Hospitals are currently required to report 30 quality measures on their claims for Medicare inpatient services to qualify for a full update to their FY 2009 payment rates. CMS had discussed 43 new quality measures in the proposed rule and requested public comment on those measures. After reviewing public comments on the proposed rule, CMS decided to add only 13 measures.

CMS is also finalizing its proposal to retire one pneumonia measure - oxygenation assessment - effective January 1, 2009. Therefore, the total number of measures for reporting in 2009 will be 42. The retirement of a measure reflects hospitals overall improvement of care for this condition and creates the opportunity for additional quality measures to be added, thus further enhancing the opportunity for Medicare to measure care and drive overall improvement.


The IPPS, which was first implemented in 1983, was intended to reward hospitals for being efficient by making a single payment to the hospital based on the average costs of treating a patient with a particular diagnosis, rather than paying for the actual costs of each case. However, until the 2005 DRA, Medicare did not have the legal authority to use its payment system to encourage hospitals to improve the quality and reliability of care they furnish.

"While it may be some time before we can begin to assess the real impact of these steps on patient care, we are hearing from hospitals around the country about efforts they have undertaken in the past year to improve staff training and other measures to reduce the incidence of these preventable conditions," Weems said. "And other payers, both public and private, are beginning to adopt similar policies in their payment systems. This is a win-win situation: better outcomes at less overall cost."

The final IPPS rule updates payment policies and rates for more than 3,500 hospitals that are paid under Medicare's diagnosis related group (DRG) payment system and is designed to promote the Administration's goal of transforming Medicare to a prudent purchaser of health care services, paying for quality of services, not just quantity. Overall, the final rule is estimated to increase Medicare payments to acute care hospitals by nearly $4.75 billion.

The final rule appeared in the August 19, 2008 Federal Register, and will be effective for discharges on or after October 1, 2008.

For more information, please see the CMS Web site at:
http://www.cms.hhs.gov/AcuteInpatientPPS/IPPS/itemdetail.asp?

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