Inpatient Prospective Payment System (IPPS) Proposed Rule Briefing

Boston, Massachusetts - May 1st, 2008 - The Centers for Medicare and Medicare Services (CMS) recently released the FY 2009 proposed rule which describes potential upcoming changes to the ways hospitals are paid for inpatient care under Medicare's inpatient prospective payment system (IPPS).

Key changes listed in the most recent proposed rule include a significant expansion to quality initiatives and additional steps to reduce payments to hospitals for "avoidable" Hospital Acquired Conditions (HACs) stemming from hospital errors.

For the coming year, CMS is proposing to expand the current HAC list to include certain surgical site infections and other preventable conditions, such as ventilator-associated pneumonias, deep vein thrombosis/pulmonary embolism, and events associated with hypoglycemia, among others. Additionally, CMS is proposing to expand the list of hospital quality measures reporting to 72 topics by adding 43 additional categories to include nursing care, cardiac surgery, patient safety, and hospital re-admissions measures.

Quality initiatives and hospital payment changes are strong drivers of hospital behavior. It is critical that manufacturers of devices used during inpatient care delivery understand hospital purchasing incentives in order to better meet customer needs in product development and pre-launch activities readying the product for market. Identifying the hospital needs in terms of the current payment systems will enable the savvy manufacturer to provide CMS with comments on the proposed rule that could induce beneficial for the final rule published in August.

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