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The Centers for Medicare & Medicaid Services (CMS) released the Inpatient Prospective Payment System (IPPS) and the Long-Term Care Hospital Prospective Payment System (LTCH PPS) final rule.  The final rule updates fiscal year (FY) 2015 Medicare payment policies and rates, and quality related provisions.  The rule will generally be effective for discharges occurring on or after October 1, 2014. 

Key highlights of the final rule include:

  • Finalize a scoring methodology to calculate a total hospital-acquired conditions score for each hospital;
  • Increase the maximum reduction under the Hospital Readmission Reduction program to three percent of payment amounts;
  • Assess hospitals’ readmission penalties using five readmission measures (heart attack, heart failure, pneumonia, chronic obstructive pulmonary disease, and hip/knee arthroplasty);
  • Implement changes in payment reduction to hospitals that do not successfully participate in the Hospital IQR Program;
  • Add measures for the Hospital IQR Program;
  • Apply caps on the number of residents a hospital may count for Medicare graduate medical education payment; and
  • Change requirements for physician certification for critical access hospitals.

The final rule is available at:

The CMS fact sheet related to payment changes is available at:

The CMS fact sheet related to quality changes is available at:

Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Fiscal Year 2015 Rates; Quality Reporting Requirements for Specific Providers; Reasonable Compensation Equivalents for Physician Services in Excluded Hospitals and Certain Teaching Hospitals; Provider Administrative Appeals and Judicial Review; Enforcement Provisions for Organ Transplant Centers; and Electronic Health Record (EHR) Incentive Program; Final Rule, 79 Fed. Reg. 163 49854 (Aug. 22, 2014).

Centers for Medicare & Medicaid Services.  “Fiscal Year 2015 Policy and Payment Changes for Inpatient Stays in Acute-Care Hospitals for Long-Term Care Hospitals.”  Fact Sheet.  04 Aug. 2014.  

Centers for Medicare & Medicaid Services.  “CMS to Improve Quality of Care During Hospital Inpatient Stays.”  Fact Sheet.  04 Aug. 2014. 

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