Medicare’s FY2011 Inpatient Prospective Payment System (IPPS) proposed rule was released on Medicare’s website March 19 and published in the Federal Register (PDF) May 4. The attached worksheet specifies Medicare’s proposed FY2011 national average payments for a range of spinal procedures (PDF), effective October 1. Upon close review, you will see:
- Slight increase in Spinal Procedure, Lumbar Spinal fusion, Cervical Spinal Fusion, Vertebral Augmentation and Back/Neck Procedure MS-DRGs.
- Proposed lower average length of stay.
- Proposed higher Weight per MS-DRG, due to hospital’s coding and cost reporting practices.
- Proposed lower Base Rate to off-set this up-coding practice.
- Bottom line, hospital reimbursement is proposed to be slightly higher to hospitals performing these spinal procedures in FY2011.
This is good news, in view of the following policy decisions proposed by CMS to take effect on October 1, 2010:
- Estimated $142 million decrease in FY011 operating payments (or -0.1% increase) and an estimated $20 million decrease in FY2011 capital payments (or -0.2% change).
- CMS operating impact estimate includes the proposed -2.9% documentation and coding adjustment applied to the hospital-specific rates.
- Therefore, CMS is proposing to reduce the national standardized amount for IPPS hospitals by 2.9% in FY2011, with additional reductions in subsequent years.
- Bottomline: CMS believes it has overpaid hospitals under the MS-DRG system, with hospitals "upcoding" patient severity of illness, in order to obtain a higher MS-DRG assignment.
- Also in this rule, CMS continues to acknowledge the problem of "charge compression" for high-priced supplies, but does not offer a tangible solution.
In terms of specific spine devices, there is only one issue – it relates to Zimmer’s request to move Dynesys out of the Back & Neck MS-DRG 490 and into the higher paying spinal fusion MS-DRG 460. Medicare proposes NOT to reassign Dynesys cases, because "insertion of a Dynesys Dynamic Stablization System is not clinically a lumbar spinal fusion". There is nothing else about any other minimally invasive spine technology in this rule.
There is much more that could be shared from this lengthy proposed rule! From a health policy perspective, please note, at the close of this proposed rule, CMS states that due to the timing of the healthcare reform bill enacted on March 23, 2010, this proposed IPPS rule does NOT reflect the proposed policies and payment rates from this new legislation. CMS indicates it plans to issue separate documents at a later date.