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PubMed1996

Medicare program; changes to the hospital inpatient prospective payment systems and fiscal year 1997 rates--HCFA. Final rule.

We are revising the Medicare hospital inpatient prospective payment systems for operating costs and capital-related costs to implement necessary changes arising from our continuing experience with the systems. In addition, in the addendum to this final rule, we are describing changes in the amounts and factors necessary to determine prospective payment rates for Medicare hospital inpatient services for operating costs and capital-related costs. These changes are applicable to discharges occurring on or after October 1, 1996. We are also setting forth rate-of-increase limits as well as policy changes for hospitals and hospital units excluded from the prospective payment systems.

Centers for Medicare and Medicaid Services, U.S.↗

PubMed1992

Medicare program; changes to the hospital inpatient prospective payment systems and fiscal year 1993 rates--HCFA. Final rule.

We are revising the Medicare hospital inpatient prospective payment systems for operating costs and capital-related costs to implement necessary changes arising from our continuing experience with the systems. In addition, in the addendum to this final rule, we are describing changes in the amounts and factors necessary to determine prospective payment rates for Medicare hospital inpatient services for operating costs and capital-related costs. These changes will be applicable to discharges occurring on or after October 1, 1992. We are also setting forth rate-of-increase limits for hospitals and hospital units excluded from the prospective payment systems. Finally, we are changing and clarifying the criteria and procedures concerning the reclassification of hospitals by the Medicare Geographic Classification Review Board (MGCRB). These changes result from public comment and our analysis of hospital reclassifications for Federal fiscal year (FY) 1992.

Capital Expenditures↗

PubMed1986

Medicare program; changes to the inpatient hospital prospective payment system and fiscal year 1987 rates--HCFA. Final rule.

We are amending the Medicare regulations governing the inpatient hospital prospective payment system to implement necessary changes arising from legislation and our continuing experience with the system. In addition, we are describing changes in the methods, amounts, and factors necessary to determine prospective payment rates for Medicare inpatient hospital services. In general, these changes are applicable to discharges occurring on or after October 1, 1986. We are also setting forth the update factor for determining the rate-of-increase limits (target amounts) for hospitals excluded from the prospective payment system.

Centers for Medicare and Medicaid Services, U.S.↗

PubMed2003

Have DRG-based prospective payment systems influenced the number of secondary diagnoses in health care administrative data?

Diagnosis-related groups (DRGs) are secondary patient classification systems based on primary classified medical data, in which single events of care are grouped into larger, economically and medically consistent groups. The main primary classified medical data are diagnoses and surgery codes. In Sweden, the number of secondary diagnoses per case increased during the 1990s. In the early 1990s some county councils introduced DRG systems. The present study investigated whether the introduction of such systems had influenced the number of secondary diagnoses. The nation-wide Hospital Discharge Register from 1988 to 2000 was used for the analyses. All regional hospitals were included, giving a database of 5,355,000 discharges. The hospitals were divided into those that had introduced prospective payment systems during the study period and those that had not. Among all regional hospitals, there was an increase in the number of coded secondary diagnoses, but also in the number of secondary diagnoses per case. Hospitals with prospective payment systems had a larger increase, starting after the system was introduced. Regional hospitals without prospect payment systems had a more constant increase, starting later and coinciding with the introduction of their DRG-based management systems. It is concluded that introduction of DRG-based systems, irrespective of use, focuses on recording diagnoses and therefore increases the number of diagnoses. Other reasons may also have contributed to the increase. It was found that the changes in the speciality mix, during the study period, have impact on the increase of secondary diagnoses.

Comorbidity↗

PubMed1997

Medicare program; changes to the hospital inpatient prospective payment systems and fiscal year 1998 rates--HCFA. Proposed rule.

We are proposing to revise the Medicare hospital inpatient prospective payment systems for operating costs to implement necessary changes arising from our continuing experience with the systems. In addition, in the addendum to this proposed rule, we are describing proposed changes in the amounts and factors necessary to determine prospective payment rates for Medicare hospital inpatient services for operating costs and capital-related costs. These changes would be applicable to discharges occurring on or after October 1, 1997. We are also setting forth proposed rate-of-increase limits as well as proposing changes for hospitals and hospital units excluded from the prospective payment systems.

