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Medicare program; fiscal year 1987 changes to the inpatient hospital prospective payment system--HCFA. Final rule
Abstract:
This rule implements those portions of sections 9302 and 9303 of the Omnibus Budget Reconciliation Act of 1986 affecting fiscal year 1987 payments to prospective payment hospitals and hospitals excluded from the prospective payment system. The changes in the law affecting prospective payment hospitals concern the update factor; reductions in the standardized amounts to reflect differences in payment for outliers between urban and rural hospitals; revised rural referral center criteria; and reductions in payments for capital-related costs. For hospitals excluded from the prospective payment system, from the changes affect the rate-of-increase limits (target amounts).
Insights
This rule updates fiscal year 1987 hospital payments, affecting both prospective payment hospitals and those excluded from the system. Key changes include payment adjustments for outliers, rural referral centers, and capital costs.
Area of Science:
- Health Policy
- Healthcare Administration
- Medical Economics
Background:
- The Omnibus Budget Reconciliation Act of 1986 introduced significant changes to hospital payment structures.
- Fiscal year 1987 marked the implementation of these legislative adjustments.
- Understanding these changes is crucial for healthcare providers and financial managers.
Purpose of the Study:
- To detail the regulatory changes impacting hospital payments for fiscal year 1987.
- To outline specific modifications for hospitals under the prospective payment system.
- To describe adjustments for hospitals excluded from the prospective payment system.
Main Methods:
- Analysis of Sections 9302 and 9303 of the Omnibus Budget Reconciliation Act of 1986.
- Identification of affected payment components for prospective payment hospitals.
- Determination of changes to rate-of-increase limits for excluded hospitals.
Main Results:
- Adjustments to the update factor for prospective payment hospitals.
- Reductions in standardized amounts to account for urban-rural outlier payment differences.
- Revisions to rural referral center criteria and capital-related cost payments.
- Modifications to rate-of-increase limits (target amounts) for excluded hospitals.
Conclusions:
- The implemented rule signifies a comprehensive revision of Medicare payment policies for fiscal year 1987.
- These changes aim to standardize payments and address cost differences across various hospital types and locations.
- Hospitals must adapt to new financial parameters affecting both inpatient and capital expenditures.