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Regulation No.
CMS-1488
Title
IPPS Annual Proposed and Final Rules, and Relevant Correction Notices: Fiscal Year 2007
Display Date
N/A
Year
2007
Publication Date
N/A
Description
Changes to the Hospital Inpatient Prospective Payment Systems and Fiscal Year 2007 Rates; Proposed, Final, and Relevant Correction Notices

1. Proposed Rule CMS-1488-P

Title: Medicare Program; Proposed Changes to the Hospital Inpatient Prospective Payment Systems and Fiscal Year 2007 Rates; Proposed Rule

Publication Date: 04/25/2006

Description: We are proposing to revise the Medicare hospital inpatient prospective payment systems (IPPS) for operating and capital-related costs to implement changes arising from our continuing experience with these systems, and to implement a number of changes made by the Deficit Reduction Act of 2005 (Pub. L. 109-171). In addition, in the Addendum to this proposed rule, we describe the proposed changes to the amounts and factors used to determine the rates for Medicare hospital inpatient services for operating costs and capital-related costs. We also are setting forth proposed rate-of-increase limits as well as proposed policy changes for hospitals and hospital units excluded from the IPPS that are paid in full or in part on a reasonable cost basis subject to these limits. These proposed changes would be applicable to discharges occurring on or after October 1, 2006.

In this proposed rule, we discuss our proposals to refine the diagnosis-related group (DRG) system under the IPPS to better recognize severity of illness among patients--for FY 2007, we are proposing to use a hospital-specific relative value cost center weighting methodology to adjust DRG relative weights and in FY 2008 (if not earlier), to implement consolidated severity-adjusted DRGs or alternative severity adjustment methods.

Among the other policy changes that we are proposing to make are changes related to: limited revisions of the reclassification of cases to DRGs; the long-term care (LTC)-DRGs and relative weights; the wage data, including the occupational mix data, used to compute the wage index; applications for new technologies and medical services add-on payments; payments to hospitals for the direct and indirect costs of graduate medical education; submission of hospital quality data; payments to sole community hospitals and Medicare-dependent, small rural hospitals; and provisions governing emergency services under the Emergency Medical Treatment and Labor Act of 1986 (EMTALA). We are also inviting comments on a number of issues including performance-based hospital payments for services and health information technology, as well as how to improve data transparency for consumers.


2. Update (Second) to the April Proposed Rule CMS-1488-P2

Title: Medicare Program; Hospital Inpatient Prospective Payment Systems Implementation of the Fiscal Year 2007 Occupational Mix Adjustment to the Wage Index

Publication Date: 05/17/2006

Description: This proposed rule would revise the methodology for calculating the occupational mix adjustment announced in the Fiscal Year (FY) 2007 Hospital Inpatient Prospective Payment System (IPPS) proposed rule by applying the occupational mix adjustment to 100 percent of the wage index using the new occupational mix data collected from hospitals. This proposed rule also proposes to modify hospitals' procedures for withdrawing requests to reclassify for the FY 2007 wage index and for supplementing the FY 2008 reclassification application with official data used to develop the FY 2007 wage index. In addition, we are proposing to replace in full the descriptions of the data and methodology that would be used in calculating the occupational mix adjustment discussed in the FY 2007 IPPS proposed rule.


3. Final Rule CMS-1488-F

Title: Medicare Program; Changes to the Hospital Inpatient Prospective Payment Systems and Fiscal Year 2007 Rates; Fiscal Year 2007 Occupational Mix Adjustment to Wage Index; Health Care Infrastructure Improvement Program; Selection Criteria of Loan Program for Qualifying Hospitals Engaged in Cancer-Related Health Care and Forgiveness of Indebtedness; and Exclusion of Vendor Purchases Made Under the Competitive Acquisition Program (CAP) for Outpatient Drugs and Biologicals Under Part B for the Purpose of Calculating the Average Sales Price (ASP)

