ProPAC's recommendations: refinements, not major changes

The 21 recommendations in the Prospective Payment Assessment Commission's (ProPAC's) first report are consolidated under seven topics: update factor; hospital market basket; discretionary adjustment factor; area wage index; disproportionate-share hospitals; standardized amounts; and DRG classifications and weights. The key recommendations include: Increase rates by roughly 1 percent to 3 percent for fiscal year 1986 (this is inconsistent with the Reagan administration's proposal to freeze 1986 rates at the 1985 levels); Use a single market basket in fiscal year 1986 (although ProPAC also will examine the appropriateness of developing market baskets for different regions and classes of hospitals within regions); Revise the discretionary adjustment factor to reflect real changes in case mix; redefine labor market areas to reflect geographically based variations in wages paid to hospital workers (inner city, suburban, and rural); recalibrate DRG weights for 1986.