Fifty-two senators have pressed the federal government to prevent a 2.9 percent Medicare cut to hospitals in the proposed fiscal year 2011 Inpatient Prospective Payment System (IPPS) regulation.
The proposed cut is part of a coding "offset" in the IPPS, designed to correct any overpayments hospitals may have received due to changes in Medicare billing codes.
The senators, led by Debbie Stabenow (D-Mich.) and Lisa Murkowski (R-Alaska), say the calculation for the coding offset in FY2011 is not based on enough information, including the severity or complexity of patients who are treated in the hospitals.
The proposed cut to hospital payments "may adversely affect the hospitals' ability to care for patients and serve their communities," the senators wrote in a letter sent Friday to Don Berwick, the new head of the Centers for Medicare and Medicaid Services.
According to the senators, the proposed cut would cost hospitals nationwide an estimated $3.7 billion in FY2011.
The FY2011 IPPS proposal would also provide a smaller-than-usual projected inflation update of 2.4 percent. The senators noted the proposed 2.9 percent offset would more than negate that update.
In FY2010, the Medicare Payment Advisory Commission projected a negative 5.9 percent overall margin for hospitals and has therefore recommended CMS provide a full inflation update for hospitals in FY2011.
The American Hospital Association, which conducted its own analysis of the data, said it appears the government based the proposed coding offset on historic trends, not actual data on the effect of Medicare documentation and coding changes for hospitals.