[Background Material and Data on Programs within the Jurisdiction of the Committee on Ways and Means (Green Book)]
[Appendices]
[Appendix D. Medicare Reimbursement to Hospitals]
[From the U.S. Government Printing Office, www.gpo.gov]
[1998 Green Book] APPENDIX D. MEDICARE REIMBURSEMENT TO HOSPITALS
CONTENTS
General Summary
Basic Payment System
Transition Period
Update Factors
DRG Weighting Factors
Source and Calculation of the Hospital Wage Index
Sample Payment Calculation
Additional Payment Amounts
Graduate Medical Education
Disproportionate Share Hospitals
ESRD Beneficiary Discharges
Outliers
Payment for Capital
Payments on a Reasonable Cost Basis
Physicians in Teaching Hospitals
Organ Acquisition Costs
Passthrough Payments for Hemophilia Inpatients
Bad Debts of Medicare Beneficiaries
Special Treatment of Certain Facilities Under PPS
Sole Community Hospitals
Medicare Dependent Hospitals
Referral Centers
Hospitals in Rural Counties Treated as Urban Counties
Hospitals Excluded From the Prospective Payment System
PPS-Exempt Hospitals
State Systems
Administration
Prospective Payment Assessment Commission/Medicare Payment
Advisory Commission
Administrative and Judicial Review
Review Activities
Historical Trends in PPS Payments, Costs, and Margins
Medicare Payments to Hospitals
Policy Changes and PPS Operating Payments
Distribution of PPS Hospitals, Cases, and Operating Payments
Trends in PPS Operating Payments and Costs
PPS Inpatient Margins
Margins by Hospital Type
Additional Hospital Data
References
GENERAL SUMMARY
Medicare part A provides reimbursement for inpatient
hospital care through a payment system based on prospectively
set rates, the prospective payment system (PPS), for hospital
cost reporting periods beginning on or after October 1, 1983.
PPS was enacted by the Social Security Amendments of 1983
(Public Law 98-21). This appendix describes the major
reimbursement provisions of PPS.
Medicare payment for hospital inpatient services is made
according to a prospective payment system, rather than a
retrospective cost-based system. Medicare payments are made at
predetermined, specific rates which represent the average cost,
nationwide, of treating a Medicare patient according to his or
her medical condition. The classification system used to group
hospital inpatients according to their diagnoses is known as
diagnosis-related groups (DRGs). Separate DRG rates apply
depending on whether a hospital is located in a large urban
area (greater than 1 million population, or 970,000 in New
England) or other area of the country, as determined by the
Office of Management and Budget (OMB) metropolitan statistical
area (MSA) system.
During a 4-year transition period, a declining portion of
the total prospective payment was based on a hospital's
historical reasonable costs and an increasing portion was based
on a combination of regional and national Federal DRG rates.
Since the fifth year of the program (fiscal year 1988),
Medicare payments have been generally determined under a
national DRG payment methodology. Special transition provisions
apply to hospitals located in certain geographic regions. If a
hospital can treat a patient for less than the payment amount,
it can keep the savings. If the treatment costs more, the
hospital must absorb the loss. A hospital is prohibited from
charging Medicare beneficiaries any amounts (except for
deductibles, copayment amounts, and services not covered by
Medicare) which represent any difference between the hospital's
cost of providing covered care and the Medicare DRG payment
amount.
Certain hospital costs are excluded from the prospective
payment system and are paid on a reasonable cost basis, subject
to rate of increase limits. Authority is provided for States to
establish their own all-payer hospital payment systems if they
meet certain Federal requirements.
BASIC PAYMENT SYSTEM
Unless excluded from PPS, each Medicare participating
hospital is paid a predetermined payment rate per discharge for
each type of patient treated. Types of patients are defined by
the diagnosis related groups patient classification system
which assigns each hospital inpatient to one of 495 patient
categories (DRGs) based on the diagnosis and the type of
treatment received (medical or surgical).
The payment rate for each DRG is the product of two
components: a base payment amount which applies for all DRGs,
and a relative weighting factor for the particular DRG. The
base payment amount is intended to represent the cost of a
typical (average) Medicare inpatient case. The relative
weighting factor represents the relative costliness of an
average case in the particular DRG compared to the cost of the
overall average Medicare case (i.e., relative to the base
payment amount). When the DRG relative weights are each
multiplied by the base payment amount, the result is a complete
set of prices for all DRGs. Separate DRG rates apply to
hospitals located in large urban or other areas (separate base
payment amounts apply in these areas, but the DRG relative
weighting factors are the same). In addition, the base payment
amount (and, therefore, each DRG rate) is adjusted for area
differences in hospital wage levels compared to the national
average hospital wage level.
Transition Period
Although the transition to prospective payment rates was
completed in fiscal year 1988, special transition provisions
applied to hospitals located in certain geographic regions. In
a few regions with historically higher costs, Public Law 103-66
(OBRA 1993) provided for the continued use of Federal amounts
based in part on regional rates until October 1, 1996. Under
this transition provision, known as the ``regional floor,'' the
DRG payment rate was determined as the higher of 100 percent of
the national amount, or 85 percent of the national amount plus
15 percent of the regional amount.
Update Factors
PPS payment rates are updated each year using an ``update
factor.'' The annual update factor applied to increase the
Federal base payment amounts is determined, in part, by the
projected increase in the hospital market basket index (MBI).
The MBI measures the cost of goods and services purchased by
hospitals, yielding one price inflator for all hospitals in a
given year. Table D-1 shows the categories of expense used in
developing the index. The update factor also includes
adjustments for increases in hospital productivity,
technological change, and other factors that affect the level
of operating cost per discharge. The annual update factor is
also adjusted to include increases in average payments per case
attributable to increases in case mix due to changes in coding
and reporting accuracy.
Before fiscal year 1988, the same factor was used for all
hospitals; however, in subsequent years separate factors were
applied to hospitals according to their locations. Separate
update factors were set for hospitals located in large urban,
other urban, and rural areas. However, beginning in October 1,
1995, a single update factor applied for all hospitals in all
areas. Table D-2 compares the hospital market basket increases
to actual updates for the past 13 years and shows the increases
in PPS payments per case that resulted from the updates and
other policy changes.
For fiscal year 1997, the market basket increase was 2.5
percent, the average update was 2.0 percent, and the increase
in operating payments per case was 3.9 percent (see table D-2).
TABLE D-1.--HOSPITAL PROSPECTIVE PAYMENT SYSTEM INPUT PRICE INDEX (``THE MARKET BASKET'') EXPENSE CATEGORIES AND
RATES OF PRICE CHANGE, FISCAL YEARS 1992-98
----------------------------------------------------------------------------------------------------------------
Base-year Federal fiscal year percentage rates of price change
1992 ---------------------------------------------------------------------
Expense category weights \1\
(percent) 1992 \2\ 1993 \2\ 1994 \2\ 1995 \2\ 1996 \2\ 1997 \3\ 1998 \3\
----------------------------------------------------------------------------------------------------------------
1. Wages and salaries \4\.... 50.24 3.7 3.1 2.9 2.7 2.9 2.9 3.3
2. Employee benefits \4\..... 11.15 6.1 5.7 4.2 2.7 2.1 2.5 3.1
3. Professional fees:
Nonmedical \4\.............. 2.13 4.7 4.2 3.4 2.6 3.0 2.8 3.3
4. Energy and utilities...... 2.47 -0.7 2.9 0.9 0.0 2.1 4.2 -1.3
A. Fuel oil, coal, etc... 0.35 -12.5 -1.5 -7.6 3.5 8.7 10.4 -11.7
B. Electricity........... 1.35 2.0 2.2 1.5 2.4 0.2 0.4 0.3
C. Natural gas........... 0.67 0.0 6.1 3.2 -6.7 2.6 8.9 -0.5
D. Water and sewerage.... 0.11 7.1 5.9 5.2 3.5 3.9 3.0 6.1
5. Professional liability
insurance................... 1.19 2.9 3.4 -0.7 -3.3 -0.9 -1.4 -0.4
6. All other................. 32.83 1.3 2.2 1.8 4.7 2.1 1.7 2.1
A. All other products.... 24.03 0.8 1.8 1.3 5.3 1.8 0.8 1.5
1. Pharmaceuticals.. 4.16 7.2 5.0 3.5 2.5 3.8 2.4 2.9
2. Food: Direct
purchase............ 2.36 0.0 1.0 1.9 0.1 5.0 2.2 1.5
3. Food: Contract
service............. 1.10 2.4 1.7 1.7 2.1 2.3 3.3 3.8
4. Chemicals........ 3.80 -4.4 1.4 0.5 14.7 -1.0 0.7 0.1
5. Medical
instruments......... 3.13 1.9 2.3 0.9 1.1 1.4 0.8 1.4
6. Photographic
supplies............ 0.40 -0.7 -0.9 0.4 0.5 2.9 0.1 -0.7
7. Rubber and
plastics............ 4.87 -0.3 0.9 0.7 5.6 0.7 -0.1 0.4
8. Paper products... 2.06 -0.5 -0.3 0.2 13.4 2.5 -3.3 2.7
9. Apparel.......... 0.88 2.2 1.3 0.2 0.5 0.7 0.8 1.6
10. Machinery and
equipment........... 0.21 0.5 0.5 0.8 1.0 0.5 0.0 1.8
11. Miscellaneous
products............ 1.07 0.8 1.6 0.4 1.7 2.4 2.0 1.0
B. All other services.... 8.79 2.9 3.1 3.3 3.0 3.0 4.0 3.6
1. Business services
\4\................. 3.82 3.3 3.4 3.5 2.9 3.2 4.0 3.7
2. Computer services
\4\................. 1.93 1.3 3.5 4.5 3.6 4.0 5.8 3.6
3. Transportation
and shipping........ 0.19 1.0 3.1 2.8 4.0 2.3 3.3 3.6
4. Telephone........ 0.53 1.2 0.2 1.8 0.8 1.2 2.3 2.0
5. Postage.......... 0.27 4.9 0.0 0.0 7.7 2.4 0.0 8.1
6. All other labor
intensive services
\4\................. 1.71 4.2 3.2 2.7 2.5 1.9 3.1 3.3
7. All other
nonlabor intensive
services............ 0.34 3.0 3.0 2.6 2.8 2.8 2.8 2.7
----------------------------------------------------------------------------------
Total............ 100.00 3.1 3.1 2.6 3.2 2.5 2.4 2.7
----------------------------------------------------------------------------------------------------------------
\1\ Weights may not sum to 100.00 due to rounding.
