CMS Issues Hospital Inpatient Payment Regulation

Medical MoneyIn August, CMS announced the final Inpatient Rule for FY 2015, indicating it will increase payments by 1.4% for inpatient procedures. Although any increase seems exciting, it is important to keep in mind that the projected hospital market basket increase for next year is 2.9%. Considering these two facts, CMS estimates that under this rule hospitals will see around $756 million less in 2015.

One big question I’ve been asked is how can a hospital counter this projected loss in revenue?

Like CMS, we believe hospitals should begin to see improved efficiencies through the meaningful use of electronic health records (EHR). EHR is a key technology for tracking the data points required for the financial incentives generated by hospital value-based purchasing (VBP) and readmissions reduction programs. A recent article in Becker’s Hospital Review outlined five ways EHR can be utilized to reduce readmissions.

In addition to utilizing EHR to take advantage of the bonus, or in some cases avoiding the penalties offered by these programs, providers should invest in technologies that address VBP objects like improved pain management and infection control. MD Buyline has already seen informed providers begin to focus their capital budgets on investments that address these initiatives.

Pain Management: We have seen a significant increase (around 20%) in requests, for pain control technology like syringe and pain management pumps. This is a clear indication that hospitals are addressing the reimbursement penalties associated with the Accountable Care Act.

Infection Control: We highlighted two technologies over five years ago (ultraviolet room disinfection, hand washing monitoring and drug-coated catheters), which are now considered mainstream and offer a significant impact on negative revenue. These two technologies and others methods for reducing hospital readmissions were highlighted in our July 2014 Issues That Matter- Hospital Readmissions: Technology Solutions.

Along with EHRs, pain management and infection control technologies can help counter the projected loss in revenue due to the new inpatient ruling. But providers must also continue to approach technology investments from a service line approach.

James Laskaris, EE, BME
James Laskaris, EE, BME, Clinical Analyst — Mr. James Laskaris is a senior emerging technology analyst at MD Buyline and has been with the company since 1994. With over 30 years of experience in the healthcare field, Mr. Laskaris is the primary analyst of high-end OR technology. He also covers issues related to the legislative and reimbursement effect on healthcare and authors a bimonthly “Issues that Matter” publication. Mr. Laskaris received his biomedical engineering degree from Southern Illinois University. His work has been published in hfm Magazine, Radiology Manager and Healthcare Purchasing News.