Final Medicare payment update for '99 announced
Final Medicare payment update for '99 announced
HCFA cuts swing beds from transfer provision
The final Medicare payment update for hospitals under the inpatient prospective payment system (PPS) will be 0.5% for fiscal year (FY) 1999, according to the rule published in the Federal Register on July 31.1 Also, the rule eliminated swing beds from the definition of acute care hospital transfers.
The update applies to the approximately 5,200 acute care hospitals participating in the prospective payment system. After the update is reduced by the adjustments for DRG changes and new wage data, the net patient update will be 0.26%. In addition, the federal capital payment rate will increase 1.76% to $378.05, and the update for sole community hospitals will be 0.5%.
The market basket for PPS-exempt hospitals and units was estimated at 2.4%, and exempt facilities' 1999 payment updates will range from 0% to 2.4%.
Say goodbye to swing beds
In a move that will catch the attention of many hospitals, the rule removed the use of swing beds, which are used for both inpatient and skilled nursing care, from the definition of transfer expanded by the Balanced Budget Act (BBA) of 1997.
Now, any patient discharged from a prospective payment hospital who is classified in one of 10 post-acute DRGs (see DRG chart, p. 132) and who is admitted to a rehabilitation or skilled-nursing facility on the date of discharge, or to the care of home health services within three days of discharge, is considered a transfer. Under this payment system, the discharge must take place on or after Oct. 1, 1998.
Transfer cases are paid at twice the per diem for the first day and the per diem for each subsequent day, up to the full DRG amount. That means hospitals will receive lower payments for patients in these DRGs if the length of stay is shorter than the national average.
In the rule, the Health Care Financing Administration (HCFA) in Baltimore uses a different payment method for DRGs 209, 210, and 211. These DRGs will be paid based on 50% of the DRG payment for the first day of the stay and 50% of the per diem for the remaining days of the stay, up to the full DRG amount.
In other actions, HCFA made two changes to the wage index. Contract physician Part A costs will now be included in the wage index calculations. Intermediaries also must separate out any teaching physician costs, so the data can be reviewed by HCFA. It also removed the overhead costs associated with excluded providers such as skilled nursing or rehabilitation units.
Other regulatory news
In other recent regulatory actions, HCFA proposed a new system of records - the National Provider System. Published in the July 28, 1998, Federal Register,2 the regulations propose that the systems include data on both institutional (such as hospitals) and individually identifiable providers (such as physicians).
The system contains a unique identifier for each health care provider - known as the National Provider Identifier (NPI) - along with other information about the provider, including names, demographic information, educational/professional data, and business address data. (The establishment of a standard for an NPI is mandated by the Health Insurance Portability and Account-ability Act of 1996.)
The system will not become operational until the NPI final rule is published and the system is in full compliance with the requirements of this final rule.
Additional Medicare benefits
Further, last month Hospital Payment & Information Management reported on regulations ordered by the Clinton administration regarding additional protections for Medicare+Choice program beneficiaries. The rules included a section discussing enrollee medical records privacy. (See HPIM, August 1998, p. 117.)
Although the regulations received a lot of media attention, the American Hospital Association (AHA) in Chicago is waiting for more comprehensive legislation to pass in the future. "I don't actually think the rules that are in the Medicare+ regs will change things too much. They are very general," says Karen Milgate, AHA's senior associate director for policy development in the Washington, DC, office.
"One or another of the more comprehensive proposals on the Hill is expected to pass in the next year or so. I see the language in the Medicare+ regs as just a place holder to make sure there is some place to put it when the final legislation comes down," she adds.
References
1. 63 Fed Reg 40,953 (July 31, 1998).
2. 63 Fed Reg 40,297 (July 28, 1998).
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