\2\ Historical data subject to change only upon revision of underlying series.
\3\ Projected data subject to change in future forecasts.
\4\ Considered labor related.
Note.--The historical market basket has been revised due to the update from a 1987 to a 1992 base year.
Source: Health Care Financing Administration, Office of the Actuary.
TABLE D-2.--COMPARISON OF INCREASE IN PPS HOSPITAL MARKET BASKET INDEX, AVERAGE PPS UPDATE, AND INCREASE IN PPS
PAYMENTS PER CASE, FISCAL YEARS 1984-97
[In percent]
----------------------------------------------------------------------------------------------------------------
Forecasted Increase in
increase in Average update operating
Fiscal year market basket \2\ payments per
index \1\ case \3\
----------------------------------------------------------------------------------------------------------------
1984............................................................ 4.9 4.7 18.5
1985............................................................ 4.0 4.5 10.5
1986............................................................ 4.3 0.5 3.2
1987............................................................ 3.7 1.2 5.4
1988............................................................ 4.7 1.5 6.0
1989............................................................ 5.4 3.3 6.6
1990............................................................ 5.5 4.7 6.5
1991............................................................ 5.2 3.4 6.0
1992............................................................ 4.4 3.0 5.2
1993............................................................ 4.1 2.7 3.8
1994............................................................ 4.3 2.0 3.6
1995............................................................ 3.6 2.0 4.0
1996............................................................ 3.5 1.5 3.4
1997............................................................ 2.5 2.0 3.9
----------------------------------------------------------------------------------------------------------------
\1\ Based on data available when final PPS rates were set.
\2\ From 1988 to 1995, there were separate updates for hospitals in large urban, other urban, and rural areas.
Update for 1990 adjusted to reflect 1.22 percent across-the-board reduction in DRG weights.
\3\ Data on PPS operating payments for 1984 through 1995 are for hospital accounting years beginning during each
Federal fiscal year. Changes are based on cohorts of hospitals with Medicare Cost Reports in two consecutive
years. Increases for 1996 and 1997 estimated from current update and case-mix index trends.
Source: Prospective Payment Assessment Commission.
For fiscal year 1998, the market basket increase is
forecast at 2.8 percent. The Balanced Budget Act of 1997 sets
the update for fiscal year 1998 at 0 percent; fiscal year 1999
at the MBI minus 1.9 percent; fiscal year 2000 at the MBI minus
1.8 percent; fiscal years 2001 and 2002 at the MBI minus 1.1
percent; and for fiscal year 2003 and each subsequent fiscal
year, at the MBI percentage increase for all hospitals in all
areas.
DRG Weighting Factors
Public Law 98-21 required the Secretary to adjust the DRG
definitions and weighting factors in fiscal year 1986 and at
least every 4 years thereafter to reflect changes in treatment
patterns, technology, and other factors which may change the
relative use of hospital resources. Public Law 99-509, however,
required the Secretary to adjust the DRG definitions and
weighting factors each year, beginning in fiscal year 1988.
OBRA 1989 required the Secretary to reduce the weighting
factor for each DRG by 1.22 percent for discharges in fiscal
year 1990. In addition, the Secretary was prohibited from
adjusting DRG weighting factors on other than a budget neutral
basis beginning in fiscal year 1991.
Table D-3 shows the 20 DRGs accounting for the largest
numbers of Medicare inpatient discharges during fiscal year
1995. DRG relative weights appear in table D-21 at the end of
this appendix.
TABLE D-3.--TWENTY DIAGNOSIS-RELATED GROUPS (DRGs) WITH THE MOST
HOSPITAL DISCHARGES, FISCAL YEAR 1995
------------------------------------------------------------------------
Average
DRG Percent length
number Description Discharges total of stay
(days)
------------------------------------------------------------------------
127... Heart failure and shock.......... 706,045 6.0 6.2
89.... Simple pneumonia and pleurisy \1\ 448,587 3.8 7.1
14.... Specific cerebrovascular
disorders except transient
ischemic attack................. 371,815 3.2 7.3
88.... Chronic obstructive pulmonary
disease......................... 368,439 3.2 6.1
209... Major joint and limb reattachment
procedures...................... 344,458 2.9 6.7
430... Psychoses........................ 274,966 2.4 13.5
182... Esophagitis, gastroenteritis, and
miscellaneous metabolic
disorders....................... 246,431 2.1 4.9
174... G.I. hemorrhage \2\.............. 246,339 2.1 5.5
296... Nutritional and miscellaneous
metabolic disorders \1\......... 231,548 2.0 6.4
79.... Respiratory infections and
inflammations................... 221,867 1.9 9.3
138... Cardiac arrhythmia and conduction
disorders \2\................... 211,494 1.8 4.5
416... Septicemia....................... 202,024 1.7 8.2
112... Vascular procedures except major
reconstruction without pump..... 201,066 1.7 4.7
462... Rehabilitation................... 197,730 1.7 16.0
140... Angina pectoris.................. 184,772 1.6 3.5
320... Kidney and urinary tract
infections \1\.................. 181,641 1.6 6.4
121... Circulatory disorders with acute
myocardial infarction and
cerebrovascular complications,
discharged alive................ 167,202 1.4 7.4
148... Major small and large bowel
procedures \2\.................. 150,746 1.3 13.4
15.... Transient ischemic attack and
precerebral occlusions.......... 145,915 1.2 4.5
124... Circulatory disorders except
acute myocardial infarction,
with cardiac catheterization and
complex diagnosis............... 145,560 1.2 4.9
------------------------------
.... Total, all DRGs.................. 11,680,874 100.0 7.1
------------------------------------------------------------------------
\1\ Age greater than 17, with complications.
\2\ With complications.
Source: Health Care Financing Administration, Bureau of Data Management
and Strategy.
Source and Calculation of the Hospital Wage Index
The hospital wage index is used to adjust a hospital's base
payment amount for the wage level of the hospital's area. This
is accomplished by multiplying the labor-related component of
the national standardized payment amount by a wage index. The
wage index is intended to measure the average wage level for
hospital workers in each urban area (metropolitan statistical
area or MSA) or rural area (non-MSA parts of States) relative
to the national average wage level.
The Secretary is required to update the wage index annually
beginning October 1, 1993. The Secretary is required to base
the update on a survey of wages and wage-related costs of
short-term acute care hospitals. Tables D-18, D-19, and D-20,
at the end of this appendix, give the current wage index values
for urban areas, for all rural areas in a State, and a special
index for hospitals that are reclassified.
Calculation of the index begins with the area average
hospital hourly wage. For each MSA or non-MSA area (i.e., all
non-MSA counties in a State), total county compensation and
total paid hours data are summed separately over all counties
included in the area. Then aggregate hospital compensation for
the area is divided by aggregate paid hours of hospital
employment in the area to produce the area average hourly wage.
The hospital wage index is calculated by dividing the average
hourly wage for each area by the national average hourly wage
(determined by dividing national aggregate compensation by
national aggregate paid hours of employment).
This procedure results in an index number, such as 0.9072
(Asheville, North Carolina) or 1.2202 (Sacramento, California),
for each MSA or non-MSA area in the United States. Since the
national average wage level is represented by an index value of
1.000, the wage index value for any area has a direct and
simple interpretation. The value of 1.2202 for Sacramento means
that the hourly wage rate for hospital workers is 22.02 percent
higher in the Sacramento MSA than nationwide.
