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Hospitals may struggle to comply with DRG increase

Case Management Weekly, August 24, 2005

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Hospitals can expect to work harder than before to comply with the Centers for Medicare & Medicaid Services' (CMS) post-acute care transfer payment policy. According to the final 2006 Medicare inpatient prospective payment system (IPPS) regulation-which goes into effect on Oct. 1-hospitals must check compliance with 182 diagnosis-related groups (DRG), a jump from the current 29 DRGs. (DRGs dictate the payment rates a hospital can receive for services provided.) Under the policy, hospitals receive partial payment of certain DRGs for discharging patients to post-acute care facilities, (e.g., skilled nursing facilities). The new regulation's enactment comes after widespread noncompliance of the current policy was discovered by Medicare auditors. CMS is trying to keep Medicare from paying hospitals twice for the same care. For example, Medicare may pay the hospital's DRG for care given, and then the post-acute facility may receive payment as well. CMS predicts Medicare will save $780 million dollars by adding 153 DRGs for hospitals to comply with.

For more information about the DRG changes, click here.

Source: Report on Medicare Compliance

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