Health Reform Implications for Institutional Providers

My last post covered CMS’ proposed rule affecting LTAcHs in fiscal year 2011 (October 1, 2010).  In this post I noted that CMS’ proposed rule included a disclaimer that  any impacts related to the PPACA (health reform) were not included and as a result, CMS would from time to time, release updates providing additional guidance.  Late yesterday, the government released additional technical guidance on the provisions contained in the PPACA that impact institutional providers, effective April 1, 2010.  Below is a summary of the information and respective implications.

Note: The following provisions are found in sections 3401 and 3137 of the Patient Protection and Affordable Care Act (PPACA).  CMS is at work to implement these provisions and the expectation is that payment modifications will occur in late April/early May.

• Inpatient Acute Care Hospitals: A .25% reduction in the PPS (inpatient) market basket for FY 2010 applied to discharges on or after April 1, 2010.  The reduction will affect PPS rates for discharges occurring between April 1 and up to September 30, 2010.
• Long Term Acute Hospitals: A .25% reduction to the hospital’s market basket for FY 2010 applied to discharges on or after April 1, 2010.  The reduction will affect LTAcH rates for discharges occurring between April 1 and up to September 30, 2010.
• Inpatient Rehab Facilities: A  .25% reduction to the Inpatient Rehab Facility market basket for FY 2010 applied to discharges on or after April 1,, 2010.  The reduction will also result in changes to the standard payment conversion factor, payment rates, and the outlier threshold amount.
• Extension of Section 508 Hospital Reclassifications:  Extends section 508 and special exception hospital reclassifications from October 1, 2009 to September 30, 2010.  Effective April 1, 2010 section 508 and individual special exception wage data is removed from the calculation of the reclassified wage index if doing so raises the reclassified wage index.  Any hospitals affected by this provision will be assigned an individual specific wage index effective April 1, 2010.  If the hospital’s section 508 or individual specific wage index for the period October 1, 2009 to September 30, 2010 is lower than for the period after April 1, 2010 through September 30, 2010, the hospital will receive  an additional amount to make up for the difference.  This provision applies for inpatient and outpatient payments.