On April 18, the Centers for Medicare and Medicaid Services (CMS) released the proposed 2017 Hospital Inpatient and Long-Term Care Hospital (LTCH) payment and policy rule. The proposed rule, which would apply to approximately 3,330 acute care hospitals and approximately 430 LTCHs, would affect discharges occurring on or after October 1, 2016. (Please note physician payment is made via the Physician Fee Schedule, which will be released in July.)

The Hospital Inpatient Prospective Payment System (IPPS) pays hospitals for services provided to Medicare beneficiaries using a national base payment rate, adjusted for a number of factors that affect hospitals’ costs, including the patient’s condition and the cost of hospital labor in the hospital’s geographic area. CMS generally sets payment rates prospectively for inpatient stays based on the patient’s diagnosis and severity of illness. A hospital receives a single payment for the case based on the payment classification (MS-DRGs under the IPPS) assigned at discharge.

The following provisions relate to hospital payment and policy for inpatient spine surgery:

• The SFusion Payment Measure
• Reassignment of Decompression Laminectomy Codes
• Removal of Lordosis Codes from Secondary Diagnosis List
• Evaluation of New Technology Add-On Payments
• Addition of Reposition Codes to MDC 8 in MS-DRGs 515, 516, and 517

A more detailed summary including provisions related to spine surgery can be found here. ISASS submitted comments to CMS regarding the proposed SFusion payment measure. A copy of the ISASS letter can be found here. The final rule is expected to be released by August 1, 2016.