Thus, in computing the hospital payment rates applicable
for hospitals in the Sacramento MSA, the labor-related
component of the national large urban adjusted standardized
payment amount ($2,752.36) is multiplied by 1.2202 in order to
adjust for the higher level of hourly wage rates in this area.
Similarly, the calculation of the labor portion of the rates
for hospitals in Asheville would involve a reduction in the
published labor-related component of the national adjusted
standardized payment amount, to reflect the fact that hourly
wage levels in this MSA are 9.28 percent lower than the
national average (as indicated by the wage index value of
0.9072).
Sample Payment Calculation
The Federal large urban and other area base payment amounts
per discharge for fiscal year 1998 were published in the
Federal Register on August 29, 1997 (see table D-4). The
payment rates for most hospitals are computed using the
national adjusted operating standardized amounts. Puerto Rico
has its own adjusted operating standardized amounts for DRG
payment purposes. The Balanced Budget Act of 1997 changes the
way the standardized amount for Puerto Rico is determined from
a 25 percent Federal, 75 percent local blend rate, to a 50
percent Federal, 50 percent local rate.
Each payment amount is divided into a labor-related
component and a nonlabor-related component. The sum of these
components represents the base payment amount that would apply
for a hospital located in an area with a wage index of 1.0
(i.e., average wage rates for hospital workers in the area
match the national average of hospital wage rates across all
areas).
TABLE D-4.--NATIONAL AND REGIONAL ADJUSTED STANDARDIZED AMOUNTS, LABOR/NONLABOR, FISCAL YEAR 1998
----------------------------------------------------------------------------------------------------------------
Large urban areas Other areas
-----------------------------------------------
Labor Nonlabor Labor Nonlabor
related related related related
----------------------------------------------------------------------------------------------------------------
National average................................................ $2,776.21 $1,128.44 $2,732.26 $1,110.58
Puerto Rico:
National.................................................... 2,752.36 1,118.74 2,752.36 1,118.74
Puerto Rico................................................. 1,323.01 532.55 1,302.07 524.11
----------------------------------------------------------------------------------------------------------------
Source: Federal Register, 1997.
The basic payment to a hospital for a case in a particular
DRG is the applicable national payment amount, adjusted by the
local wage index value and multiplied by the weighting factor
for the DRG.
For an example of a payment calculation, assume a hospital
is located in Washington, DC. Such a hospital would be in a
large urban area. Payment is based on the large urban national
standardized amount. First, the labor-related portion of this
amount ($2,776.21 in fiscal year 1998) is multiplied by the
appropriate wage index (1.0780 for Washington, DC):
$2,776.21 1.0780 = $2,992.75
To this total is added the nonlabor-related portion of the
standardized amount:
$2,992.75 + $1,128.44 = $4,121.19
For each discharge, this new total is then multiplied by
the relative weight factor for the DRG to which the case has
been assigned. These weights range from a low of 0.2086 for DRG
382 (false labor) to a high of 16.0413 for DRG 483 (certain
tracheostomies). The payment rates for the sample hospital in
fiscal year 1998 would therefore vary from a low of $859.68
($4,121.19 0.2086) to a high of $66,109.25 ($4,121.19
16.0413).
In addition to the basic payment amount for each case,
additional payments may be made to teaching hospitals and
hospitals that serve a disproportionate share of low-income
patients. Any hospital may receive additional payments for
outliers (cases with extraordinarily high costs or a very long
stay, relative to other cases in the DRG) and for treatment of
beneficiaries with end-stage renal disease. Finally, certain
hospital costs are excluded from PPS and reimbursed separately.
The next sections of this appendix discuss additional PPS
payments and the separate reimbursement of excluded costs.
ADDITIONAL PAYMENT AMOUNTS
In addition to the DRG prospective payment rates, Medicare
payments are made to hospitals for four additional items or
services.
Graduate Medical Education
Financing of graduate medical education, the period of
training following medical school, is provided predominantly
through inpatient revenues (both hospital payments and faculty
physician fees) and a complex mix of Federal and State
government funds. The Federal Government is the largest single
explicit financing source for graduate medical education
through the Medicare Program and through its support of
residencies in Veterans Administration hospitals. Medicare
recognizes the costs of graduate medical education under two
mechanisms: direct medical education payments and an indirect
medical education adjustment. In fiscal year 1997, Medicare
paid approximately $2.5 billion in direct medical education
payments and $4.6 billion in indirect adjustments.
Direct medical education costs
The direct costs of approved medical education programs
(such as the salaries of residents and teachers and other
education costs for residents, for nurses, and for allied
health professionals trained in provider-operated programs) are
excluded from the prospective payment system. The direct
medical education costs for the training of nurses and allied
health professionals in provider-operated programs are paid for
on a reasonable cost basis. Residency training programs for
physicians are funded through formula payments based on each
hospital's per resident costs.
Medicare's payment to each hospital equals the hospital's
cost per full-time equivalent (FTE) resident, times the
weighted average number of FTE residents, times the percentage
of inpatient days attributable to Medicare part A
beneficiaries. Each hospital's per FTE resident amount is
calculated using data from the hospital's cost reporting period
that began in fiscal year 1984, increased by 1 percent for
hospital cost reporting periods beginning July 1, 1985, and
updated in subsequent cost reporting periods by the change in
the Consumer Price Index (CPI). The number of FTE residents is
calculated at 100 percent after July 1, 1986, only for
residents in their initial residency period (i.e., within the
minimum number of years of formal training necessary to satisfy
specialty requirements for board eligibility plus 1 year, but
not to exceed 5 years; residents in geriatrics or preventive
medicine are allowed 2 additional years). For residents not in
their initial residency period, the weighing factor is 50
percent after that date. Residents who are foreign or
international medical graduates are not counted as FTE
residents unless they have passed certain examinations.
OBRA 1993 provided that the amounts paid per resident for
the direct costs of graduate medical education would not be
updated by the CPI for cost reporting periods beginning during
fiscal years 1994 and 1995, except for primary care residents
and residents in obstetrics and gynecology. Primary care
residents are defined to include family medicine, general
internal medicine, general pediatrics, preventive medicine,
geriatric medicine, and osteopathic general practice. For
fiscal year 1997, the per resident amount was updated by the
CPI.
The Balanced Budget Act of 1997 made several changes to
the way in which Medicare makes payments for direct GME costs.
The Balanced Budget Act of 1997 includes: (1) a cap on the
total number of residents reimbursed under Medicare at the
level that existed for the cost reporting period ending on or
before December 31, 1996; (2) payments to qualified nonhospital
providers for their direct GME costs (federally qualified
health centers, rural health clinics, MedicarePlus
organizations, and other appropriate providers); (3) incentive
payments to teaching hospitals that voluntarily agree to reduce
the number of medical residents in training; (4) a
demonstration project under which direct GME payments are to be
made to qualifying consortia that consist of a teaching
hospital and one or more specified entities who operate an
approved medical residency training program; (5) a study on the
variations in the costs of hospital overhead and supervisory
physician medical education costs among hospitals; and (6) the
requirement that the Medicare Payment Advisory Commission
(MedPAC) make recommendations on long-term payment policies
regarding teaching hospitals and GME.
Indirect medical education costs
Additional payments are made to hospitals under PPS for the
indirect costs attributable to approved medical education
programs. These indirect costs may be due to a variety of
factors, including the extra demands placed on the hospital
staff as a result of the teaching activity or additional tests
and procedures that may be ordered by residents. Congressional
reports on the PPS authorizing legislation indicate that the
indirect medical education payments are also to account for
factors not necessarily related to medical education which may
increase costs in teaching hospitals, such as more severely ill
patients, increased use of diagnostic testing, and higher
staff-to-patient ratios.
The additional payment to a hospital is based on a formula
that has provided an increase of approximately 7.7 percent in
the Federal portion of the DRG payment for each 0.1 increase in
the hospital's intern and resident-to-bed ratio on a
curvilinear basis (i.e., the increase in the payment is less
than proportional to the increase in the ratio of interns and
residents to bed size). The Balanced Budget Act of 1997
includes reductions in the IME adjustment from 7.7 to 7.0
percent in fiscal year 1998; to 6.5 percent in fiscal year
1999; to 6.0 percent in fiscal year 2000; and to 5.5 percent in
fiscal year 2001 and subsequent years.
Disproportionate Share Hospitals
Public Law 99-272 (COBRA) provided that additional payments
would be made to hospitals that serve a disproportionate share
of low-income patients. The adjustment was extended several
times until OBRA 1990 (Public Law 101-508) made it a permanent
payment adjustment. A hospital's disproportionate patient
percentage is defined as the hospital's total number of
inpatient days attributable to Federal Supplemental Security
Income (SSI) Medicare beneficiaries divided by the total number
of Medicare patient days, plus the number of Medicaid patient
days divided by the total patient days.
