CMS published the 2011 Inpatient Prospective Payment System Proposed Rule on May 4, 2010.  This year's proposals include changes to the MS-DRG payment rates for 2011, clarification on provider aggreements and supplier approvals, new COPs (Hospital Conditions of Participation) for Rehabilitation and Respiratory care services, and accreditation requirements for Inpatient Psychiatric services for individuals under the Age of 21.

This year's rule is 472 pages, with additional data and files not included in the rule (published instead on the CMS website).

A conversation was recently had with a CMS representative regarding their policy and billing instructions associated with observation hours and services in situations when a patient is admitted as an inpatient but is subsequently found to be only eligible for observation; thus billed as an outpatient on the UB-04 reporting the Condition code 44.

One of the more difficult issues facing hospitals today is related to the timely claim filing rules associated with re-billing ancillary charges for denied inpatient stays.

Under the RAC demonstration project, CMS allowed hospitals to re-bill their RAC denied inpatient short stay hospitalization cases as outpatient claims. The UB-04 claim type used to submit these claims for benefits was the traditional 13x; and Medicare Part B hospital benefit policies dictated coverage of services and payments.