Revenue Cycle

CMS adjusts payment policy for replacement devices in IPPS proposed rule

Recovery Auditor Report, June 2, 2011

Editor's note: This article is the second in a series of three IPPS-related updates. The first can be found here.

As previously stated, the April 19 inpatient prospective payment system (IPPS) proposed rule contains an abundance of notable clarifications and updates that will affect multiple departments. Of these proposals, CMS’ clarification on payment for recalled and replaced devices stand out as one of the most significant for providers.

The 2008 IPPS rule implemented a policy that reduced a hospital’s IPPS payment for certain MS-DRGs where the implantation of a device that had been recalled determined the base MS-DRG assignment for that procedure. At that time, CMS stated it would “reduce a hospital’s IPPS payment for those MS-DRGs where the hospital received a credit equal to 50% or more of the cost of the device when a manufacturer provided a credit for a recalled device”.

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