Federal lawmakers have agreed in principle to thwart a behavioral offset that was
included in the inpatient prospective payment system and set to go into effect Oct. 1. The legislation was approved today in the House and was expected to be approved quickly in the Senate, as well.
The American Hospital Association, which has pressed hard to have the cut reversed, estimated that if implemented, the offset would trim some $20 billion in Medicare hospital payments over five years.
In an eleventh-hour legislative package that has been purposely crafted to skirt
controversy that could delay its passage, the cuts are halved in 2008 and 2009, to 0.6%
and 0.9%, respectively. The 1.8% cut slated for 2010 is still on the table, however. The
measure would instead restore about $9.5 billion over those years.
The CMS called for the offset based on the assumption that hospitals would upcode as its
new system of Medicare severity DRGs is implemented. As a result, the agency called for
reductions of 1.2%, 1.8% and another 1.8% over the next three years.
Were very pleased that Congress is addressing this issue, Richard Pollack, executive
vice president of advocacy and public policy at the AHA, said in an interview.
However, its only a partial fix to the problem and we hope that they will consider
further adjustments in the future. -- by Matthew
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