Table D-5 shows the minimum disproportionate patient
percentages required to qualify for the adjustment and the
formulas for computing the adjustment effective October 1,
1993. For discharges occurring after September 1994, hospitals
with a disproportionate share greater than 20.2 percent would
receive a disproportionate share adjustment equal to 5.88
percent plus 0.825 percent of the difference between 20.2
percent and the hospital's disproportionate share patient
percentage.
TABLE D-5.--CRITERIA TO QUALIFY FOR DISPROPORTIONATE SHARE ADJUSTMENT
AND FORMULAS FOR COMPUTING ADDITIONAL PAYMENT, EFFECTIVE OCTOBER 1, 1993
------------------------------------------------------------------------
Qualifying
disproportionate Formula or fixed
Type of hospital patient percentage percentage
(P) adjustment
------------------------------------------------------------------------
Urban, 100 or more beds........ 15 percent......... (P-15)(0.6) 0.65 +
2.5.
Urban, 100 or more beds........ 20.2 percent....... (P-20.2) 0.8 +
5.88.
Urban, 100 or more beds........ 30 percent of 35 percent.
inpatient revenue
from State or
local indigent
care funds.
Urban, under 100 beds.......... 40 percent......... 5 percent.
Rural, over 500 beds........... Not specified in Same as urban, 100
law; regulations or more beds.
set threshold at
15 percent.
Rural, over 100 beds........... 30 percent......... 4 percent.
Rural, under 100 beds.......... 45 percent......... 4 percent.
Rural, sole community hospital. 30 percent......... 10 percent.
Rural, rural referral center
and--
(a) not a sole community 30 percent......... (P-30)(0.6) + 4.0.
hospital, 100 or more beds.
(b) not a sole community 45 percent......... (P-30)(0.6) + 4.0.
hospital, under 100 beds.
(c) also a sole community 30 percent......... Greater of 10
hospital. percent or (P-
30)(0.6) + 4.0.
------------------------------------------------------------------------
Note.--The disproportionate patient percentage (P) is equal to the sum
of (a) the number of Medicare inpatient days provided to Supplemental
Security Income recipients divided by total Medicare inpatient days,
and (b) the number of inpatient days provided to Medicaid
beneficiaries divided by total inpatient days.
Source: Prospective Payment Assessment Commission.
The Balanced Budget Act of 1997 includes reductions in the
current DSH payment formula amounts of 1 percent for fiscal
year 1998; 2 percent in fiscal year 1999; 3 percent in fiscal
year 2000; 4 percent in fiscal year 2001; 5 percent in fiscal
year 2002; and 0 percent in fiscal year 2003 and each
subsequent fiscal year. The Balanced Budget Act of 1997 also
requires the Secretary to submit to the House Ways and Means
and Senate Finance Committees, no later than 1 year after
enactment, a report that contains a new formula for determining
additional DSH payments to hospitals.
ESRD Beneficiary Discharges
Effective with cost reporting periods beginning on or after
October 1, 1984, additional payments are made to hospitals for
inpatient dialysis provided to end-stage renal disease (ESRD)
beneficiaries if total discharges of such beneficiaries from
non-ESRD related DRGs account for 10 percent or more of the
hospital's total Medicare discharges. A hospital meeting the
criteria is paid an additional payment for each ESRD
beneficiary discharge based on the estimated weekly cost of
dialysis and the average length of stay of its ESRD
beneficiaries.
Outliers
Additional amounts are paid to hospitals for atypical cases
(known as ``outliers'') which have either extremely long length
of stay (day outliers) or extraordinarily high costs (cost
outliers) compared to most discharges classified in the same
DRG. The law requires that total outlier payments to all
hospitals covered by the system represent no less than 5
percent and no more than 6 percent of the total estimated PPS
payments for the fiscal year. Effective with discharges
occurring on or after October 1, 1984, a transferring hospital
may qualify for an additional payment for extraordinarily high-
cost cases meeting the criteria for cost outliers. Outlier
payments are financed by an offsetting overall reduction in the
base payment amount per discharge. Effective October 1, 1986,
Public Law 99-509 established separate urban and rural set-
aside factors for financing outlier payments. The separate set-
aside factors for rural and urban hospitals for financing
outlier payments ended when the other urban/rural payment
differential was eliminated in fiscal year 1995, as enacted in
OBRA 1990.
Public Law 100-203 increased payments for outlier cases
classified in DRGs relating to patients with burns from April
1, 1988, through September 30, 1989. This legislation also
prohibited the Secretary from issuing any final regulations
before September 1, 1988, which changed the method of payment
for outlier cases (other than burn cases).
The Secretary published new outlier rules on September 30,
1988, effective for discharges on or after October 1, 1988. The
new rules modified the thresholds used in determining whether a
case is an outlier and increased the allowable payment amounts
for cost outliers. The effect of the changes increased the
proportion of all outlier payments going to cost outliers.
Previously, about 85 percent of outlier payments were made for
length-of-stay (LOS) outliers and 15 percent for cost outliers.
Under the new rules, 60 percent of payments were made for cost
outliers and 40 percent for LOS outliers. (Cases that meet both
length-of-stay and cost outlier criteria are paid under the
policy that produces the higher payment.)
To determine the amount of additional payments for outlier
cases, the LOS for each case in a DRG is first compared against
the applicable LOS threshold for the category. If the LOS for a
case exceeds the threshold, then the case qualifies as a day
outlier. In this instance, the hospital is paid its regular
payment rate per discharge (for this DRG), plus a per diem
amount (44 percent of the hospital's per diem rate for the DRG)
for each Medicare covered day above the LOS threshold.
If the case does not qualify as a day outlier, then it may
qualify as a cost outlier. The case will qualify for extra
payments on this basis if the hospital's Medicare covered
charges for the case, adjusted to operating costs (and reduced
by its indirect teaching and disproportionate share
adjustments, if applicable), exceed its cost outlier threshold
for the DRG. In this instance, the hospital is paid its regular
payment rate per discharge for the DRG, plus the Federal
portion of 75 percent of the difference between its adjusted
(and reduced) charges for the case and the cost outlier
threshold.
In October 1991, Medicare began a transition from cost-
based to prospective payment for hospital capital expenses (see
below). In the August 30, 1991, final rule implementing this
change, the Secretary established a unified outlier payment
system for capital and operating costs. For day outliers,
payments for covered days were set equal to a percentage of the
combined per diem operating and capital payment rates for the
DRG. For cost outliers, payments are made only if the combined
operating and capital cost for the case exceed the cost outlier
threshold for the DRG. As in the case of operating cost
payments, standardized capital payment amounts are reduced to
establish a pool for outlier payments.
OBRA 1993 legislated two changes in outlier policy that
became effective in fiscal year 1995. First, day outliers are
phased out over a period of 4 years. By fiscal year 1999, all
outlier payments will be based solely on cost. Second, cost-
outlier thresholds are based on a fixed amount beyond the
payment rate for each case so that hospitals incur the same
loss on every case before outlier payments are applied.
The Balanced Budget Act of 1997 eliminates the use of the
indirect medical education adjustment and disproportionate
share hospital payments as part of costs that trigger outlier
payments, effective beginning in fiscal year 1998.
PAYMENT FOR CAPITAL
Until fiscal year 1992, Medicare paid a share of hospitals'
reasonable capital-related costs, based on services used by
beneficiaries as a proportion of total services furnished by
the hospital. (Payments in recent years have been subject to
fixed percentage reductions described below.) Four basic types
of costs are allowable for Medicare reimbursement:
1. Interest on mortgages, bonds, or other borrowing used to
finance capital investments or current operations.
Interest costs are generally offset by any interest
income earned by the hospital on investments;
2. Depreciation, figured on a straight line basis, for plant
and equipment, but not for land;
3. Rental payments for plant and equipment;
4. Property taxes and insurance premiums related to capital
assets.
One other type of capital cost was formerly recognized
under Medicare, but has not been reimbursable for hospital
services since fiscal year 1989: return on equity for investor-
owned hospitals. Return on equity payments provided a return to
investors equivalent to what they would have earned if they had
used their money for some other purpose.
When the new PPS system was enacted in 1983, Congress
excluded capital costs. However, the Secretary was instructed
to report to Congress on methods for including capital in PPS
and was authorized (but not required) to implement prospective
payment for capital on or after October 1, 1986.
The Secretary's authority to include capital in PPS was
postponed twice. The Supplemental Appropriations Act of 1986
(Public Law 99-349) delayed prospective capital payment until
October 1, 1987. The Omnibus Budget Reconciliation Act of 1987
(Public Law 100-203) delayed prospective payment until October
1, 1991. However, the Secretary was required, not merely
authorized, to implement a prospective system by that date. The
system was required to provide that capital payments be made on
a per-discharge basis, with adjustments based on each
discharge's classification under the DRGs or some similar
system. At the Secretary's discretion, the system could include
adjustments to reflect variations in costs of construction or
borrowing, exceptions (including exceptions for hospitals with
existing obligations), and adjustments to reflect hospital
occupancy rates.
