The proposed rule would add five new quality measures, which would bring to 32 the number of measures hospitals would need to report in FY 2008 in order to qualify for the full market basket update in FY 2009. The five proposed measures include 30-day mortality for Medicare patients with pneumonia, and four additional measures relating to surgical care improvement. In addition, the proposed rule seeks input concerning other measures that could be added for FY 2009 and beyond.

"Taken together, these two initiatives will significantly improve the quality and reliability of care delivered in the nation's hospitals, said Norwalk. "These reforms represent CMS's continued push to become a more active purchaser of high quality care for Medicare beneficiaries."


CMS is also proposing to change the way it pays for medical devices that are recalled or replaced at no or reduced cost to the hospital. The proposed policy would be consistent with the policy CMS adopted for outpatient payments beginning January 1, 2007. Under the IPPS, payment for these devices is included in the payment for the DRG. Currently, Medicare pays the same for the second procedure even if the hospital acquires the device for free or at reduced cost, as it did for the initial procedure when the hospital had to purchase the device. The proposed rule would reduce payment when hospitals use a recalled or replacement device at no cost or with partial credit.

In keeping with the plan contained in CMS's August, 2006 final Report to Congress on specialty hospitals, the proposed rule would create new disclosure requirements for these hospitals. The proposed rule would require physician-owned hospitals to disclose such ownership to patients and provide the names of the physician owners upon request. The proposed rule would also require physician-owned hospitals to require physician owners who are members of the hospital's medical staff to disclose their ownership to the patients they refer to the hospital. Disclosure would be required at the time of referral. In addition, the proposed rule would require a hospital to notify all patients in writing if a doctor of medicine or doctor of osteopathy is not present in the hospital 24 hours a day, seven days per week, and describe how the hospital will meet the medical needs of a patient who develops an emergency condition while no doctor is on site. CMS would have the authority to terminate a provider agreement for noncompliance with these disclosure requirements.

More Industry Headlines