A final rule issued by the CMS will increase total Medicare reimbursement by an estimated 3.5% for inpatient hospital services in fiscal 2008 and includes 745 new DRGs to more accurately account for patient severity.
The DRGs would be phased in over two years. To compensate for upcoding that the CMS expects hospitals will engage in as the new DRG system is implemented, the final rule adopts a negative 1.2% payment adjustment for fiscal 2008.
The CMS in the final rule indicated that additional adjustments in future years would be needed to maintain budget neutrality, based on estimates by MedPAC and the CMS Office of the Actuary.
The agency is continuing its transition to adopt cost-based weights.
In other provisions, the final rule would ensure that Medicare no longer pays for the additional costs of certain preventable conditions acquired in the hospital.
The program would also reduce payments when a hospital replaces a device that it acquires at no or reduced cost. The rule also expands its list of publicly reported quality measures for hospitals and creates new disclosure requirements for specialty hospitals. Additional information about the rule is available here. -- by Jennifer Lubell
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