With this inaugural issue of the S-DRG Report I’d like to commend the industry for taking such a strong stand on CMS’ proposed enhancements to the Inpatient Prospective Payment System (IPPS) and emphasize the importance of public comment in the rule-making process. As CMS makes bona fide efforts to improve the system it is often not in touch with the day-to-day concerns and issues relative to operating within the regulatory environment that it creates.

The more than 2,300 comment letters sent to CMS regarding IPPS indicate that the agency struck a nerve among those within the industry. The sheer volume of letters demonstrate the industry’s strong sense of passion about care delivery and the business of health care.
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On Aug. 1, the Centers for Medicare & Medicaid Services (CMS) announced the details of its final rule regarding changes to the Inpatient Prospective Payment System (IPPS) for FY2007. Prior to the announcement, CMS received more than 2,100 comment letters from the industry, as well as 53 senators and 189 members of congress. To me, it’s clear that CMS carefully reviewed these comment letters because many of the recommendations have been incorporated into the final rule.

CMS clearly listened to the industry’s concerns and found ways to accommodate the diverse interests of numerous constituents. Additionally, I’m impressed with the way that the industry rallied to voice its concerns in a manner that had a significant impact on the development of government regulations. Your voices were heard and you made a difference!
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July 20, 2006 – I’m proud of the way the health care industry has rallied to voice its concerns about CMS’ proposed changes to the DRG system. To date, more than 1,800 pages of comment letters have been sent to CMS regarding its proposed rule: “Changes to the Hospital Inpatient Prospective Payment Systems and FY 2007 Rates.” Many of the comment letters that I have reviewed include lengthy and detailed explanations as to why the implementation of the CMS proposal needs further analysis and should be delayed.

To me, these thoughtful and carefully written comment letters demonstrate the depth of the industry’s concern and the magnitude of the proposed rule’s potential impact on the market place. Busy U.S. senators, hospital executives, state hospital associations, industry associations and software vendors made time within their hectic schedules to make sure their voices were heard on this issue. (A link to view the comments on the CMS site is listed below.) In fact, 53 senators and 189 congress people asked CMS to:
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May 19, 2006 -- After 23 years of supporting an open Diagnosis Related Group (DRG) architecture, CMS is proposing to revamp the system based on a proprietary methodology to implement severity-adjusted DRGs. While I applaud CMS’ decision to improve the DRG system, I disagree with many of the changes that CMS proposes and have advised CMS accordingly.

The most troubling component of the changes is CMS’ reliance on a derivative of the All Patient Refined Diagnosis Related Groups (APR-DRGs), a proprietary methodology owned by 3M Health Information Systems. (For background information on CMS’ proposed rule, click here to read one of my previous columns that discusses the details of the changes.)
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