPS) will decrease by more than $750 million (0.6 percent). CMS explained that the rate increase will be offset by reductions under the Hospital Readmissions Reduction program, changes to Medicare disproportionate share hospital payments, the expiration of some statutory provisions that gave special temporary increases in payments to hospitals, and other changes to IPPS policies.


Some of the specific quality-related changes noted in the final rule include:


  • Hospital Value-Based Purchasing Program: An increase in FY 2015 of the applicable percent reduction to 1.5 percent of base operating DRG payment amounts to participating hospitals


  • Hospital Readmissions Reduction Program: Increase in the maximum reduction in payments from 2 percent to 3 percent, as required by law


  • Hospital Acquired Condition Reduction Program: Reduction of inpatient payments of 1 percent by those hospitals with the poorest performance


  • Inpatient Quality Reporting: Finalization of 63 measures (47 required, 16 voluntary) set for the FY 2017 payment determination and subsequent years—11 measures were added and 19 were removed


“The rule’s changes to Medicare quality incentive programs will continue to encourage high quality care while decreasing the time and effort it takes for providers to report the information,” CMS said in the fact sheet. (“Fact sheets: CMS to Improve Quality of Care during Hospital Inpatient Stays,, August 4, 2014)


To read the CMS press release, click here.



To read the CMS fact sheet on quality, click here.




To read the CMS fact sheet on policy and payment changes, click here.



(Additional source: “Medicare Inpatient Hospital Payment to Decline Under CMS Final Rule,” Health Lawyers Weekly, August 8, 2014)




iProtean subscribers, your next course, Physicians and the New Healthcare Business Model, will be published at the end of August. A course about physicians by physicians—Todd Sagin, M.D., J.D. and Larry McEvoy, M.D.—it examines how physicians are making the changes necessary for the new business model, and offers unorthodox suggestions to boards and executives about how to work with physicians as the entire organization goes through radical change.




For a complete list of iProtean courses, click here.


For more information about iProtean, click here.