Finding relief from TEFRA cost limits.

Abstract

The Tax Equity and Fiscal Responsibility Act (TEFRA) limits cost-per-case rate increases for inpatient care delivered by healthcare providers excluded from Medicare's prospective payment system. Costs beyond these limits normally are not reimbursed. Under certain circumstances, however, healthcare providers can receive reimbursement beyond TEFRA limits by petitioning for an adjustment from their fiscal intermediaries and the Health Care Financing Administration. Although the request process often is lengthy, providers who can thoroughly document substantial increases in the cost of delivering care due to extraordinary circumstances, significant wage, increases, or noncompatibility of cost-reporting periods may be granted relief in the form of a rate adjustment and, in rare cases, the assignment of a new base year.