Publication Date: 08/18/2006

Description: We are revising the Medicare hospital inpatient prospective payment systems (IPPS) for operating and capital-related costs to implement changes arising from our continuing experience with these systems, and to implement a number of changes made by the Deficit Reduction Act of 2005 (Pub. L. 109-171). In addition, in the Addendum to this final rule, we describe the changes to the amounts and factors used to determine the rates for Medicare hospital inpatient services for operating costs and capital-related costs. We also are setting forth rate-of-increase limits as well as policy changes for hospitals and hospital units excluded from the IPPS that are paid in full or in part on a reasonable cost basis subject to these limits. These changes are applicable to discharges occurring on or after October 1, 2006.

In this final rule, we discuss public comments we received on our proposals to refine the diagnosis-related group (DRG) system under the IPPS to better recognize severity of illness among patients--to use a hospital-specific relative value (HSRV) cost center weighting methodology to adjust DRG relative weights; and to implement consolidated severity-adjusted DRGs or alternative severity adjustment methods.

Among the other policy changes that we are making are those changes related to: limited revisions of the reclassification of cases to DRGs; the long-term care (LTC)-DRGs and relative weights; the wage data, including the occupational mix data, used to compute the wage index; applications for new technologies and medical services add-on payments; payments to hospitals for the direct and indirect costs of graduate medical education; submission of hospital quality data; payments to sole community hospitals and Medicare-dependent, small rural hospitals; and provisions governing emergency services under the Emergency Medical Treatment and Labor Act of 1986 (EMTALA).

We are responding to requested public comments on a number of other issues that include performance-based hospital payments for services and health information technology, as well as how to improve health data transparency for consumers.

In addition, we are responding to public comments received on a proposed rule issued in the Federal Register on May 17, 2006 that proposed to revise the methodology for calculating the occupational mix adjustment to the wage index for the FY 2007 hospital inpatient prospective payment system by applying an adjustment to 100 percent of the wage index using new 2006 occupational mix survey data collected from hospitals.

We are finalizing two policy documents published in the Federal Register relating to the implementation of the Health Care Infrastructure Improvement Program, a hospital loan program for cancer research, established under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.

This final rule also revises the definition of the term ``unit'' to specify the exclusion of units of drugs sold to approved Medicare Competitive Acquisition Program (CAP) vendors for use under the CAP from average sales price (ASP) calculations for a period of up to 3 years, at which time we will reevaluate our policy.


4. Correction Notice CMS-1488-CN

Title: Medicare Program; Changes to the Hospital Inpatient Prospective Payment Systems and Fiscal Year 2007 Rates; Correction

Publication Date: 10/03/2006

Description: This document corrects technical errors that appeared in the final rule published in the Federal Register on August 18, 2006 entitled ``Medicare Program; Hospital Inpatient Prospective Payment Systems and Fiscal Year 2007 Rates.''


5. Notice CMS-1488-N

Title: Medicare Program; Hospital Inpatient Prospective Payment Systems and Fiscal Year 2007 Rates: Final Fiscal Year 2007 Wage Indices and Payment Rates After Application of Revised Occupational Mix Adjustment to Wage Index

Publication Date: 10/11/2006

Description: This notice contains tables listing the final occupational mix adjusted wage indices, hospital reclassifications, payment rates, impacts, and other related tables as a result of the application of the occupational mix adjustment to 100 percent of the wage index effective for fiscal year (FY) 2007.


6. Correction Notice CMS-1488-CN2

Title: Medicare Program; Changes to the Hospital Inpatient Prospective Payment Systems and Fiscal Year 2007 Rates; Final Fiscal Year 2007 Wage Indices and Payment Rates After Application of Revised Occupational Mix Adjustment to the Wage Index; Corrections

Publication Date: 10/11/2006

Description: This document corrects wage index and technical errors that appeared in the notice published in the Federal Register on October 11, 2006 entitled ``Medicare Program; Hospital Inpatient Prospective Payment Systems and Fiscal Year 2007 Rates.