The Centers for Medicare and Medicaid Services (CMS) announced a 1.4
percent rate update for 3,400 acute care hospitals and a 1.1 percent
rate update for 435 long-term care hospitals for fiscal year 2015.
Under a final rule released on Monday, CMS also said it would
distribute $7.65 billion in payments to hospitals for uncompensated
care, a decrease from the $8.56 billion it initially proposed.
The American Hospital Association said it was disappointed in the
higher-than-expected payment cuts.
"Today’s rule will make it more difficult for hospitals to maintain
their commitment to their communities," Linda Fishman, AHA senior
vice president, said in a statement. "These payments provide vital
support to hospitals that serve the most vulnerable patients."
CMS said the decrease in uncompensated care payments for Medicare
Disproportionate Share Hospitals, or DSH, was due to lower projected
hospital inpatient spending and revised estimates for the percentage
of individuals who are uninsured.
CMS also announced a market basket update of 2.9 percent but said
the rate could vary depending on whether a hospital participates in
government efforts to address quality care issues and automates its
information systems to accommodate electronic health records. The
market basket, a fixed index of goods and services, reflects the
influence of inflation and is used to update payments and cost
limits within Medicare.
CMS said the market basket update would decrease by one-quarter
among hospitals that do not successfully participate in its quality
reporting program or use electronic health records in a meaningful
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AHA said some hospitals would continue to be penalized regardless of
their improvement in quality. "The program negatively affects those
hospitals caring for older, sicker patients," Fishman said.
CMS in April had proposed a 1.3 percent rate increase for acute care
hospitals and projected a market basket update of 2.7 percent.
Overall, CMS projected that payments to acute-care hospitals would
decrease by $756 million, while payments to long-term hospitals
would rise by $62 million.
(Reporting by David Morgan in Washington; Additional reporting by
Susan Kelly in Chicago; Editing by Lisa Shumaker)
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