CMS Proposes Fiscal 2014 Rates for Inpatient
Hospital Care

May 6, 2013


CMS Proposes Fiscal 2014 Rates for Inpatient Hospital Care


The Centers for Medicare & Medicaid Services issued a proposed rule April 26, 2013, that would update Medicare payment policies and rates under the inpatient prospective payment system for fiscal year 2014, which begins October 1, 2013. Rates would increase by 0.8 percent under the proposal, though they would decrease by 2 percentage points for hospitals that do not successfully participate in the Hospital Inpatient Quality Reporting Program.


Other highlights of the proposed rule:

  • The maximum reduction under the Hospital Readmissions Reduction program will increase from one percent to two percent of payment amounts in FY 2014, and two more readmission measures will be used to calculate penalties in FY 2015:  readmissions for hip/knee arthroplasty and chronic obstructive pulmonary disease.
  • The  proposed rule outlines a general framework for the Hospital-Acquired Conditions Reduction program which will begin implementation in fiscal year 2015.  Under that program, hospitals that rank among the lowest-performing 25 percent with regard to hospital-acquired conditions will be paid 99 percent of what they would otherwise be paid.
  • The proposed rule makes changes in the Hospital Inpatient Quality Reporting program that now includes the 57 quality measures listed in the proposed rule.
  • In the Value-based Purchasing Program for fiscal year 2014, the proposed rule increases to 1.25 percent the applicable percent reduction to base operating DRG payment amounts.  It also  increases the total estimated amount available for value-based incentive payments (approximately $1.1 billion).
  • Under the proposed rule, CMS intends to implement new cost centers for implantable devices, MRIs, CT scans, and cardiac catheterization for fiscal year 2014, bringing the total number of cost-to-charge ratios used to calculate the FY 2014 proposed relative weights from 15 to 19.

CMS will accept comments on the proposed rule until June 25, 2013.


To view a CMS press release, click here.


To view the proposed rule in the Federal Register, click here.