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CMS Releases FY 2014 IPPS Proposed Rule



This week in Washington—CMS releases the FY 2014 IPPS proposed rule. You are tuning in to the National Association of Public Hospitals and Health Systems health policy update for the week of April 29, 2013.

On April 26, the federal Centers for Medicare & Medicaid Services (CMS) issued the inpatient prospective payment system (IPPS) proposed rule for fiscal year (FY) 2014. In the proposal, CMS implements the Affordable Care Act’s (ACA’s) Medicare disproportionate share hospital (DSH) cuts, the hospital-acquired conditions reduction program, and documentation and coding cuts. The rule also contains updates to the readmissions reduction, hospital value-based purchasing, inpatient quality reporting, and other programs.

Beginning in FY 2014, provisions in the ACA change how the Medicare DSH payments are allocated. Hospitals would continue to receive 25 percent of their Medicare DSH allotments based on current methodology. However, the remaining 75 percent will become a separate DSH payment tied to a hospital’s uncompensated care costs. To implement the change, CMS proposes to use Medicaid and low-income Medicare inpatient days as a proxy for hospital uncompensated care. The total of Medicaid and low-income Medicare inpatient days would then be used to determine the portion of Medicare DSH payments that is linked to uncompensated care. In the coming days, NAPH will release additional analyses on this proposed rule.

The IPPS proposed rule will be published on the federal register on May 10 and comments are due by June 25.

In other DSH news, the proposed rule for the implementation of the ACA’s Medicaid DSH cuts has been under review by the federal Office of Management and Budget since April 23. The rule is expected to be published shortly. Once released, look to NAPH for analysis of the provisions in that proposed rule.

If you subscribe to this podcast via iTunes or an RSS feed, please take special note: we have moved the location of this podcast online effective April 30, and you may need to resubscribe. If you experience an interruption in your automatic updates next week, please visit for new subscription links.

Thanks for listening to another edition of This Week in Washington. I’m Zina Gontscharow; join us next week for another update.



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