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Medicare News
Medicare Proposes Adjusting Hospital Payments Based
on Severity of Illness
Specialty hospitals are a particular focus of the
proposal
April 16, 2007 -
CMS on
Friday announced a proposed rule that would increase the Medicare
inpatient reimbursement rate for hospitals that report data on quality
of care to the agency and base payments on the severity of
beneficiaries' illnesses,
CQ HealthBeat
reports.
The 3,500 acute care facilities affected by the
proposal would receive an additional $3.3 billion, according to CQ
HealthBeat. The 1,204-page proposal would continue steps started two
years ago to pay higher reimbursements to hospitals that treat sicker
patients, including creating 745 new, severity-adjusted
diagnosis-related groups, or DRGs.
Severity adjustment is designed to eliminate
hospitals' practice of "cherry-pick[ing]" healthier patients, CQ
HealthBeat reports. The proposal also would continue phasing in the
practice of reimbursing hospitals based on the actual cost of services
rather than what a facility charges. Initially, two-thirds of a DRG
reimbursement would be based on actual costs and one-third would be
based on the facility's charges. Starting in 2009, 100% of hospital
reimbursements would be based on actual costs.
Specialty Hospitals
According to CQ HealthBeat, specialty hospitals
"are a particular focus of the proposal, both in terms of their payments
and in terms of alerting the public about potential safety and
conflict-of-interest concerns patients might have about the facilities."
The proposal would create new disclosure
requirements for specialty hospitals, including providing patients with
a list of physicians who own the facilities. A physician/owner who
refers patients to his or her specialty hospital would be required to
notify them about his or her investment.
Patients also would be notified in writing if a
specialty hospital did not have a doctor at the facility at all hours
and how the facility planned to meet medical needs in case of emergency.
In addition, the proposal would increase to 32 the number of
quality-reporting measures hospitals must meet to receive the full 3.3%
reimbursement increase; prevent facilities from receiving full
reimbursements for treating preventable complications, such as
infections; and change reimbursements for recalled and replaced medical
devices (Reichard, CQ HealthBeat, 4/13).
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