Redesigning Medicare inpatient PPS to adjust payment for post-admission complications

Under the Medicare diagnosis-related group (DRG) based inpatient prospective payment system (IPPS), payments to hospitals can increase when a post-admission complication occurs. This article proposes a redesign of IPPS that reduces, but does not eliminate, the increase in payment due to post-admissi...

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Bibliographic Details
Published in:Health care financing review 2006-03, Vol.27 (3), p.83-93
Main Authors: Averill, Richard F, Vertrees, James C, McCullough, Elizabeth C, Hughes, John S, Goldfield, Norbert I
Format: Article
Language:English
Subjects:
Comorbidity
Cost reduction
Diagnosis related groups
DRGs
Health services
Hospital costs
Humans
Iatrogenic Disease
Inpatients
Management
Medical diagnosis
Medicare
Medicare - organization & administration
Monetary incentives
Mortality
Patient admissions
Patients
Pay for performance
Prospective Payment System
Prospective payment systems
Prospective payment systems (Medical care)
Quality standards
Reimbursement Mechanisms - organization & administration
Side effects
Studies
United States
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Description
Summary:Under the Medicare diagnosis-related group (DRG) based inpatient prospective payment system (IPPS), payments to hospitals can increase when a post-admission complication occurs. This article proposes a redesign of IPPS that reduces, but does not eliminate, the increase in payment due to post-admission complications. Using California data that contained a specification of whether each diagnosis was present at admission, and applying a conservative approach to identifying potentially preventable complications, the impact of post-admission complications on DRG assignment was determined. Based on the redesigned IPPS, the increase in Medicare payments due to post-admission complications was reduced by more than one billion dollars annually.
ISSN:0195-8631
1554-9887