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PubMed2004

Length of hospital stay of Medicare patients in the post-prospective-payment-system era.

This study examines factors determining hospital length of stay (LOS) for Medicare patients in the post-prospective-payment-system (PPS) era according to type of ownership, geographical region, bed size, and financial performance. The study design includes a number of economic and financial variables. In the empirical findings, the following factors are significant in determining hospital LOS of Medicare patients: hospital size, type of ownership, profitability, teaching status, and competition. Other studies have examined factors influencing length of hospitalization; however, none of these studies investigates the effect on LOS of a change in the type of hospital ownership. Furthermore, this study uses more recent and comprehensive data than in the current literature.

Hospital Bed Capacity↗
PubMedDate not supplied

Medicare's prospective payment system for skilled nursing facilities: effects on staffing and quality of care.

In 1998, Medicare began phasing in a new prospective payment system (PPS) for skilled nursing facilities (SNFs). This paper measures facility-level changes in nurse staffing and quality at freestanding SNFs from 1997 (pre-PPS) to 2001 (post-PPS). Findings show a positive but small association between changes in payment levels and changes in nurse staffing. Among for-profits, the elimination of cost reimbursement is associated with a large drop in nurse staffing. Additionally, the elimination of cost reimbursement is associated with worsening in one of four measures of quality of care; however, the quality results are not statistically robust.

Humans↗
PubMed1990

Toward a prospective payment system for ambulatory surgery.

In this article, ambulatory surgery among the aged Medicare population in 1985 is examined. Total hospital facility charges for ambulatory surgery in that year were estimated at $1.8 billion, with about one-half of that amount involving cataract surgery. The possibility of using diagnosis-related groups for a prospective payment system for ambulatory surgery was examined and was rejected for two reasons: (1) about 20 percent of the dollar volume of hospital-based ambulatory surgery fell into medical diagnosis-related groups and (2) the ratio of inpatient diagnosis-related group weight to outpatient billed charges for the ambulatory procedures falling into a given diagnosis-related group varied more than tenfold, making diagnosis-related group weights impossible to use in a consistent manner. A newly developed version of ambulatory visit groups and the even newer ambulatory patient groups were then considered as an alternative for a prospective payment system. These are briefly described.

Aged↗
PubMed2003

Medicare program; change in methodology for determining payment for extraordinarily high-cost cases (cost outliers) under the acute care hospital inpatient and long-term care hospital prospective payment systems. Final rule.

In this final rule, we are revising the methodology for determining payments for extraordinarily high-cost cases (cost outliers) made to Medicare-participating hospitals under the acute care hospital inpatient prospective payment system (IPPS). Under the existing outlier methodology, the cost-to-charge ratios from hospitals' latest settled cost reports are used in determining a fixed-loss amount cost outlier threshold. We have become aware that, in some cases, hospitals' recent rate-of-charge increases greatly exceed their rate-of-cost increases. Because there is a time lag between the cost-to-charge ratios from the latest settled cost report and current charges, this disparity in the rate-of-increases for charges and costs results in cost-to-charge ratios that are too high, which in turn results in an overestimation of hospitals' current costs per case. Therefore, we are revising our outlier payment methodology to ensure that outlier payments are made only for truly expensive cases. We also are revising the methodology used to determine payment for high-cost outlier and short-stay outlier cases that are made to Medicare-participating long-term care hospitals (LTCHs) under the long-term care hospital prospective payment system (LTCH PPS). The policies for determining outlier payment under the LTCH PPS are modeled after the outlier payment policies under the IPPS.

Economics, Hospital↗
PubMed1988

Effects of the Medicare prospective payment system on hospital cost containment: an early appraisal.

In 1983 federal efforts to contain hospital costs were coalesced under the Medicare prospective payment system (PPS)--a "self-interest" approach to administered prices. Diagnosis-related groups (DRGs) and the tougher peer review organizations (PROs) serve to define "products"; PPS sets the price on each. The effects of PPS go beyond Medicare; they have been system-wide. Differential impacts on hospital utilization, substitution of capital for labor, and quality are examined through a variety of data sources and descriptive as well as regression analyses. The greatest cost savings are attributed to a reduction in hospital admissions per capita.

Cost Control↗
PubMed1988

The early effect of Medicare's prospective payment system on the use of medical intensive care services in three community hospitals.

