The Centers for Medicare and Medicaid Services (CMS) issued a proposed payment regulation for inpatient stays at hospitals. According to the government agency, the rule will help to improve the connection between payment and quality for patients.

If passed, the rule would update fiscal year 2015 Medicare payment policies and rates for stays at general acute care and long-term care hospitals. The rule was proposed in order to promote better health care for hospital patients and slow the cost growth of long-term care.

The payment rate update to general acute care hospitals will be 1.3 percent in the next fiscal year while long term care will be 0.8 percent. The biggest changes to the rules would be payment provisions that will reduce payment for readmissions and hospital acquired conditions. Price transparency for patients and the public will also be required if the rule is approved.

"The policies announced today will assist the highly committed professionals working around the clock to deliver the best possible care to Medicare beneficiaries," CMS Administrator Marilyn Tavenner said in a press release. "This proposed rule is geared toward improving hospital performance while creating an environment for improved Medicare beneficiary care and satisfaction."

CMS will allow for a one-year transition for hospitals who would experience a decrease in the payment wage index if the proposal is passed.

Improving patient care
Currently, there's the hospital value-based purchasing program, hospital readmissions reduction program, hospital-acquired condition reduction program and wage index to help improve patient care for those with Medicare. The hospital value-based purchasing program was established by the Affordable Care Act and adjusts the payments hospitals receive according to the quality of care patients receive from these establishments.

The hospital readmissions reduction program will increase the maximum reduction in payments to 3 percent and issue penalties to hospitals with five readmissions. According to CMS, hospital readmissions for Medicare patients declined by 150,000 from January 2012 through December 2013.

CMS proposed an implementation of the ACA's hospital acquired condition reduction program. This means hospitals with the highest rate of hospital acquired conditions will see Medicare inpatient payments fall by 1 percent.

The new proposal will also make adjustments to measures for the hospital inpatient quality reporting, long-term care hospital quality reporting and PPS-exempt cancer hospital quality reporting programs.

CMS will maintain a more accurate and up-to-date payment system using a wage index to reflect population shifts and labor market conditions according to Census data.