CMS has posted revised versions of its inpatient base rates. These newest revisions correct errors the agency made in its Oct 2nd changes.

These just published rates are in response to President Bush’s signing of the "TMA, Abstinence Education, and QI Programs Extension Act of 2007," which changed the MS-DRG documentation and coding adjustment from –1.2 percent to –0.6 percent for FY2008. According to CMS:
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According to first-hand reports I have received, a handful of commercial payers will begin using MS-DRGs for discharges on or after Oct. 1 to reimburse providers for non-Medicare business.

One challenge for commercial payers using MS-DRGs is that the new reimbursement system does not have pediatric break-outs (patients age 0-17, and mother/baby). Most of the payers that plan to switch to MS-DRGs are reimbursing providers with newborn and maternity cases under fixed or per-diem rates. For the pediatric cases the providers are being reimbursed under MS-DRGs. Check out a previous post on the impact of this issue.
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The October 2007 issue of Physician’s News Digest featured an interesting interview concerning MS-DRGs with Don May, the vice president for policy at the American Hospital Association (AHA).

In the interview, May reiterates AHA’s position on the behavioral offset and the association’s initial recommendation to CMS that the implementation of MS-DRGs take place over a four-year period. In essence, May said that CMS is moving much too quickly on MS-DRGs for the industry to adjust:
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A new blog launched in August by a clinical documentation specialist provides an often humorous perspective on one hospital’s transition to MS-DRGs. In one of the posts on the blog, called Clinical Documentation, the author details her preparations to develop and deliver a presentation to the physician staff about POA documentation requirements:

Although invitations were sent to the medical staff, lunch and breakfast provided, not one physician showed up. Surprised? Well, I wasn't. Not really. After all, what's in it for them?

One recent post recounts the numerous challenges that the department encountered during the first week of MS-DRGs, such as increased physician queries and dealing with POA requirements.
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Hospitals with the best coding practices are more likely to successfully transition to MS-DRGs, according to an Ingenix Innovations article published this week. The article focuses on the fourth annual "Top 200 Coding Hospitals" report from Ingenix that was released this week at the American Health Information Management Association (AHIMA) Convention and Exhibition in Philadelphia.

The following are excerpts from the article that quote Steve Greenberg, Ingenix senior vice president, Provider Solutions Group:
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CMS has told its fiscal intermediaries (FIs) to hold all inpatient hospital and long-term care claims, with discharge dates of Oct. 1 or later, until the release of its 2008 Pricer, which is scheduled for Oct. 15, 2007. This applies to all claims processed under the Inpatient Prospective Payment System (IPPS) and the Long-Term Care Hospital Prospective Payment System (LTCH PPS). This guidance was communicated via CMS Joint Signature Memorandum 07548 (JSM-07548) on Sept. 28, 2007.

Effective Oct. 1, 2007, all hospital claims processed under the IPPS, with discharge dates on or after October 1, 2007, are being held in location S/MSPR1 with reason code 37150. All LTCH claims processed under the LTCH PPS, with discharge dates on or after Oct. 1, 2007, are being held in location S/MSPRL with reason code 37167. Once CMS notifies FIs to stop the temporary holding, the suspended claims will be released for payment.
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The Bill that President Bush signed into law on Sept. 29 to reduce first-year base-rate cuts has resulted in CMS issuing another correction to IPPS Final Rule. Confused? Here’s a timeline of events to help explain:

 
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On October 2, CMS published a notice last week to correct errors in the FY2008 IPPS Final Rule. The errors resulted from a mistake in the calculation of hospital-specific rates for sole community and Medicare dependent hospitals. Changing these rates affected the budget neutrality factors, which are used to derive other variables. As a result of this error, CMS was forced to recalculate the standardized amounts, the outlier threshold, the waged indices, and other variables used for IPPS reimbursement.

The correction notice includes the following revisions:
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On Oct. 1, The Office of Inspector General (OIG) released its Work Plan for Fiscal Year 2008. On an annual basis, OIG conducts a comprehensive work-planning process to identify the areas most worthy of attention in the coming year. This year's Work Plan includes an increased focus on many of the changes that CMS implemented in its FY2008 IPPS Final Rule, including:

• Medical capital payments
• Adjustments for graduate medical education payments
• Inpatient prospective payment system wage indices
• Inpatient hospital payments for new technologies
• Medicare disproportionate share payments
• Patient care and safety in physician-owned specialty hospitals

In addition, the Work Plan states that OIG will increase its focus on "never events:"
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The Senate voted unanimously yesterday to pass a bill that would reduce Medicare's base rate cuts by half.

The bill, which passed the House on Wednesday, would slim Medicare's planned base rate cuts by half in fiscal years 2008 and 2009. Instead of cutting rates by 1.2 percent in FY2008 and 1.8 percent in FY2009, the rates would be cut by 0.6 percent and 0.9 percent respectively.
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