Centers for Medicare and Medicaid Services, U.S.↗

PubMed1998

Medicare program; changes to the hospital inpatient prospective payment systems and fiscal year 1999 rates--HCFA. Final rule.

We are revising the Medicare hospital inpatient prospective payment systems for operating costs and capital-related costs to implement applicable statutory requirements, including section 4407 of the Balanced Budget Act of 1997 (BBA), as well as changes arising from our continuing experience with the systems. In addition, in the addendum to this final rule, we describe changes in the amounts and factors necessary to determine rates for Medicare hospital inpatient services for operating costs and capital-related costs. These changes are applicable to discharges occurring on or after October 1, 1998. We also set forth rate-of-increase limits as well as changes for hospitals and hospital units excluded from the prospective payment systems. Finally, we are implementing the provisions of section 4625 of the BBA concerning payment for the direct costs of graduate medical education.

Centers for Medicare and Medicaid Services, U.S.↗

PubMed1988

Medicare program; changes to the inpatient hospital prospective payment system and fiscal year 1989 rates--HCFA. Final rule with comment period.

We are revising the Medicare inpatient hospital prospective payment system to implement necessary changes arising from legislation and our continuing experience with the system. In addition, in the addendum to this rule, we describe changes in the methods, amounts, and factors necessary to determine prospective payment rates for Medicare inpatient hospital services. In general, these changes are applicable to discharges occurring on or after October 1, 1988. We also set forth rate-of-increase limits for hospitals and hospital units excluded from the prospective payment system.

Centers for Medicare and Medicaid Services, U.S.↗

PubMed1986

Implications of Medicare's prospective payment system for the provision of uncompensated hospital care.

Medicare's prospective payment system (PPS) has the potential to directly affect the level of uncompensated care provided by hospitals. Hospitals that realize deficits for their Medicare patients may have to limit provision of uncompensated care whereas those that realize surpluses may provide more free care. This paper measures these potential effects by combining simulation estimates of PPS's impact on the revenues of high-volume providers of uncompensated care with regression estimates of the impact of changes in hospitals' financial margins on uncompensated care. Our analysis indicates that PPS may result in a slight increase in the aggregate amount of uncompensated care provided by hospitals, but that it will likely reduce care for the indigent in some localities. Potential modifications to PPS--particularly those that limit price increases or reduce the indirect teaching adjustment--could eventually reduce any of the initial positive effects on uncompensated care and enhance the negative effects.

Cost Allocation↗

PubMed1992

Medicare reimbursement accuracy under the prospective payment system, 1985 to 1988.

BACKGROUND: Hospital reimbursement by Medicare's prospective payment system depends on accurate identification and coding of inpatients' diagnoses and procedures using the International Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9-CM). A previous study showed that 20.8% +/- 0.5% (mean +/- SE) of hospital bills for 1985 contained errors that changed their diagnosis related group (DRG) and that a significant 61.6% +/- 1.3% of errors overreimbursed the hospitals. This DRG "creep" improperly increased net reimbursement by 1.9%, +308 million when projected nationally. The present study updated our previous study with 1988 data. METHODS: The Office of Inspector General, US Department of Health and Human Services, obtained a simple random sample of 2451 hospital charts for Medicare discharges from 1988. The American Medical Record Association reabstracted the ICD-9-CM codes on a blinded basis, grouped them to DRGs, and determined the reasons for discrepancies. RESULTS: Coding errors declined to 14.7% +/- 0.7% in 1988, and a nonsignificant 50.7% +/- 2.6% of DRG errors overreimbursed the hospitals. Projected nationally, hospitals did not receive a significant overreimbursement. Physician misspecification of the narrative diagnoses underreimbursed the hospitals, while billing department resequencing overreimbursed them. CONCLUSIONS: The attestation requirement may have deterred DRG creep due to attending physician upcoding, but the peer review organizations' sentinel effect and educational activities have not eliminated hospital resequencing.

Abstracting and Indexing↗

PubMed1993

Possible influence of the prospective payment system on the assignment of discharge diagnoses for coronary heart disease.

