Health Information Management

PPV: CMS proposes to switch to MS-DRGs in 2008

HIM-HIPAA Insider, May 21, 2007

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In its proposed rule updating the hospital inpatient prospective payment system (IPPS) for fiscal year 2008, CMS proposed to adopt a severity-adjusted DRG system called Medicare-Severity DRGs (MS-DRG). The April 13 proposal creates 745 new DRGs to replace the current 538. According to CMS, the reforms are measured steps to improve the accuracy of Medicare's payment for inpatient stays and better account for the severity of patients' conditions.

The new system will increase payments for some cases, while decreasing payments for others. Hospitals treating more severely ill and costlier patients will receive higher payments, but hospitals treating less severely ill patients will see a decline in reimbursements. Many agree that the proposed changes are positive steps.

To read more about the proposed MS-DRGs, click here. Subscribers to Medical Records Briefing can sign-on for access.

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