On July 31, 2015, the Centers for Medicare and Medicaid Services issued a pre-publication copy of the inpatient prospective payment system final rule for fiscal year 2016. The final rule, effective on October 1, 2015, reflects the continuing shift from volume to value-based payments. The final rule features a 0.9% increase in Medicare reimbursement for acute care hospitals that report quality data and that comply with meaningful use of electronic health record requirements. The increase in payment is comprised of a 2.4% market basket increase, a 0.5% decrease to reflect productivity adjustments, a 0.2% decrease required by the Affordable Care Act, and a 0.8% reduction in reimbursement to reflect documentation and coding adjustments under the American Taxpayer Relief Act of 2012.

The final rule will decrease long term care hospital reimbursement by 4.6%, largely resulting from the shift to 50% site neutral payment methodology in fiscal year 2016. CMS notes that reimbursement for LTCH cases that do qualify for the standard payment rate will increase by 1.7%, which includes the adjustments to acute care payments noted above.

The final rule reduces Medicare disproportionate share hospital uncompensated care payments by $1.2 billion from the estimated fiscal year 2015 amount.

CMS also made certain changes to the hospital value based purchasing program, adding a care coordination measure to be effective for the 2018 fiscal year, and including a 30-day mortality measure for chronic obstructive pulmonary disease to be effective for the 2021 fiscal year.

The final rule will be published in the Federal Register on August 17. A pre-publication copy is available here.