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Impact Of New Medicare Insurance Reimbursement Regulations

Armen Hareyan's picture

The Centers for Medicare and Medicaid Services (CMS) has issued the most sweeping rule changes for hospital reimbursement since 1983. The new regulations, which affect acute care hospitals nationwide, go into effect October 1, 2007, and will have significant impact on how hospitals are reimbursed for in-patient services (IPPS), according to recently completed studies by American Hospital Directory.

Under the regulations, there will be redistributions of reimbursement among some medical services and among certain types of hospitals. These changes are caused primarily by a new severity-adjusted DRG system and transition to a new weighting methodology used by CMS to set relative weights for payment.

"We just completed a series of studies that calculate the impact of the CMS regulations on hospital reimbursement based on detailed, claim level data," says Paul Shoemaker, president and CEO of American Hospital Directory. "Our studies indicate that small and rural hospitals and hospitals specializing in cardiac care will be negatively impacted by the new rules. We also noted that teaching hospitals will realize an increase in base payments but will see reduced outlier payments under the new MS-DRGs.

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Despite the extensive changes, many hospital administrators and healthcare executives do not yet have a clear understanding of how the new regulations will impact their hospital operations.

American Hospital Directory (www.ahd.com) has posted the studies on their website where they can be linked from the home page Custom data services are also available for analyzing impacts on particular operations, transfers to other facilities, outlier payment for costly cases, and other components of reimbursement.

"Having timely access to this information is critically important for understanding operational impact," according to Leatrice Ford, CEO of ConsultCare Partners. "Knowing what the numbers are by each hospital gives a good indication of budget and operational areas to adjust going into 2008."

Used with permission from the American Hospital Directory



Due to the latest reform a number of hospital groups sue as their Medical and Medicare payments are falling. Does this make sense to anyone? Now there is a new legislation, which requires equal health insurance reimbursement for private practices. Representative Ellen Brandom is sponsoring Missouri House Bill (HB) 318, while Senator Kurt Schaefer is sponsoring Missouri Senate Bill (SB) 318. HB 318 was incorporated into Representative Chris Molendorp’s omnibus bill, HB 669, which was voted “do pass” in an Executive Session and referred to the Rules Committee for consideration to be debated by a full House. As of the last day of session, the Senate had not taken up SB 148.