Government
Hospitals blast Medicare payment rule
NEWS IN BRIEF — Posted Aug. 20, 2007
The Centers for Medicare & Medicaid Services released a final inpatient hospital payment rule for the next fiscal year that hospitals complain would cut their payments by more than $20 billion.
The final fiscal 2008 rule begins to phase in a restructured system of diagnosis-related groups, or DRGs, that adjust payments based on the severity of a patient's illness. Although the hospital community supports moving to a more accurate DRG system, it strongly opposes a provision in the rule that would prospectively reduce total payments based on anticipated improvements in hospital coding and documentation of illness severity.
"This misguided policy wrongly assumes major changes in how hospitals categorize patients for payment purposes, penalizing hospitals in advance based on a 'guess' by CMS," said Rich Umbdenstock, the American Hospital Assn. president and CEO.
CMS officials noted that even with the DRG offset, payments for hospitals next fiscal year are expected to increase by an average of 3.5%.
Note: This item originally appeared at http://www.ama-assn.org/amednews/2007/08/20/gvbf0820.htm.
