Dear Acting Administrator Norwalk:
We write to express our views regarding the Medicare Hospital Inpatient Prospective Payment System (IPPS) proposed rule for fiscal year 2008. As you know, fair and accurate Medicare payments for hospital services are a priority for the Senate Committee on Finance.
We are encouraged that the Centers for Medicare and Medicaid Services (CMS) has proposed to implement the Medicare Payment Advisory Commission’s (MedPAC) recommendation to improve the payment system’s ability to recognize patient severity of illness. These are important improvements to the payment system and we support you moving forward on their implementation as we called for in our letter last year to CMS on February 9, 2006. However, we are concerned about the agency’s proposal to prospectively reduce IPPS payments by 2.4 percent in 2008 and 2009 based on the assumption that the proposed payment system changes will result in hospitals inappropriately changing coding practices to receive higher payments.
We recognize that payment reductions may be necessary to adjust for inappropriate coding changes. While these changes may ultimately be necessary at some point in the future, these prospective payment reductions are based on speculative conclusions about how these changes will be implemented and they may have a negative financial impact, particularly on rural hospitals. As a result, we believe it is more appropriate to proceed with the implementation of these vitally needed improvements to the payment system and then determine whether such adjustments are justified after the payment system reform has actually been implemented. An evaluation could then be completed to assess whether inappropriate coding has occurred and, if so, to what degree.
Thank you for your attention to this matter. We look forward to continuing to work with you to ensure Medicare payments for hospital inpatient services are fair and appropriate. Should you have any questions regarding this letter please contact [staff].
Sincerely,
Max Baucus, Chairman
Charles E. Grassley, Ranking Member
Source: Ranking Member’s News
