CMS issues final reimbursement rules

CMS recently issued final rules on payment for inpatient hospital services and inpatient rehabilitation facilities.


CMS recently issued final rules on payment for inpatient hospital services and inpatient rehabilitation facilities.

On Aug. 1, CMS announced payments to hospitals in fiscal year 2008 would increase by about 3.5%. CMS would also begin to adjust payments by illness severity, with 745 new diagnosis-related groups (DRGs) replacing the 538 current DRGs. As a result, hospitals caring for sicker patients will receive higher payments than those whose patients are less sick. The DRG changes will be phased in over two years.

Photo by Comstock Complete
Photo by Comstock Complete

Under the new rule, as of Oct. 1, 2007, CMS will require hospitals to report “secondary diagnoses,” or diagnoses that develop after hospital admission, of eight specific conditions, including hospital-acquired infections. The conditions are catheter-associated urinary tract infection, pressure ulcers, objects left in a patient after surgery, air embolism, blood incompatibility, vascular catheter-associated infection, mediastinitis after coronary artery bypass grafting and hospital-acquired injuries (e.g., burns or fractures). CMS will stop paying hospitals a higher rate for secondary diagnoses of these conditions beginning Oct. 1, 2008. CMS is also considering adding other conditions, such as ventilator-associated pneumonia, to the list.

The new rule also requires that physician-owners of specialty hospitals inform referred patients of their ownership. Hospitals must also notify patients in writing if a medical doctor is not on site at all times, as well as provide a plan for dealing with emergencies that occur while a doctor is unavailable.

CMS also announced on July 31 that payments to inpatient rehabilitation facilities would increase by 3.2% in fiscal year 2008 and that the high-cost outlier threshold would increase from $5,534 to $7,362. CMS will also keep in place the “75% rule,” the method by which it currently determines whether a facility can be classified as an inpatient rehabilitation facility. In addition, as of July 1, 2008, facilities will no longer be permitted to include patients' comorbid conditions when calculating adherence to the 75% rule.