To assess the impact of Medicare's prospective payment system (PPS) on patient care and outcome from the medical intensive care unit (MICU), we reviewed the medical records of 400 MICU patients from three community hospitals: 200 patients were admitted before the PPS and 200 were admitted after the PPS. We sampled Medicare patients, aged 65 years and over, and non-Medicare comparison patients, aged 50 to 64 years, collecting data on case mix, treatment intensity and discharge disposition, hospital and six-month mortality, length of stay, and number of intensive care unit beds. After the PPS, the number of intensive care unit beds decreased 31%, without changes in MICU patients' illness severity or treatment intensity. Hospital length of stay decreased 15% in the Medicare group and 43% in the comparison group. For both Medicare and comparison patients combined, MICU length of stay decreased 14% and patients after the PPS were less likely to be discharged to go home. There were no significant changes in in-hospital or six-month mortality. Thus, clinically meaningful decreases in length of stay among seriously ill patients did not result in a change in in-hospital or six-month mortality.

Aged↗
PubMed1991

Medicare program: changes to the inpatient hospital prospective payment system and fiscal year 1992 rates; correction--HCFA. Final rule; correction.

In the August 30, 1991, issue of the Federal Register (FR Doc. 91-20778), (56 FR 43196), we revised the Medicare inpatient hospital prospective payment system and the amounts and factors necessary to determine prospective payment rates for Medicare inpatient hospital services. These changes are applicable to discharges occurring on or after October 1, 1991. This notice corrects errors made in that document.

Centers for Medicare and Medicaid Services, U.S.↗
PubMedDate not supplied

Evolution of the prospective payment system: implications for nursing.

Many changes have occurred in the financing and organization of health care services in recent years. Medicare's prospective payment system, a major financing innovation implemented by the federal government, is continuing to evolve in response to demands that costs be controlled while quality of care and access are ensured.

Delivery of Health Care↗
PubMed2002

The impact of the 1997 Balanced Budget Amendment's prospective payment system on patient case mix and rehabilitation utilization in skilled nursing.

PURPOSE: This study examines the impact of the post-acute prospective payment system (PPS) on Medicare-funded rehabilitation services in skilled nursing facilities (SNFs) and whether such impact varies under different payment mechanisms. DESIGN AND METHODS: We interviewed 214 Medicare beneficiaries admitted to three SNFs in southern California for rehabilitation. We compared patients' admission characteristics and therapy utilization among those receiving post-acute rehabilitation before and after the implementation of PPS. RESULTS: Patients admitted after PPS implementation were more likely to have orthopedic problems or stroke and poorer self-reported physical health. They had significantly shorter lengths of stay in rehabilitation and received significantly less therapy, although those in managed care had less reduction in treatment after SNF-PPS implementation than those in fee-for-service. IMPLICATIONS: After SNF-PPS implementation, rehabilitation treatment levels in the study sites were reduced. Whereas changes in Medicare managed care were comparatively modest, we observed significant changes in intensity and duration of physical and occupational therapies in Medicare fee-for-service.

Aged↗
PubMed2007

Did the Medicare inpatient rehabilitation facility prospective payment system result in changes in relative patient severity and relative resource use?

BACKGROUND: The Centers for Medicare and Medicaid Services implemented a prospective payment system (PPS) in 2002 for care provided by inpatient rehabilitation facilities (IRFs) to Medicare beneficiaries. OBJECTIVE: We sought to examine changes in the composition of Medicare beneficiaries in IRFs by examining the percentages of patients having worse functional or health status than the average for their payment groups (relative severity) and of patients having greater cost or longer length of stay than the average for their payment groups (relative resource use) before versus after IRF PPS; to examine whether observed changes in relative resource use were expected given predicted changes; and to explore whether these effects varied by IRF Medicare volume. METHODS: In an observational study of indicators of Medicare beneficiary relative severity and relative resource use, we studied cases paid for by Medicare during 1999 and 2002 having an acute care stay preceding their IRF stay (n = 363,542 in 1999 and 446,002 in 2002). RESULTS: Similar percentages of cases had longer than expected lengths of stay, greater-than-expected costs per case, and worse-than-expected functional status pre- versus post-IRF PPS. Cases under the IRF PPS had lower predicted probabilities of death 150 days after admission. Although predicted relative resource use remained steady, observed relative resource use decreased after IRF PPS. CONCLUSIONS: IRF patient composition has not changed meaningfully for Medicare beneficiaries, but patients within payment groups are being provided less care, which could be attributable to the IRF PPS, existing trends in decreasing length of stay, or both.