BACKGROUND: The prospective payment system, under which diagnosis-related groups (DRGs) are used to reimburse hospitals for the care of Medicare patients, replaced the fee-for-service method of payment in Rhode Island in 1983 and in Massachusetts in 1985. Changes in financial incentives resulting from the use of the DRG system may have influenced the assignment of discharge diagnostic codes away from those with lower reimbursement toward codes with higher reimbursement. METHODS: We collected data from the hospital records of patients 35 through 74 years of age who were discharged with codes 410 through 414 (representing various categories of coronary heart disease) of the International Classification of Diseases, 9th Revision, Clinical Modification (ICD-9-CM). The patients were discharged from seven hospitals in two New England communities (one in Rhode Island and one in Massachusetts) between 1980 and 1988. The rates of diagnosis of various forms of coronary heart disease were determined by studying ICD-9-CM hospital discharge codes (codes 410 and 411 for acute forms of coronary heart disease and codes 412, 413, and 414 for chronic forms) and by using a computerized diagnostic algorithm designed to detect definite myocardial infarction and fatal coronary heart disease. RESULTS: The rates of definite coronary events diagnosed by the algorithm and by the study of ICD-9-CM codes 410 through 414 were constant or increased slightly during the study period. However, the frequency of assignment of codes for the acute forms of coronary heart disease (which entail higher reimbursement) rose from 35.2 percent to 48.4 percent among discharged patients with cardiac disease after the institution of DRGs. The majority of this increase was associated with the code for unstable angina pectoris. The frequency of assignment of codes for the chronic forms of coronary heart disease (which entail lower reimbursement) decreased reciprocally, from 64.8 percent to 51.6 percent (P < 0.001). CONCLUSIONS: Our data are consistent with the hypothesis that the prospective reimbursement system has influenced the assignment of hospital discharge codes in a way that would increase payment to hospitals. However, the data do not permit us to distinguish whether hospitals began to assign more precise diagnoses with the advent of the DRG system, or whether they began to favor diagnoses of acute conditions solely for financial reasons.

Acute Disease↗

PubMed1994

Medicare program; changes to the hospital inpatient prospective payment systems and fiscal year 1995 rates--HCFA. Final rule with comment period.

We are revising the Medicare hospital inpatient prospective payment systems for operating costs and capital-related costs to implement necessary changes arising from our continuing experience with the system. In addition, in the addendum to this final rule, we are describing changes in the amounts and factors necessary to determine prospective payment rates for Medicare hospital inpatient services for operating costs and capital-related costs. These changes are applicable to discharges occurring on or after October 1, 1994. We are also setting forth rate-of-increase limits for hospitals and hospital units excluded from the prospective payment systems. Finally, we are revising the criteria used by the Medicare Geographic Classification Review Board (MGCRB) to decide on applications by hospitals for geographic reclassification for prospective payment purposes.

Capital Financing↗

PubMed1990

Quality of care before and after implementation of the DRG-based prospective payment system. A summary of effects.

In this series we have described changes in the quality of care that have occurred in the treatment of hospitalized elderly Medicare patients with one of five conditions between 1981-1982 and 1985-1986. In this article we report on a mortality analysis, patient and hospital subgroup comparisons, and time series studies we have conducted in an attempt to determine whether changes in quality of care can be linked causally to the introduction of the prospective payment system. Based on these analyses we conclude that (1) mortality following hospitalization has been unaffected by the introduction of the prospective payment system, and improvements in in-hospital processes of care that began prior to the prospective payment system have continued after its introduction, but (2) the prospective payment system has increased the likelihood that a patient will be discharged home in an unstable condition. We recommend that efforts to correct this problem be intensified and that clinical monitoring of the impact of the prospective payment system continue as hospital cost-containment pressures intensify.

Continuity of Patient Care↗

PubMed2003

Medicare program, changes to the hospital outpatient prospective payment system and calendar year 2004 payment rates. Final rule with comment period.

