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New CMS Healthcare Finance Rules for Fiscal 2008
By Dr. David Edward Marcinko; MBA, CMP™
Publisher-in-Chief
The Centers for Medicare & Medicaid Services (CMS) just released the final Inpatient Prospective Payment System [IPPS] rules for fiscal year 2008. The lengthy official version was published in the Federal Register on August 22, 2007.
The good news is that overall Medicare payments to hospitals should increase by an average of 3.5%. The bad news is a plethora of additional compliance regulations.
A Brief Review
And so, since it has been said that brevity is the surest route to perusal, the most important of these new payment and policy provisions include:
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A 3.3% market basket increase
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Additional hospital quality measure reporting requirements in 2008 in order to qualify for the full market basket update in FY 2009
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Final implementation of phase-in changes begun in FY 2007 to base DRG relative weights on estimated hospital costs rather than hospital charges
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A high cost outlier threshold of $22,650, down from $24,485 in FY 2007
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The launch of 745 new Medicare-Severity DRGs (MS-DRGs) which replace the current 538 DRGs over a two-year period; and “behavioral-offsets” reduce payments by 1.2% to account for expected coding change practices
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Require hospitals to report on eight preventable admission conditions that would not be paid at a higher rate unless present on admission in 2009
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New ownership disclosure requirements for physician-owned specialty hospitals (Stark III)
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New hospital disclosures requirements on how to handle emergency medical situations when no physician is present.
Enter the MS-DRGs
Perhaps the biggest changes relate to the revisions of certain long-term care hospital policies, including the transition to the MS-DRG system over two years, refinements to the relative weights for the DRGs, and application of a budget neutrality factor to the annual rate update (but not the “behavioral- offset” that will apply to acute hospital payments).
Assessment
Therefore, let all related information in our two-volume print subscription publication Healthcare Organizations: [Financial Management Strategies] guide your leadership decisions with alacrity.
Conclusion
How will the above new rules and regulations affect you and/or your healthcare institution? Your cogent thoughts, and informed opinions, are always appreciated.
Speaker: If you need a moderator or a speaker for an upcoming event, Dr. David Edward Marcinko; MBA – Editor and Publisher-in-Chief – is available for speaking engagements.
Contact him at: MarcinkoAdvisors@msn.com
Bio: http://www.stpub.com/pubs/authors/MARCINKO.htm
Order the Premium Print Guide: http://www.stpub.com/pubs/ho.htmThe subscription print guide includes up to four annual quarterly updates. Now, enjoy a 30-day risk-free trial as a two-volume guide in a unique loose-leaf binder format. Special introductory price: $525/yr. Call 1-800-251-0381. More information: www.stpub.com/pubs/ho.htmTo email purchase: email: orders@stpub.com
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Filed under: Healthcare Finance | Tagged: Health Care Finance |
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Medicare Spending and Satisfaction
Did you know that variations in regional Medicare spending do not affect beneficiaries’ perceptions of care, according to a new study in the Journal of the American Medical Association [JAMA]?
Medicare spending differences – which ranged from an annual average of $12,000 for a beneficiary in Miami, to $5,700 for one in Minneapolis – were not linked to beneficiary satisfaction, according to Jonathan Skinner, co-author of the study and Dartmouth College economist, via the American Health Line.
Is this a modification of the Arthur Laffer Curve; the economic concept that throwing more money at a problem does not necessarily fix it [i.e., law of diminishing returns]?
Your thoughts are appreciated.
-Staff Reporters
Executive-Post
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