The CMS proposal to introduce an expanded system for evaluating patient severity will cut industry payments by nearly $25 billion over five years, the American Hospital Association reported in a new projection.
The CMS in its fiscal 2008 proposed rule on inpatient hospital services unveiled plans to create 745 new severity-adjusted diagnosis-related groups to replace the existing 538 DRGs, in an effort to add more predictability and fairness to the inpatient payment system. Yet, the agency is proposing a 2.4% back door cut to eliminate what it claims will be the effect of greater use of coding for complications and co-morbidities as hospitals move to the new system, the AHA reported.
The rule proposed by CMS fails to put patients first, said Richard Umbdenstock, AHA president. Cutting payments for services for Americas seniors will put in jeopardy hospitals ability to care not only for Medicare patients but also for anyone who comes through the doors.
The AHA decried another proposal to eliminate certain capital-related cost provisions for urban hospitalsmoney that is used to purchase high-tech equipment such as MRI and CT scanners as well as updating facilities and information systems. All told, proposed cuts to capital payments will reach nearly $1 billion over the next five years, the AHA stated. -- by Jennifer Lubell