CMS Releases FY 2009 Inpatient Hospital Payment Final Regulation

Today, the Centers for Medicare and Medicaid Services (CMS) released a final regulation addressing the following changes, among others: changes to the hospital inpatient prospective payment systems and FY 2009 rates, and changes in disclosure of physician ownership in hospitals and physician self-referral rules.

The final regulation includes the following:

· Hospital update of 3.6%;

· Hospital coding offset of -0.9 percent in 2009;

· Maintenance of the current methodology for payment weight calculations (no HSRV);

· Charge compression —Plans to implement long-term Medicare Cost Report changes for high cost devices beginning Spring 2009 and impacting payments in 2012;

· Approval of one new technology add-on payment application for FY 2009 (CardioWest™ Temporary Total Artificial Heart System);

· Addition of four hospital-acquired conditions for which Medicare will no longer reimburse beginning Oct. 1 – manifestations of poor glycemic control, surgical site infection following certain orthopedic procedures, surgical site infection following bariatric surgery for obesity, and deep vein thrombosis and pulmonary embolism following certain orthopedic procedures;

· Acceptance of 13 new quality measures and retirement of one measure, leading to a requirement to report on 42 measures for a full payment update in FY 2010, with the potential of adding 2 more measures in the final OPPS/ASC rule; and

· Final revisions to the physician self-referral regulations involving: “stand in the shoes” provisions, period of disallowance, alternative method for compliance with certain exceptions, percentage-based compensation formulae, unit-of-service (“per click”) payments in lease arrangements, service provided “under arrangements,” exception for obstetrical malpractice insurance subsidies, ownership or investment interest in retirement plans, and burden of proof.

The final rule may be accessed at: http://federalregister.gov/page2.aspx#spec_C

If you have any questions, please contact Mandy Wall who will direct you to the appropriate member of the Payment and Health Care Policy Department. She may be reached at AWall@AdvaMed.org or (202) 434-7246.