On April 24, 2011, CMS issued a proposed rule to revise the Medicare hospital inpatient prospective payment systems (IPPS) for acute care hospitals and the prospective payment system for inpatient services provided by long-term care hospitals for fiscal year (FY) 2013 (Proposed Rule). In the Proposed Rule, CMS continues to implement statutory provisions from the 2010 Patient Protection and Affordable Care Act (PPACA) and makes additional changes to the IPPS. The changes under the Proposed Rule would be applicable to discharges occurring on or after October 1, 2012. Highlights from the Proposed Rule include the following:

• CMS projects that payment rates to general acute care hospitals will increase by 2.3 percent in FY 2013. The 2.3 percent is a net update after inflation, improvements in productivity, a statutory adjustment factor, and adjustments for hospital documentation and coding changes. CMS projects that the rate increase, together with other policies in the proposed rule and projected utilization of inpatient services, would increase Medicare’s operating payments to acute care hospitals by approximately 0.9 percent in FY 2013.

• The number of Inpatient Quality Reporting (IQR) quality measures would be reduced from 72 to 59 for FY 2015, which includes the addition of four new quality measures....