The Centers for Medicare and Medicaid Services (CMS) yesterday issued a final rule intended to improve the accuracy of Medicare’s payment under the acute care hospital inpatient prospective payment system (IPPS), while providing additional incentives for hospitals to engage in quality improvement efforts.
The IPPS payment reforms would restructure the inpatient diagnosis-related groups (DRGs) to account more fully for the severity of each patient’s condition, includes provisions to ensure that Medicare no longer pays for the additional costs of certain preventable conditions (including certain infections) acquired in the hospital, and expands the list of publicly reported quality measures.
Payments to all hospitals will increase by an estimated average of 3.5 percent for FY08, or by more than $3.8 billion, when all provisions of the rule are taken into account, primarily as a result of the 3.3 percent market basket increase. In addition, the rule creates 745 new severity-adjusted DRGs to replace the current 538 DRGs. The new severity-adjusted DRGs will be phased in over two years, rather than one year, as detailed in April’s proposed rule. Read the fact sheet.
