On Friday, April 26, the Centers for Medicare and Medicaid Services (CMS) issued a crucial payment system rule that proposes updated rates and regulatory policies for inpatient hospitals (including inpatient psychiatric facilities) and for long term care hospitals. The Proposed Rule incorporates update factors for FY 2014 rates effective October 1, 2013 and sets forth new proposed policies and policy revisions with respect to patient quality, including hospital acquired condition and readmission reduction programs, and admission and medical review criteria.

In general, Cozen O’Connor believes the Proposed Rule represents a fair starting point for Inpatient Prospective Payment System (IPPS) hospitals for FY 2014 and offers stakeholders an important opportunity to provide comments that CMS specifically suggests could help shape final policy.