CMS Releases 2014 Medicare Inpatient Prospective Payment System Rule

On April 26, the Centers for Medicare and Medicaid Services (CMS) released the 2014 Medicare Inpatient Prospective Payment System rule, which covers payments to hospitals for services provided to inpatients. The dense regulation includes a number of provisions of interest to cardiovascular medicine.  Overall payments are scheduled to increase by 0.8 percent from current levels; however, it is important to remember that payment cuts of 2 percent associated with the government sequester are the new baseline. Therefore, these levels are 1.2 percent below payments on Dec. 1, 2012. Payment levels for different services can vary more from year to year based on the costs of providing care. 

Some specific proposals of note include:  

  • A proposal to implement a technical change to how payments are calculated for services that involve cardiac catheterization labs and/or implantable devices. CMS indicates that most services that involve extensive use of these labs will have payments increase. The rule provides an example of an ICD implantation that would increase by 6 percent. ACC staff is analyzing the rule to determine the effect on other cardiovascular services.
  • A proposal to eliminate the use of four cardiovascular performance measures from the hospital quality reporting program. Three of the measures (AMI: aspirin at discharge, AMI: statin at discharge, and heart failure: ACE/ARB) are proposed to be eliminated due to near universal high performance among hospitals. A fourth measure for heart failure discharge instructions is proposed to be eliminated due to CMS stating that there is a poor correlation with outcomes.

  • A proposal to add additional measures of performance for the cost of care in the 30 days following discharge for an AMI and a proposal to add readmission and mortality rates for stroke patients starting in the 2016 fiscal year.
  • A proposal to expand the penalty program for excess readmission rates by increasing the penalties from 1 percent to 2 percent and adding index admission used to assess the readmission rate. Currently, the rate is determined on the basis of readmissions for heart failure, AMI and pneumonia. Although it had been anticipated that both CABG and PCI readmissions would be added to the list, they were not. In addition, more cases that are planned readmissions would not be considered to count towards a readmission rate.
  • A proposal that a patient who spends two “midnights” would generally qualify as an inpatient and be eligible for payments under Medicare Part A. There are ongoing issues related to the definition of inpatient and outpatient for patients hospitalized for short stay medical conditions.


While it does not make any specific proposal, CMS is accepting comments on the appropriateness of “new technology” payments being made for mitral valve clip procedures and Kcentra, a drug that is used to treat severe bleeding in patients taking warfarin.  “New technology” payments are sometimes made for services that are replacements for other technology that offer substantial clinical improvement but may cost more. 

ACC staff will continue to review this rule and will work with leadership to respond to the many proposals. Stay tuned to the ACC Advocate for updates.

Keywords: Stroke, Pneumonia, Medicare Part A, Cardiac Catheterization, Warfarin, Centers for Medicare and Medicaid Services, U.S., Inpatients, Outpatients, Heart Failure, United States, Mitral Valve, Prospective Payment System

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