While prospective payment for capital was delayed (see
below), Congress included in budget reconciliation legislation
fixed percentage reductions in amounts otherwise payable by
Medicare for capital costs. These cuts began in fiscal year
1987, with a 3.5-percent reduction. Medicare would compute its
share of total costs for each hospital and then reduce that
computed share by 3.5 percent. The percentage reduction
increased to 7 percent for the first quarter of fiscal year
1988, 12 percent for the rest of that fiscal year, and 15
percent for fiscal year 1989 through fiscal year 1991. Delays
in completing budget legislation meant that there were brief
intervals in 1987 and 1989 when no reduction was taken. The
reductions originally applied only to capital costs related to
inpatient care. Beginning in fiscal year 1990, capital payments
for outpatient hospital services were also reduced. The
reductions did not apply to certain types of rural hospitals
defined in Medicare law, including sole community hospitals,
essential access community hospitals, and rural primary care
hospitals.
The Omnibus Budget Reconciliation Act of 1990 (Public Law
101-508) continued capital payment reductions through fiscal
year 1995, with the reduction percentage lowered to 10 percent
for fiscal years 1992 through 1995. Because prospective payment
began in fiscal year 1992, the reductions were not applied
directly to each hospital's computed capital costs. Instead,
the Secretary was required to set payments under the new system
(or under the new system and PPS combined) in such a way as to
achieve an aggregate inpatient hospital capital spending
reduction of 10 percent, as compared to what would have been
spent under the reasonable cost system.
The administration's rules for prospective payment for
capital costs were published in the Federal Register on August
30, 1991. The rule provides for a 10-year transition to fully
prospective payment beginning October 1, 1991.
Under the rule, the Secretary establishes a standard per
case capital payment rate, based on average capital costs per
case in fiscal year 1989 and updated for inflation and other
factors. Through fiscal year 1995, the base rate was adjusted
in order to meet the requirement that capital payment rates be
set in such a way as to achieve an aggregate saving of 10
percent relative to what would have been paid under a full cost
system. Beginning with fiscal year 1996, that requirement
expired. As a result, the standardized payment rates increased
by more than 20 percent. For fiscal year 1998 the standardized
payment rate for capital is $371.51 ($177.57 in Puerto Rico).
Rates are adjusted using the DRG weights and a geographic
factor based on area wage indices.
Hospitals in large urban areas receive a 3-percent increase
and hospitals in Alaska and Hawaii receive a cost-of-living
adjustment. A disproportionate share adjustment is provided for
urban hospitals with more than 100 beds. A hospital receives
approximately a 2.1 percent point increase in capital payments
for each 10 percent increment in its disproportionate share
percentage.
An adjustment is also made for the indirect costs of
medical education. This adjustment is based on the ratio of
residents to average daily inpatient census. Capital payments
increase approximately 2.8 percentage points for each 10
percent increment in the residents to average daily census
ratio. Additional capital payments are issued for outlier
cases.
During a transition period that ends September 30, 2000,
each individual hospital's capital payment rate is a blended
rate based partly on its own historic capital costs and partly
on the Federal rate. In fiscal year 1996, rates are 50 percent
hospital-specific and 50 percent Federal. The hospital-specific
portion will drop by 10 percent a year, until fully Federal
rates take effect in fiscal year 2001.
The Omnibus Budget Reconciliation Act of 1993 (Public Law
103-66) reduced the Federal rate for inpatient capital expenses
by 7.4 percent to correct for inflation forecast errors.
The transition rules include two provisions to assist
hospitals most disadvantaged by the shift to prospective
payment: a ``hold harmless'' payment system and exception
payments for certain facilities. Hospitals with base year
capital costs above average continue to be paid on a cost basis
for the portion of their costs related to ``old'' capital
investments (generally assets put in use or obligated by the
end of 1990). The rest of the hospital's capital payments are
based on the prospective rates. For example, if 75 percent of a
hospital's costs are for depreciation and interest on a pre-
1990 building, the hospital is paid Medicare's share of those
costs (subject to the current 10-percent reduction). For
``new'' capital, it receives a portion of the prospective rate
based on the hospital's own ratio of new to total capital. In
this case, because old capital accounts for 75 percent of
costs, the hospital's new capital payment is 25 percent of the
prospective rate for each case treated. This hold harmless
payment system will continue until the end of the 10-year
transition, or until a hospital's old capital costs drop to the
point at which it is more advantageous for the hospital to
shift to fully prospective payment.
Exception payments are made to hospitals whose capital
payments under the new system fall significantly short of their
actual capital costs. Most hospitals are assured of receiving a
minimum of 70 percent of costs. Specified urban hospitals with
a disproportionate share of low-income patients receive at
least 80 percent of costs, and rural sole community hospitals
at least 90 percent. Computation of exception payments is
cumulative. If a hospital received more than the minimum in 1
year but a shortfall the next, the surplus from the first year
would be applied before any additional payment would be made in
the second year.
The Balanced Budget Act of 1997 requires the Secretary to
rebase the capital payment rates for discharges occurring on or
after October 1, 1997 by the actual rates in effect in fiscal
year 1995, so that aggregate capital payments will equal 90
percent of what payments would have been under reasonable cost
payments, with an additional reduction in the capital payment
rate of 2.1 percent from October 1, 1997 through September 30,
2002. The Balanced Budget Act of 1997 eliminates the allowance
for return on equity capital. In addition, when a facility
undergoes a change of ownership, the Balanced Budget Act of
1997 provides for a depreciation adjustment of the historical
cost of the asset recognized by Medicare, less depreciation
allowed, to the owner of record as of the date of enactment, or
to the first owner of record of the asset in the case of an
asset not in existence as of the date of enactment.
Table D-6 shows the average capital payments per case
received by PPS hospitals in each year since the implementation
of PPS for inpatient operating costs in 1984. The decrease in
average capital payments per case in 1988 reflects the
provision in the Omnibus Budget Reconciliation Acts of 1986 and
1987 that reduced Medicare payments below costs. The decrease
in 1994 reflects the provision in the Omnibus Budget
Reconciliation Act of 1993 that corrected for previous errors
in setting the base capital payment rates. Capital payments
generally have stayed between 8 and 9 percent of total
inpatient payments. The proportion of capital costs covered by
those payments fell from 100 percent under cost-based
reimbursement to a low of 87.4 percent in 1990. The
implementation of capital PPS initially resulted in increased
payment-to-cost ratios, but those fell as the payment rates
were adjusted to reflect more accurate data. The jump in the
payment-to-cost ratio in 1995--when Medicare inpatient capital
payments exceeded cost for the first time ever--reflects the
elimination of the budget neutrality requirement in fiscal year
1996.
The per case capital payment amount varies widely by
hospital group, as shown in table D-7. Urban hospitals had an
average payment rate of $682 in 1995, for example, while rural
hospitals received only $422 per case. Major teaching hospitals
were paid $922 for each case, while nonteaching hospitals got
$545. However, the share of total PPS inpatient payments, which
include both operating and capital payments, was very similar
for different types of hospitals. Moreover, the share of
capital costs covered by these payments frequently was higher
for groups with lower payment amounts. Despite urban hospitals'
much higher average payment, that amount equalled 101.5 percent
of their capital costs, while rural hospitals were paid 102.3
percent of their capital costs.
TABLE D-6.--PPS CAPITAL PAYMENTS PER CASE, SHARE OF TOTAL PPS INPATIENT
PAYMENTS, AND RATIO OF PAYMENTS TO COSTS, 1984-95
------------------------------------------------------------------------
In percent
---------------------------
Capital Share of
Year payments per total PPS Payment-to-
case inpatient cost ratio
payments
------------------------------------------------------------------------
1984.......................... $310 8.1 100.0
1985.......................... 371 8.6 100.0
1986.......................... 409 9.1 99.3
1987.......................... 426 9.0 97.5
1988.......................... 423 8.5 90.2
1989.......................... 463 8.6 87.9
1990.......................... 476 8.3 87.4
1991.......................... 510 8.4 87.6
1992.......................... 586 9.1 97.2
1993.......................... 589 8.9 95.2
1994.......................... 585 8.5 92.7
1995.......................... 628 8.8 101.6
------------------------------------------------------------------------
Note.--Data on PPS capital costs and payments are for hospital
accounting years beginning during each Federal fiscal year. Hospitals
in Massachusetts and New York excluded from data in 1984 and 1985;
hospitals in New Jersey excluded from data in 1984 through 1988;
hospitals in Maryland excluded from data in all years.
Source: Prospective Payment Assessment Commission analysis of Medicare
Cost Report data from the Health Care Financing Administration.