Aged↗
PubMed1987

Differences in resource use and cost among facilities treating alcohol, drug abuse, and mental disorders: implications for design of a prospective payment system.

Specialized psychiatric facilities, including qualified distinct-part units in general hospitals, are exempt from Medicare's diagnosis-related group prospective payment system (PPS). One major reason for continuing the exemption is the redistribution of revenue that would probably occur if a single national price were established for care at the diverse facilities that treat patients with psychiatric and substance abuse disorders. This study investigated the extent of such potential redistribution in a private health insurance data base and found that a PPS would systematically underpay specialized facilities and systematically overpay general hospitals without specialized units. Alternatives for addressing this problem are discussed.

Alcoholism↗
PubMed1988

The care of elderly patients with hip fracture. Changes since implementation of the prospective payment system.

We hypothesized that the care provided to elderly patients with hip fracture in community hospitals has changed since the implementation of prospective payment systems (PPS) in 1983. We reviewed records of elderly patients admitted with hip fracture to a large community hospital from 1981 to 1986. During that period, the mean length of hospitalization decreased (from 21.9 to 12.6 days; P less than 0.0001), inpatient physical therapy decreased (from 7.6 to 6.3 sessions; P less than 0.04), and the maximal distance walked before discharge fell (from 27 to 11 m [93 to 38 ft]; P less than 0.0001). Concomitantly, the proportion of patients discharged to nursing homes rose (from 38 to 60 percent; P less than 0.0001), as did the proportion remaining in nursing homes one year after hospitalization (from 9 to 33 percent; P less than 0.0001). Neither in-hospital mortality nor one-year mortality changed significantly. As compared with beneficiaries of conventional Medicare after the implementation of PPS, HMO enrollees had shorter hospitalizations (7.3 vs. 14.0 days; P less than 0.0001), received less physical therapy (3.5 vs. 7.1 sessions; P less than 0.0001), walked shorter distances at discharge (3 vs. 13 m [11 vs. 44 ft]; P less than 0.01), and were more frequently transferred to nursing homes (83 vs. 55 percent; P less than 0.01). One year later, however, fewer HMO patients remained in nursing homes (16 vs. 35 percent; P less than 0.07). We conclude that since the implementation of PPS, hospitals have reduced the amount of care given to patients with hip fracture and have shifted much of the rehabilitation burden to nursing homes. The increase in the number of such patients remaining in nursing homes one year after the fracture suggests that the overall quality of care for these patients may have deteriorated.

Aged↗
PubMed2006

Medicare program; changes to the hospital inpatient prospective payment systems and fiscal year 2007 rates; fiscal year 2007 occupational mix adjustment to wage index; health care infrastructure improvement program; selection criteria of loan program for qualifying hospitals engaged in cancer-related health care and forgiveness of indebtedness; and exclusion of vendor purchases made under the competitive acquisition program (CAP) for outpatient drugs and biologicals under part B for the purpose of calculating the average sales price (ASP). Final rules and interim final rule with comment period.

We are revising the Medicare hospital inpatient prospective payment systems (IPPS) for operating and capital-related costs to implement changes arising from our continuing experience with these systems, and to implement a number of changes made by the Deficit Reduction Act of 2005 (Pub. L. 109-171). 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. We also are setting forth rate-of-increase limits as well as policy changes for hospitals and hospital units excluded from the IPPS that are paid in full or in part on a reasonable cost basis subject to these limits. These changes are applicable to discharges occurring on or after October 1, 2006. In this final rule, we discuss public comments we received on our proposals to refine the diagnosis-related group (DRG) system under the IPPS to better recognize severity of illness among patients--to use a hospital-specific relative value (HSRV) cost center weighting methodology to adjust DRG relative weights; and to implement consolidated severity-adjusted DRGs or alternative severity adjustment methods. Among the other policy changes that we are making are those changes related to: limited revisions of the reclassification of cases to DRGs; the long-term care (LTC)-DRGs and relative weights; the wage data, including the occupational mix data, used to compute the wage index; applications for new technologies and medical services add-on payments; payments to hospitals for the direct and indirect costs of graduate medical education; submission of hospital quality data; payments to sole community hospitals and Medicare-dependent, small rural hospitals; and provisions governing emergency services under the Emergency Medical Treatment and Labor Act of 1986 (EMTALA). We are responding to requested public comments on a number of other issues that include performance-based hospital payments for services and health information technology, as well as how to improve health data transparency for consumers. In addition, we are responding to public comments received on a proposed rule issued in the Federal Register on May 17, 2006 that proposed to revise the methodology for calculating the occupational mix adjustment to the wage index for the FY 2007 hospital inpatient prospective payment system by applying an adjustment to 100 percent of the wage index using new 2006 occupational mix survey data collected from hospitals. We are finalizing two policy documents published in the Federal Register relating to the implementation of the Health Care Infrastructure Improvement Program, a hospital loan program for cancer research, established under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. This final rule also revises the definition of the term "unit" to specify the exclusion of units of drugs sold to approved Medicare Competitive Acquisition Program (CAP) vendors for use under the CAP from average sales price (ASP) calculations for a period of up to 3 years, at which time we will reevaluate our policy.

