On April 30, the Centers for Medicare & Medicaid Services (CMS) published a 1500-page draft regulation detailing how it proposed paying hospitals for the inpatient care they provide to their Medicare patients in FY 2016 and invited comment on its proposal from stakeholders and interested parties.
On June 12, the National Association of Urban Hospitals provided its written comments in a letter to CMS. This week NAUH presents those comments in this space:
- Monday: Medicare DSH
- Tuesday: Hospital inpatient rates
- Yesterday: the hospital readmissions reduction program
- Today: short hospital stays and outliers
Short Hospital Stays
NAUH appreciates the recent actions both CMS and Congress have taken to protect hospitals from punitive actions by Recovery Audit Contractors. We also appreciate that CMS’s actions were taken in part in response to the views providers submitted last year after CMS solicited comments and suggestions in the proposed FY 2015 inpatient prospective payment system regulation. We recognize that this has been a controversial area and appreciate the agency’s willingness to audit hospitals’ performance and educate them while it works to develop a satisfactory policy for reimbursing hospitals for such care.
A revised policy governing Medicare reimbursement for short hospital stays, the proposed FY 2016 suggests, will be included in the proposed FY 2016 hospital outpatient prospective payment system rule, to be published in draft form in the near future, and will presumably reflect the considerable input offered by providers, MedPAC, and others. For this reason, NAUH wishes to take this opportunity to reiterate our perspective on the basic concepts we believe a short hospital stay policy should embrace.

NAUH urges CMS to consider this perspective in developing its short stay policy. It also urges CMS to protect hospitals from arbitrary rulings by RAC auditors; to limit how far back RAC auditors can go in evaluating past hospital efforts; to ensure that RAC audits are completed in a timely manner and that appeals are addressed swiftly; and to ensure that future short stay policy, first and foremost, reflects the best interests of the patients hospitals serve and does not impose needless penalties on the hospitals that serve them.
Outliers
The proposed rule calls for reducing the Medicare outlier threshold from the current $24,626 to $24,485 in FY 2016. While NAUH appreciates the proposal to reduce the outlier threshold, we believe it should be reduced even further because Medicare’s spending for outlier cases this year is on target to fall below five percent – the minimum level established by Congress. For this reason, NAUH suggests that CMS consider recalculating the proposed threshold with a target of 5.5 percent of inpatient spending to ensure that the final total does not fall short and instead falls within the statutory range of five to six percent in FY 2016.

