Medicare Raises Hospital Payment Rates for FY2015

The U.S. government said on Monday that it will increase the operating payments that acute-care and long-term care hospitals receive from Medicare for inpatient care for the federal fiscal year that begins on Oct. 1.

The Centers for Medicare and Medicaid Services (CMS) announced a 1.4 percent rate update for 3,400 acute care hospitals and a 1.1 percent rate update for 435 long-term care hospitals for fiscal year 2015.

CMS also announced a market basket update of 2.9 percent but said the rate could vary depending on whether a hospital participates in government efforts to address quality care issues and automates its information systems to accommodate electronic health records. The market basket, a fixed index of goods and services, reflects the influence of inflation and is used to update payments and cost limits within Medicare.

Under a final rule released on Monday, CMS said the market basket update would decrease by one-quarter among hospitals that do not successfully participate in its quality reporting program or use electronic health records in a meaningful way.

Overall, CMS projected that payments to acute-care hospitals would decrease by $756 million, while payments to long-term hospitals would rise by $62 million.