TABLE D-7.--PROSPECTIVE PAYMENT SYSTEM CAPITAL PAYMENTS PER CASE, SHARE
OF TOTAL PPS INPATIENT PAYMENTS, AND RATIO OF PAYMENTS TO COSTS BY
HOSPITAL GROUP, 1995
------------------------------------------------------------------------
In percent
---------------------------
Capital Share of
Hospital group payments per total PPS Payment-to-
case inpatient cost ratio
payments
------------------------------------------------------------------------
Urban......................... $682 8.8 101.5
Rural......................... 422 8.9 102.3
Large urban................... 722 8.7 102.3
Other urban................... 631 9.0 100.3
Rural referral................ 517 9.2 96.5
Sole community................ 415 8.7 106.3
Other rural................... 392 8.9 103.5
Major teaching................ 922 7.9 105.8
Other teaching................ 668 8.7 100.6
Nonteaching................... 545 9.3 100.9
Disproportionate share large
urban........................ 768 8.3 104.1
Disproportionate share other
urban........................ 646 8.7 100.6
Disproportionate share rural.. 431 9.0 98.6
Nondisproportionate share..... 572 9.2 100.8
Teaching and disproportionate
share........................ 767 8.2 103.3
Teaching only................. 683 8.7 100.4
Disproportionate share only... 575 9.1 100.7
Nonteaching
nondisproportionate share.... 523 9.5 101.1
Voluntary..................... 640 8.8 101.3
Proprietary................... 665 9.8 102.2
Urban government.............. 664 8.0 103.4
Rural government.............. 369 8.4 104.3
All hospitals................. $628 8.8 101.6
------------------------------------------------------------------------
Source: Prospective Payment Assessment Commission analysis of Medicare
Cost Report data from the Health Care Financing Administration.
PAYMENTS ON A REASONABLE COST BASIS
Costs for certain items are excluded from the prospective
payment system and thus are not included in the prospective
payment rates. As explained in the sections below, Medicare
pays for its share of several costs according to the former
reasonable cost-based system.
Physicians in Teaching Hospitals
Physician services in hospitals are paid under the
physician fee schedule. If a teaching hospital so elects, the
direct medical and surgical services of physicians in such
hospitals would be paid for on the basis of reasonable costs.
Organ Acquisition Costs
The estimated net expenses associated with Medicare organ
acquisition in certified transplantation centers are excluded
from the prospective payment system and paid on a reasonable
cost basis.
Passthrough Payments for Hemophilia Inpatients
OBRA 1989 excluded the cost of administering blood clotting
factors for hemophilia inpatients from PPS, for items furnished
from June 19, 1990, through December 19, 1991. OBRA 1993
further extended this provision through fiscal year 1994. The
price per unit for the blood clotting factors was set at a
predetermined rate, in consultation with ProPAC, and the cost
of administering the blood clotting factors was determined by
multiplying a predetermined price per unit of blood clotting
factor by the number of units provided to the individual. The
Balanced Budget Act of 1997 makes the payment for the costs of
administering blood clotting factor permanent effective October
1, 1997.
Bad Debts of Medicare Beneficiaries
An additional payment is made to hospitals for bad debts
attributable to unpaid deductible and copayment amounts related
to covered services received by Medicare beneficiaries.
The Secretary is prohibited from making any change in the
policy in effect on August 1, 1987, including changes in
hospital documentation requirements. OBRA 1989 prohibited the
Secretary from requiring hospitals to change their bad debt
collection policy if a fiscal intermediary accepted the policy
in accordance with the rules in effect as of August 1, 1987,
for indigency determination procedures, for recordkeeping, and
for determining whether to refer a claim to an external
collection agency. For such facilities, the Secretary also may
not collect from the hospital on the basis of an expectation of
a change in the hospital's collection policy. The Balanced
Budget Act of 1997 reduces bad debt payments by 25 percent in
fiscal year 1998; 40 percent in fiscal year 1999; and 45
percent in fiscal year 2000 and each subsequent fiscal year.
SPECIAL TREATMENT OF CERTAIN FACILITIES UNDER PPS
Sole Community Hospitals
Sole community hospitals (SCHs) are hospitals that, because
of factors such as isolated location, weather conditions,
travel conditions, or absence of other hospitals, are the sole
source of inpatient services reasonably available in a
geographic area, or are located more than 35 road miles from
another hospital. In addition, the Secretary is authorized to
designate a hospital as an SCH if, by reason of factors such as
travel time to the nearest alternative source of appropriate
inpatient care, location, weather conditions, travel
conditions, or absence of other like hospitals, the Secretary
determines that it is the sole source of inpatient hospital
services reasonably available to individuals in a geographic
area.
OBRA 1989 established new payment provisions that apply to
all SCHs for cost reporting periods beginning after April 1,
1990. An SCH may receive the higher of the following rates as
the basis of reimbursement: a target amount based on 100
percent hospital-specific prospective rates based on fiscal
year 1982 costs updated to the present; a target amount based
on hospital-specific prospective rates based on fiscal year
1987 costs updated to the present; or the Federal PPS rate.
Current SCHs not meeting the criteria are allowed to continue
to qualify for payments as an SCH.
OBRA 1989 made permanent the provision by which an SCH may
request additional payments if the hospital experiences a
decrease of more than 5 percent in its total inpatient cases
due to circumstances beyond its control. An SCH may receive
such payments if it meets sole community hospital criteria but
is not being paid as a sole community hospital. As of September
1997, 641 hospitals were classified as sole community
providers.
Medicare Dependent Hospitals
OBRA 1989 created a new classification of hospitals termed
Medicare dependent hospitals. Medicare dependent hospitals are
hospitals that are located in a rural area, have 100 beds or
less, are not classified as a sole community provider, and for
which not less than 60 percent of inpatient days or discharges
in the hospital cost reporting period that began during fiscal
year 1987 were attributable to Medicare. These hospitals are
reimbursed in the same fashion as sole community providers
during cost reporting periods beginning on or after April 1,
1990, and ending on or before March 31, 1993. As of September
1997, there were 366 Medicare dependent hospitals. OBRA 1993
(Public Law 103-66) extended additional payments to Medicare
dependent hospitals through September 30, 1994, on a phase-down
basis. The Balanced Budget Act of 1997 extends the MDH Program
through October 1, 2001.
Referral Centers
The Secretary is authorized to provide exceptions and
adjustments as appropriate for rural referral centers (RRCs).
These centers are defined as:
1. Rural hospitals having 275 or more beds;
2. Hospitals having at least 50 percent of their Medicare
patients referred from other hospitals or from
physicians not on the hospital's staff, at least 60
percent of their Medicare patients residing more than
25 miles from the hospital, and at least 60 percent of
the services furnished to Medicare beneficiaries are
furnished to those who live 25 miles or more from the
hospital; or
3. Rural hospitals meeting the following criteria for hospital
cost reporting periods beginning on or after October 1,
1985:
--A case-mix index equal to or greater than the median case
mix for all urban hospitals (the national
standard), or the median case mix for urban
hospitals located in the same census region,
excluding hospitals with approved teaching
programs. The case-mix index is a measure of the
relative costliness of the hospital's mixture of
cases among the DRGs compared to the national
average mixture of Medicare cases;
--A minimum of 5,000 discharges, the national discharge
criterion (3,000 in the case of osteopathic
hospitals), or the median number of discharges in
urban hospitals for the region in which the
hospital is located; and
--At least one of the following three criteria: more than
50 percent of the hospital's medical staff are
specialists, at least 60 percent of discharges are
for inpatients who reside more than 25 miles from
the hospital, or at least 40 percent of inpatients
treated at the hospital have been referred either
from physicians not on the hospital's staff or from
other hospitals.
Referral centers are paid prospective payments based on the
applicable urban payment amount rather than the rural payment
amount, as adjusted by the hospital's area wage index. The
applicable amount is the ``other urban'' rate (i.e., the rate
for urban areas with 1 million or fewer people) for all
referral centers except those (if any) located in MSAs greater
than 1 million.
OBRA 1993 extended the classification through fiscal year
1994 for those referral centers classified as of September 30,
1992. As of September 1997, 158 hospitals were qualified as
referral centers.
Although referral centers loose some of the benefit of
their classification status because of the equalization of the
other urban and rural payment rates in fiscal year 1995,
referral centers continue to be entitled to preferential
consideration before the Medicare Geographic Classification
Review Board (see below).
The Balanced Budget Act of 1997 provides that hospitals
designated as RRCs since fiscal year 1991 are permanently
classified as RRCs. The Balanced Budget Act of 1997 also
provides that any hospital ever classified as an RRC cannot be
denied a request for geographic reclassification on the basis
of any comparison of its average hourly wage with the average
hourly wage of hospitals in the area where the RRC is located.
Hospitals in Rural Counties Treated as Urban Counties
Public Law 100-203 provided for the reclassification of
rural hospitals as urban if the county in which the hospital
was located was adjacent to two or more MSAs and met criteria
regarding commuting patterns of its residents to the central
counties of the adjacent MSAs.
