HCFA’s proposed changes to Medicare DRGs at most anticlimactic
Tweaking codes attempts to keep up with new technology, procedures
With the battle still raging in Congress over whose version of sweeping Medicare cuts will prevail as Hospital Payment & Information Management went to press, the Health Care Financing Administration’s (HCFA) proposed changes to hospital DRGs are minimal in comparison.
Published in the June 2 issue of the Federal Register, HCFA’s proposed changes, which, if approved as part of the fiscal 1998 budget, take effect Oct. 1, amount to little more than a tweaking of the existing DRG system, experts say.
The changes are really just a stalling tactic as Congress tries to iron out the details of cutting $115 billion in Medicare spending over the next five years, says Rick Gundling, SHFMA, CMA, technical director of the Chicago-based Healthcare Financial Management Association’s Washington, DC, office. "HCFA pretty much implemented current law, knowing full well Congress may be overriding all the key elements anyway."
Last year, when HCFA’s proposed changes included developing prospective payment systems for home health, skilled nursing facilities, and inpatient rehab, the news caused a stir. (See HPIM, August 1996, pp. 113-115.) But those proposals, which sent ripples through HIM industry, seem to have fallen by the wayside, says Rita Scichilone, MHSA, RRA, CCS, health information management consultant at Professional Management Midwest in Omaha, NE.
Because the Clinton administration is "working so hard on overhauling the Medicare system, they’re really not thinking about overhauling the DRG system," she says.
In addition HCFA’s proposed changes seem to be trying to ensure equitable reimbursement for costly procedures, says Sue Prophet, director of classification and coding at the American Health Information Management Association in Chicago. HCFA is "trying to acknowledge health care industry concerns about not being equitably reimbursed for services," she says. "Several of the [proposed] changes seem to be related to moving cases to DRGs that are more similar in resource consumption, which in this particular year is good for hospitals because several of them actually increase reimbursement in some cases." (See DRG Coding Advisor for specific details of coding changes, p. 119.)
Among the general areas affected by the proposed changes are the following:
• Day outliers.
These will be completely phased out in fiscal year 1998, which begins Oct. 1, 1997. On the other hand, cost outliers will be reimbursed at a higher rate. "It used to be very difficult to get a cost outlier," says Gundling. "This will make it easier to get [reimbursement]. They’ve dropped the threshold where you can get it."
• Spinal procedures.
HCFA’s proposals will expand existing codes in this category. "It will break out those that are spinal fusions vs. other types of spinal procedures, making it more specific," says Scichilone.
• Cardiac defibrillators.
Changes in coding for cardiac defibrillators reflect HCFA’s attempts to keep up with technological changes and new techniques, experts say.
• Knee procedures.
Under HCFA’s proposals, new DRG codes will be used specifically for treating infection, which can involve more costly procedures. This will bring reimbursement more in line with resource utilization, Scichilone says.
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