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IPPS final rule includes severity of illness reimbursement plan

Case Management Weekly, September 13, 2006

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IPPS final rule includes severity of illness reimbursement plan

The severity of illness part of the Inpatient Prospective Payment System (IPPS) final rule includes a two-year period for implementing severity as a basis for payment. The final rule

• adds 20 new groups to the existing DRG system
• eliminates eight DRGs
• raises the total number of DRGs to 538 from the current 526
• modifies 32 existing DRGs

These changes, which take effect October 1, will allow case managers and coders to better capture the severity of patients' illnesses and promote equitable reimbursement of more severe conditions.

Note that this change differs considerably from that described in the April IPPS proposed rule. CMS had initially proposed to adopt a consolidated severity-adjusted system (CSA-DRGs), possibly as early as 2007. The CSA-DRG system was based on a product developed by 3M Health Information Systems and included 861 DRGs.

Source:Adapted from Patient Financial Services, HCPro, Inc.

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