Even as hospital executives push Congress for higher Medicare reimbursement, Medicare inpatient payment rates will rise 1.1% beginning Oct. 1 under final regulations HCFA published late last week.
The American Hospital Association estimated that the increase will translate into $700 million in additional Medicare payments for hospitals next year.
The update for fiscal 2000 will be 0.2 percentage points greater than projections in a proposed rule released in May.
The change results from an adjustment in HCFA's forecast of the hospital inflation index for fiscal 2000 from 2.7% to 2.9%. Under the provisions of the Balanced Budget Act of 1997, hospital payment updates must be 1.8 percentage points less than the hospital inflation index.
The regulations also revise a proposal that would have rescinded cost-based payments for "hospital-within-hospital" long-term-care units that transfer more than 5% of their patients back to the host acute-care hospital.
HCFA said hospitals were trying to maximize profits by taking advantage of the differences between the cost-based payments to long-term-care units and the prospective payments to acute-care hospitals.
Under the final regulation, HCFA will not automatically declare the long-term-care unit ineligible for cost-based payments if it exceeds the 5% cap. But by exceeding the cap, the long-term-care unit can be denied payment for the initial hospitalization in cases in which the host acute-care hospital transfers the patient to the long-term-care unit a second time.