Diagnosis-Related Groups↗
PubMed2002

Changes in the status of hospitalized stroke patients since inception of the prospective payment system in 1983.

OBJECTIVE: To describe epidemiologically the changes in acute-care delivery services for stroke victims since the inception of the 1983 prospective payment system (PPS). DESIGN: A cross-sectional comparison of 2 acute-care hospitalized samples of stroke patients before and after implementation of PPS. SETTING: Fifteen acute-care hospitals. PARTICIPANTS: A total of 1992 stroke patients discharged from 15 acute care hospitals in 1995-1996 were compared with 1665 patients studied in the same geographic area in 1981-1982. INTERVENTIONS: Not applicable. MAIN OUTCOME MEASURES: Incidence rates, length of stay (LOS), discharge destinations, in-hospital transfers, and mortality. RESULTS: Incidence rates between the 2 time periods remained similar (1.13-1.14/1000). Major changes between 1981-1982 and 1995-1996 included reengineering of hospitals to establish subacute units with an increased use of rehabilitation units, a 63% decrease in acute hospital LOS, a 44% increase in discharges to long-term care facilities, a 39% decrease in mortality, and a 5% decrease in discharge to home. Age (avg, 71y), gender, and living arrangements confounded discharge destinations. Significantly more men in 1995-1996 had strokes at younger ages, but overall 53% were women. CONCLUSIONS: Institution of the PPS has dramatically influenced hospital LOS, location of treatment, and discharge destinations with no improvement in home discharges.

Adolescent↗
PubMed1994

Challenges for acute care geriatric inpatient units under the present Medicare prospective payment system.

The Mount Sinai Medical Center's Geriatric Evaluation and Treatment Unit (GETU) is a 16-bed acute care geriatric unit that operates under the Medicare Prospective Payment System (PPS) in an academic medical center environment. The Medicare PPS and the needs of our local health care system have played a considerable role in the development and operation of our inpatient acute care geriatric unit. The GETU provides acute geriatric care and geriatric assessment and is a site for education and clinical research. The GETU serves a targeted group of acutely ill, hospitalized frail elderly with complex, interdisciplinary needs. The multidisciplinary GETU team was financed from generally available and justifiable hospital resources. Geriatric assessment is conducted under the Medicare PPS during the process of acute care without prolonging hospital length of stay. In fact, during the past 6 years, the introduction of geriatric care and assessment programs has been associated with a significant reduction in hospital length of stay and hospital costs for this complex and difficult population. It is our experience that an acute care geriatric unit functioning under traditional Medical Prospective Payment can have the dual effect of enhancing care and reducing hospital costs for the hospitalized frail elderly.

Academic Medical Centers↗
PubMed2006

Effects of the DRG-based prospective payment system operated by the voluntarily participating providers on the cesarean section rates in Korea.

This study explored the effects of the diagnosis-related group (DRG)-based prospective payment system (PPS) operated by voluntarily participating organizations on the cesarean section (CS) rates, and analyzed whether the participating health care organizations had similar CS rates despite the varied participation periods. The study sample included delivery claims data from the Korean national health insurance program for the year 2003. Risk factors were identified and used in the adjustment model to distinguish the main reason for CS. Their risk-adjusted CS rates were compared by the reimbursement methods, and the organizations' internal and external environments were controlled. The final risk-adjustment model for the CS rates meets the criteria for an effective model. There were no significant differences of CS rates between providers in the DRG and fee-for-service system after controlling for organizational variables. The CS rates did not vary significantly depending on the providers' DRG participation periods. The results provide evidence that the DRG payment system operated by volunteering health care organizations had no impact on the CS rates, which can lower the quality of care. Although the providers joined the DRG system in different years, there were no differences in the CS rates among the DRG providers. These results support the future expansion of the DRG-based PPS plan to all health care services in Korea.

Adolescent↗