OBRA 1989 (Public Law 101-239) established the Medicare
Geographic Classification Review Board to consider appeals by
hospitals for a change in classification from rural to urban,
or from one urban area to another urban area. The Board was
created to determine whether a hospital should be redesignated
to an area with which it has close proximity for purposes of
using the other area's standardized amount, wage index, or
both. For geographic reclassifications effective for discharges
in fiscal year 1994 and subsequent years, a hospital may seek
reclassification to only one area. Urban hospitals must be no
more than 15 miles from the area to which they seek
reassignment, and rural hospitals must be no more than 35 miles
from such an area.
A hospital may qualify for the payment rate of another area
if it proves that its incurred costs are comparable to those of
hospitals in that area. To use an area's wage index, a hospital
must demonstrate that: (1) its average hourly wage is equal to
at least 84 percent of the average hourly wage of hospitals in
the area to which it seeks redesignation; and (2) its average
hourly wage weighted for occupational categories is at least 90
percent of the average hourly wage of hospitals in the area to
which its seeks redesignation. For geographic reclassifications
effective for discharges in fiscal year 1994 and subsequent
years, the wage index guidelines were revised to specify, in
addition, that a hospital cannot be reclassified unless its
average hourly wage is at least 108 percent of the average
hourly wage of the area in which it is located.
Effective for fiscal year 1996 and subsequent years, a
hospital may not be reclassified for purposes of using another
area's standardized amount if the area to which the hospital
seeks reclassification does not have a higher standardized
amount than that currently received by the hospital. In
addition, a hospital that seeks reclassification for the
purpose of using another area's wage index may apply for
reclassification only to an area that has a higher pre-
reclassified average hourly wage than that of the hospital's
original geographic area.
For fiscal year 1998, 313 rural hospitals (14.1 percent)
and 109 (4 percent) urban hospitals have been reclassified by
the Board. The Balanced Budget Act of 1997 provides that
hospitals can request geographic reclassification for the
purposes of receiving additional DSH payments for the period
ending 30 months after enactment.
HOSPITALS EXCLUDED FROM THE PROSPECTIVE PAYMENT SYSTEM
PPS-Exempt Hospitals
The following hospitals are by law excluded from the
prospective payment system and are paid on the basis of
reasonable costs, subject to the Tax Equity and Fiscal
Responsibility Act of 1982 (TEFRA) rate of increase limits:
psychiatric hospitals, rehabilitation hospitals, psychiatric or
rehabilitation units which are distinct parts of a hospital,
alcohol and drug abuse hospitals and such distinct units of
hospitals (for cost reporting periods beginning before October
1, 1987), children's hospitals (with patients averaging under
18 years of age), long-term hospitals (with an average
inpatient length of stay greater than 25 days), and cancer
hospitals (hospitals extensively involved in treatment for and
research on cancer) classified as such before December 31,
1990. In addition, the act provides an exemption for any
hospital classified as a cancer hospital before December 31,
1991, that is located in a State that has a PPS waiver under
section 1814(b). In addition, there are special cases in which
the prospective payment system is not applied, such as
emergency services provided to Medicare beneficiaries in
hospitals not participating in Medicare.
OBRA 1990 increased the cost limits imposed on hospitals
exempt from PPS. Under prior law, hospitals with costs in
excess of the cost limits imposed by the Tax Equity and Fiscal
Responsibility Act (TEFRA) would be reimbursed for their cost
up to the TEFRA limit. Under OBRA 1990, hospitals with costs in
excess of the cost limits imposed by TEFRA receive 50 percent
of the costs that are in excess of the limit, up to a maximum
of 110 percent of the limit. In addition, the Secretary is
directed to develop a new prospective payment methodology for
exempt hospitals, or to substantially modify the current
target-rate system.
OBRA 1993 provided for an update factor to the cost limits
of market basket minus 1.0 percentage point for fiscal years
1994 through 1997. Hospitals with operating costs in fiscal
year 1990 that exceeded the target amount by more than 10
percent are exempt from the update reduction, with partial
reductions applied to hospitals near the threshold. Hospitals
reimbursed under approved State cost control systems are also
excluded from the prospective rates.
For PPS-exempt facilities, the Balanced Budget Act of 1997
sets the fiscal year 1998 update at 0 percent, and for fiscal
years 1999-2002, the update factor will vary depending on a
hospital's target amount and costs. For hospitals (1) with
costs that equal or exceed their target amounts by 10 percent
or more, the update will be equal to the market basket; (2)
that exceed their target, but by less than 10 percent, the
update factor will be equal to zero or, if greater, the market
basket minus 0.25 percentage points for each percentage point
by which costs are less than 10 percent over the target; (3)
that are either at their target, or below (but not below \2/3\
of the target amount for the hospital), the update factor will
be equal to zero or, if greater, the market basket percentage
minus 2.5 percentage points; or (4) that do not exceed \2/3\ of
their target amount, the update factor will be equal to 0
percent.
In addition, the Balanced Budget Act of 1997 includes
several provisions affecting Medicare payments to PPS-exempt
hospitals and units. The Balanced Budget Act of 1997 reduces
the capital payment update amount for PPS-exempt hospitals and
units by 15 percent for fiscal years 1998-2002. The Balanced
Budget Act of 1997 establishes a cap on PPS-exempt TEFRA
limits, also known as target amounts, for PPS-exempt hospitals
or units for cost reporting periods beginning on or after
October 1, 1997 and before October 1, 2002. The Secretary is
required to estimate the 75th percentile of the target amounts
for hospitals for cost reporting periods ending during fiscal
year 1996, and then update the amount up to the first cost
reporting period beginning on or after October 1, 1997, by a
factor equal to the market basket percentage increase. For cost
reporting periods beginning during each of fiscal years 1999-
2002, the Secretary is required to update the amount by a
factor equal to the market basket increase.
The Balanced Budget Act of 1997 provides for changing
bonus payments to PPS-exempt facilities to equal the lesser of:
(1) 15 percent of the amount by which the target amount exceeds
the amount of operating costs, or (2) 2 percent of the target
amount. In addition, for cost reporting periods beginning on or
after October 1, 1997, the Balanced Budget Act of 1997 provides
for continuous improvement bonus payments for certain eligible
hospitals. The Balanced Budget Act of 1997 establishes
different payment and target amount rules for new PPS-exempt
hospitals or distinct-part units within hospitals that first
received Medicare payments on or after October 1, 1997. The
Balanced Budget Act of 1997 provides PPS-exempt hospitals and
distinct units of hospitals that received Medicare payments for
services furnished before January 1, 1990, with the option of
rebasing the hospital's target amount for the 12-month cost
reporting period beginning during fiscal year 1998.
The Balanced Budget Act of 1997 also requires the
Secretary to establish a case-mix adjusted PPS for
rehabilitation hospitals and distinct-part units, effective
beginning in fiscal year 2001. The Secretary is required to
establish: (1) classes of discharges of rehabilitation
facilities by patient case-mix groups based on impairment, age,
related prior hospitalization, comorbidities, and functional
capability of the discharged individual and other appropriate
factors; and (2) a method of classifying specific discharges
from rehabilitation facilities within these groups. The
Secretary is further required to collect data to develop,
establish, administer, and evaluate a case-mix adjusted
prospective payment system for long-term care hospitals.
State Systems
Section 1886(c) of the Social Security Act (as added by
TEFRA) gave the HHS Secretary discretion to reimburse hospitals
in a State according to the State's hospital reimbursement
control system rather than according to Medicare's
reimbursement methods if the State requests this change and if
HHS determines that the State system meets certain
requirements. Currently, only Maryland has a waiver to operate
its own system. New York has a waiver covering four counties
participating in the Finger Lakes Area Hospital Corporation
rural hospital payment demonstration.
Public Laws 98-21 and 98-369 added several more
requirements for State systems. According to final regulations
published by HHS on April 24, 1986 (51 F.R. 15481) implementing
these legislative changes, HHS has the discretion to allow
Medicare hospital reimbursement to be made in accordance with a
State reimbursement control system if the chief executive
officer of the State requests approval of the State system, and
provided that the State system:
1. Applies to substantially all non-Federal acute care
hospitals in the State;
2. Applies to at least 75 percent of all inpatient revenues or
expenses for the State;
3. Provides assurances that payers, hospital employees and
patients in the State will be treated equitably under
its system;
4. Provides assurances that its system will not result in
greater Medicare expenditures over 36-month periods;
5. Does not preclude health maintenance organizations (HMOs)
or competitive medical plans (CMPs) from negotiating
directly with hospitals concerning payment for
inpatient services;
6. Limits hospital charges to Medicare beneficiaries to
deductibles, coinsurance, and services for which the
beneficiary would not be entitled to have payment made
under Medicare part A; and prohibits payment under part
B of Medicare for nonphysician services provided to
hospital inpatients unless this prohibition is waived.
