July 31, 2015 -- Medicare officials have released final annual payment rules that cover programs that collectively spend more than $125 billion annually. The new regulations address policy issues affecting hospital, psychiatric, rehabilitation, and hospice care.
The Centers for Medicare and Medicaid Services (CMS) had released draft versions of the four payment rules in April. CMS also reminded health care professionals of the Oct. 1 deadline for conversion to the new ICD-10 billing codes.
The rules impacted:
- Hospital inpatient payments. The biggest of the four rules in terms of expenses, the regulation covers services provided to people in the traditional Medicare system when admitted to hospitals. CMS estimated in the final rule that the changes in payment policies will increase operating payments by 0.4 percent, or $378 million, and fiscal 2016 capital payments by a 2.3 percent, or a $187 million rise. Medicare's direct expenses for hospital inpatient services plus funds for capital budgets cost more than $100 billion a year, making this one of the largest single expenses for the federal government.
- Hospice. CMS estimated that fiscal 2016 payments for care provided to people thought to be in their final months of life will rise 1.1 percent, or $160 million. Hospice is covered primarily through traditional Medicare, and not split among the government-run program and the private plans managed by insurers. Medicare spends more than $15 billion a year on the care of people considered to be within months of dying.
- Inpatient rehabilitation services. Aggregate payments will rise about 1.8 percent, or $135 million, CMS said. Inpatient rehabilitation is one of the ways in which Medicare pays for post-acute care, or the treatment of people recovering from strokes, surgeries, and other serious conditions. Medicare has been spending about $7.7 billion a year on inpatient rehabilitation. Skilled-nursing centers, which receive more than $30 billion a year from Medicare, also treat this group of patients.
- Inpatient psychiatric facilities. CMS said aggregate payments for hospice care may rise by about 1.5 percent, or $75 million, in fiscal 2016. Medicare's payments for this care have been running a total of about $5 billion.