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CMS Drops Additional Coding Offset at Request of HANYS and New York Delegation

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The final Medicare Inpatient Prospective Payment System (IPPS) rule for federal fiscal year (FFY) 2013 does not include a proposed 0.8% coding offset increase that would have cut $66 million from New York’s hospitals annually. At HANYS’ and the allied associations’ request, the entire New York State Congressional Delegation weighed in with the White House against the proposed cut.  HANYS is grateful to the Delegation, in particular to Representatives Peter King (R-Seaford) and Joseph Crowley (D-Queens) who led the effort.

HANYS strongly opposed this reduction because it used a flawed methodology and ignored the impact of the Recovery Audit Contractor (RAC) program. 

The Centers for Medicare and Medicaid Services (CMS) asserts that “coding offsets” are necessary to recoup payments made to hospitals that do not reflect real increases in patient severity of illness.  HANYS and the American Hospital Association (AHA) have identified flaws in the CMS methodology and the failure of CMS to take into account data showing increased patient severity and continue to argue for mitigating the level of the coding offset.  In addition, the associations have objected that the proposed reduction ignored the impact of the RAC and other audit programs. 

HANYS continues to oppose these coding reductions and will advocate for the deferral of any further coding reductions until an equitable methodology is developed that would properly differentiate between case-mix increases due to changes in coding behavior and case-mix changes that reflect real changes in patient characteristics and treatment patterns. 

HANYS will send additional details of the rule and hospital-specific impacts. Contact: Susan Van Meter

Published August 2, 2012