Weekend Update

Congress has adjourned until the week after Labor Day when it returns to address appropriations for the federal fiscal year that begins on October 1.  Before leaving DC, the Chairman and Ranking Member of the Senate Homeland Security and Governmental Affairs Committee, Sens. Tom Carper (D Del) and Tom Coburn (R Okla) introduced a postal reform bill .  Federal New Radio reports on highlights of the bill, which include changes that affect the FEHBP.

Reginfo.gov informs us that OPM submitted its 2014 Congressional coverage proposed rule (mentioned in Friday’s post) to OMB on Friday August 2.  OMB has at least 30 days to conduct its review but this puppy is on track to be issued this week as the White House was involved in developing the rule.

Also on Friday CMS released its final Medicare Part A inpatient prospective payment system (“IPPS”) rule for fiscal year 2014.  This massive rule making details the changes in the Medicare program’s payments to hospitals beginning October 1, 2013. “The final rule would increase IPPS operating rates by 0.7 percent after accounting for inflation and other adjustments required by the law.”  The rule also changes the readmission penalty program as follows:

In October 2012, Medicare began encouraging to hospitals with excess 30-day readmissions to lower 30-day readmission rates for heart attack, heart failure, and pneumonia patients by reducing a portion of the hospital’s payments by up to one percent, depending on their performance on key readmissions measures. As required by law, the FY 2014 IPPS rule increases the maximum reduction of payments to up to two percent.  It adds hip and knee surgery and chronic obstructive pulmonary disease to the list of conditions used to determine the reduction, effective in FY 2015.  CMS has increased the number and types of planned readmissions that no longer count against a hospital’s readmission rate.  

Kaiser Health News details the impact of the penalty program on hospitals. The total penalty is $227 million for the next federal fiscal year.  The penalty will be imposed on 2,225 hospitals, about the same number as last year.  The average penalty will drop nationally from .42% to .38%.  “Unlike other new programs created by the federal health law, the
readmissions program offers hospitals no rewards for improvements or the
opportunity to opt out.”  

The IPPS rule also implements a change in approach to coverage of hospital observation services. Those services generally are considered outpatient care covered by Medicare Part B. Under the new rule certain observation stays spanning two midnights will be considered an inpatient stay covered by Medicare Part A. BNA and Kaiser Health News report on an HHS Inspector General report on this practice issued last week.

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