CMS issues IPPS final rule, to pay incentives to reduce 'never events'
The Centers for Medicare and Medicaid Services (CMS) put on display its final rule regarding the hospital inpatient prospective payment system (IPPS) which includes many of the anticipated Stark final rules effective Oct. 1.

The acute-care IPPS rule is on display at the Office of the Federal Register and will be published Aug. 18.

CMS has proposed many changes in various proposed rules over the past few years and addresses many of the issues for which they have received comment in the final rule. The proposals include burden of proof, per-click leasing arrangements, set-in-advance and percentage-based compensation, stand-in-the shoes provisions, services furnished under arrangements, alternative criteria for satisfying certain exceptions and a period of disallowance for noncompliant financial relationships.

Medicare payments to hospitals for fiscal year 2009 will provide additional incentives for hospitals to improve the quality of care provided to people with Medicare. As part of the incentives, the rule includes payment provisions to reduce never events that occur in hospitals.

In addition to the final rule, CMS said it sent a letter to state Medicaid directors providing information about how states can adopt the same never events practices. The letter encourages states to adopt the same non-payment policies outlined in this final Medicare rule. The agency said that nearly 20 states already have or are considering methods to eliminate payment for some never events.

CMS said that its goals with the rule are: “minimizing the threat of program and patient abuse while providing sufficient flexibility to enable those who are parties to financial relationships to satisfy the requirements of, and remain in compliance with, the physician self-referral law and the exceptions thereto. Finalizing together the proposals from the CY 2008 PFS and the FY 2009 IPPS proposed rules is consistent with our outlined approach.”

CMS is beginning a process to develop three National Coverage Determinations (NCDs) that would address Medicare coverage of certain surgical procedures. Medicare NCDs set national policy on whether the agency will cover an item or service and under what conditions. In the absence of an NCD, coverage decisions are made by the local contractors that process and pay Medicare claims. The three types of surgery under consideration are surgery on the wrong body part, surgery on the wrong patient and wrong surgery performed on a patient. 

CMS has begun the NCD process by commencing a national coverage analysis with a 30-day public comment period.