This final rule with comment period revises the Medicare hospital outpatient prospective payment system to implement applicable statutory requirements and changes arising from our continuing experience with this system. In addition, it describes changes to the amounts and factors used to determine the payment rates for Medicare hospital outpatient services paid under the prospective payment system. These changes are applicable to services furnished on or after January 1, 2004. Finally, this rule responds to public comments received on the August 12, 2003 proposed rule for revisions to the hospital outpatient prospective payment system and payment rates (68 FR 47966).

Centers for Medicare and Medicaid Services, U.S.↗

PubMed1997

Evaluation of a prospective payment system for hospital-based outpatient care.

The design of a prospective payment system (PPS) for outpatient care based on ambulatory patient groups (APGs) requires numerous policy decisions to be made. The policy issues include the method of computing payment weights, the extent of ancillary packaging, the window of time for ancillary packaging, the extent of multiple procedure discounting, and the outlier policy. Financial simulations of an APG-based outpatient PPS were performed in order to evaluate the impact of alternative policy decisions. Recommendations are made relative to each policy issue.

Ambulatory Care↗

PubMed1997

Medicare program; changes to the hospital inpatient prospective payment systems and fiscal year 1998 rates--HCFA. Final rule with comment period.

We are revising the Medicare hospital inpatient prospective payment systems for operating costs and capital-related costs to implement necessary changes resulting from the Balanced Budget Act of 1997, Pub. L. 105-33, and changes arising from our continuing experience with the systems. In the addendum to this final rule with comment period, we describe changes in the amounts and factors necessary to determine prospective payment rates for Medicare hospital inpatient services for operating costs and capital-related costs. Generally, these changes are applicable to discharges occurring on or after October 1, 1997. We also set forth rate-of-increase limits and changes for hospitals and hospital units excluded from the prospective payment systems.

Capital Expenditures↗

PubMed2002

Medicare program; changes to the hospital inpatient prospective payment systems and fiscal year 2003 rates. Final rule.

We are revising the Medicare acute care hospital inpatient prospective payment systems for operating and capital costs to implement changes arising from our continuing experience with these systems. In addition, in the Addendum to this final rule, we describe the changes to the amounts and factors used to determine the rates for Medicare hospital inpatient services for operating costs and capital-related costs. These changes are applicable to discharges occurring on or after October 1, 2002. We also are setting forth rate-of-increase limits as well as policy changes for hospitals and hospital units excluded from the acute care hospital inpatient prospective payment systems. In addition, we are setting forth changes to other hospital payment policies, which include policies governing: Payments to hospitals for the direct and indirect costs of graduate medical education; pass-through payments for the services of nonphysician anesthetists in some rural hospitals; clinical requirements for swing-bed services in critical access hospitals (CAHs); and requirements and responsibilities related to provider-based entities.

Centers for Medicare and Medicaid Services, U.S.↗

PubMed1995

Medicare program; changes to the hospital inpatient prospective payment systems and fiscal year 1996 rates--HCFA. Final rule with comment period.

We are revising the Medicare hospital inpatient prospective payment systems for operating costs and capital-related costs to implement necessary changes arising from our continuing experience with the system. In addition, in the addendum to this final rule, we are describing changes in the amounts and factors necessary to determine prospective payment rates for Medicare hospital inpatient services for operating costs and capital-related costs. These changes are applicable to discharges occurring on or after October 1, 1995. We are also setting forth rate-of-increase limits as well as policy changes for hospitals and hospital units excluded from the prospective payment systems. Finally, we are setting forth several requirements concerning Essential Access Community Hospitals (EACHs) and Rural Primary Care Hospitals (RPCHs), in accordance with provisions of the Social Security Act Amendments of 1994.

Centers for Medicare and Medicaid Services, U.S.↗

PubMed1987

Ethical issues in the use of a prospective payment system: the issue of a severity of illness adjustment.

The current Medicare prospective payment system has many positive incentives for hospitals to control costs. Hospitals are increasing outpatient surgery, decreasing admissions, decreasing length of stay, and decreasing use of ancillary services. These are just the effects that Congress and the Health Care Financing Administration hoped for to save the Medicare trust fund. However, there has been evidence of some adverse outcomes including premature discharge, "dumping" sicker patients and patients without insurance, and adverse impact on hospitals with specialty centers. We examine these issues and present a possible solution based on a new Computerized Severity Index.

Cost Control↗