Public Law 101-239 (OBRA 1989) required the Secretary's
test of effectiveness of a State cost containment system to be
based on the aggregate rate of increase from October 1, 1984,
to the most recent date for which annual data are available.
This provision also extended the waiver for the New York rural
hospital payment demonstration.
Special provisions apply to States that have existing
demonstration projects approved by HCFA under section 402 of
the Social Security Amendments of 1967 or section 222(a) of the
Social Security Amendment of 1972 for the operation of State
reimbursement control systems. HHS approval of a State's
application to continue the operation of a system upon
expiration of the demonstration project is mandatory if, and
for so long as, the system meets the minimum requirements
described in the six items listed above.
Public Law 101-508 revised the Secretary's test of
effectiveness of a State cost containment system to be based on
the rate of increase in costs per hospital inpatient admission
as compared to the rate of increase in such costs with respect
to all hospitals between January 1, 1981, and the present. In
addition, OBRA 1990 provided that a State no longer qualifying
for a PPS waiver be provided with a reasonable period, not to
exceed 2 years, for transition from the State system to the
national payment system, and required restoration of the waiver
if the State returned to compliance during the transition
period.
ADMINISTRATION
Prospective Payment Assessment Commission/Medicare Payment Advisory
Commission
The Prospective Payment Assessment Commission (ProPAC) was
a commission composed of 17 independent experts charged with
advising the Congress on PPS and Medicare payment policies. The
Balanced Budget Act of 1997 replaces ProPAC and the Physician
Payment Review Commission with a 15-member Medicare Payment
Advisory Commission (MedPAC). MedPAC is required to submit
annual reports to Congress on March 1 and June 1 concerning the
Medicare Program.
Administrative and Judicial Review
Administrative and judicial appeals are allowed under
procedures and authorities already established under the
Medicare Program. However, the law precludes administrative and
judicial review of: (1) the ``budget neutrality'' adjustment
(see above), and (2) the DRG payment amounts, including the
establishment of DRGs, the methodology for classifying
discharges within DRGs, and the DRG weighting factors.
Review Activities
Public Law 97-248, the Tax Equity and Fiscal Responsibility
Act of 1982 (known as TEFRA), replaced the existing
Professional Standards Review Organization (PSRO) Program with
the Utilization and Quality Control Peer Review Program. The
Secretary of the Department of Health and Human Services was
required to enter into performance-based contracts with
physician-sponsored or physician-access organizations known as
peer review organizations (PROs). As a condition of receiving
payments under the prospective payment system, hospitals are
required to enter into an agreement with a PRO under which the
PRO reviews the validity of diagnostic and procedural
information provided by the hospitals; the completeness,
adequacy and quality of care provided; and the appropriateness
of admissions patterns, discharges, lengths of stay, transfers,
and services furnished in outlier cases.
Since 1982, the statute governing the PRO Program has been
amended numerous times, and as of October 1996 the PROs are
operating under the fifth ``scope of work.''
HISTORICAL TRENDS IN PPS PAYMENTS, COSTS, AND MARGINS
Medicare Payments to Hospitals
In fiscal year 1997, hospitals will be paid an estimated
$124.7 billion for Medicare-covered services, as shown in table
D-8. The largest share of this amount, $78.9 billion, will be
for PPS inpatient operating costs. The Medicare Program will
provide about 90 percent of these payments and the other 10
percent will come from beneficiaries for deductibles and
coinsurance. PPS hospitals will also receive some $8.0 billion
in capital payments. Another $13.2 billion will be paid for
operating and capital costs related to services provided in
PPS-excluded facilities, which include psychiatric and
rehabilitation hospitals and distinct-part units as well as
long-term and children's hospitals. Payments for Medicare-
covered hospital outpatient services will be $20.9 billion,
with almost 40 percent coming from beneficiaries. Hospitals
will also receive $2.5 billion for the direct costs of training
programs, including those for interns and residents and for
nursing and allied health personnel. Hospital-based postacute
care facilities will be paid an estimated $9.2 billion.
Policy Changes and PPS Operating Payments
Since the implementation of PPS, the distribution of
Medicare payments to hospitals has changed. Some redistribution
has resulted from changes in hospital behavior, but much of it
is attributable to policy decisions. These include the
transition to national average payment rates, reductions in
teaching hospital payments, the addition of a disproportionate
share adjustment and increases in the size of that adjustment
for many hospitals, and larger update factors for rural
hospitals in recent years.
Table D-9 shows the factors affecting the PPS payment rate
for different types of hospitals. The average standardized
amount is somewhat higher for hospitals in large urban areas
than other hospitals; the first column of data in this table
shows the variation in payments if hospitals were paid only
based on the standardized amount for the area in which they are
located. The wage index reflects the average hourly wage for
hospitals located there; if hospitals' payments were adjusted
by the wage index for the area in which they were located,
their payments would be adjusted as indicated in the second
column of the table.
TABLE D-8.--TOTAL MEDICARE PAYMENTS TO HOSPITALS BY PAYMENT TYPE, FISCAL
YEAR 1997
------------------------------------------------------------------------
Amount
Payment category (in
billions)
------------------------------------------------------------------------
PPS......................................................... $78.9
Program................................................. 72.0
Operating........................................... 64.0
Capital............................................. 8.0
Beneficiary copayments.................................. 6.9
PPS-excluded................................................ 13.2
Program................................................. 12.0
Operating........................................... 11.2
Capital............................................. 0.8
Beneficiary copayments.................................. 1.2
Outpatient.................................................. 20.9
Program................................................. 12.6
Beneficiary copayments.................................. 8.3
Postacute \1\................................................ 9.2
Program \1\............................................. 9.0
Beneficiary copayments \1\.............................. 0.2
Direct medical education.................................... 2.5
Interns and residents................................... 2.2
Nursing and allied health................................ 0.3
----------
Total........................................... 124.7
------------------------------------------------------------------------
\1\ Estimate based on Prospective Payment Assessment Commission analysis
of data from the Health Care Financing Administration and the
Congressional Budget Office.
Source: Prospective Payment Assessment Commission analysis of
Congressional Budget Office March 1997 estimates.
Certain hospitals receive other adjustments to their base
payment rates under PPS. Hospitals in Alaska and Hawaii have a
cost-of-living adjustment to recognize the higher cost of
nonlabor input there. In addition, sole community hospitals
have the option of payments based on their own updated base-
year costs or the PPS rate. Hospitals also can be reclassified
into areas where they are not located for the purpose of
qualifying for a higher standardized payment amount or wage
index. These factors may substantially increase payments to
some hospitals, although by definition they have no impact on
total PPS payments.
PPS payments also depend on the mix of cases treated by
the hospital; this can vary widely across hospitals and groups
of hospitals. Moreover, additional payments are made for cases
that are exceptionally costly relative to others in the same
category; these cases and these payments are not distributed
evenly across hospitals. Finally, the PPS payment is adjusted
for teaching hospitals and hospitals that treat a
disproportionate share of low-income patients; these two
adjustments substantially affect the distribution of payments.
TABLE D-9.--FACTORS AFFECTING FISCAL YEAR 1997 PPS OPERATING PAYMENTS PER CASE, BY HOSPITAL GROUP, FISCAL YEAR
1995
----------------------------------------------------------------------------------------------------------------
PPS
Average Average Other Base Average payments
Hospital group standardized wage payment payment case- Outlier IME/DSH per case
amount (in index rate rate (in mix factor factor (in
dollars) factors dollars) index dollars)
----------------------------------------------------------------------------------------------------------------
Urban......................... $3,882 1.02 1.00 $3,935 1.50 1.06 1.17 $7,281
Rural......................... 3,847 0.79 1.04 3,416 1.21 1.03 1.02 4,392
Large urban................... 3,908 1.09 1.00 4,137 1.50 1.06 1.19 7,836
Other urban................... 3,847 0.93 1.00 3,671 1.50 1.06 1.13 6,550
Rural referral................ 3,847 0.79 1.07 3,510 1.37 1.03 1.04 5,261
Sole community................ 3,847 0.80 1.09 3,631 1.16 1.01 1.02 4,476
Other rural................... 3,847 0.78 1.01 3,294 1.18 1.03 1.02 4,081
Major teaching................ 3,895 1.12 1.00 4,208 1.66 1.07 1.49 11,083
Other teaching................ 3,879 1.00 1.00 3,880 1.55 1.06 1.14 7,225
Nonteaching................... 3,868 0.93 1.01 3,746 1.33 1.04 1.05 5,474
DSH:
Large urban............... 3,908 1.10 1.00 4,168 1.52 1.06 1.31 8,747
Other urban............... 3,847 0.92 1.00 3,645 1.52 1.06 1.18 6,919
Rural..................... 3,847 0.76 1.03 3,324 1.21 1.03 1.07 4,504
Non-DSH....................... 3,874 0.96 1.01 3,833 1.39 1.05 1.04 5,810
Teaching and DSH.............. 3,883 1.03 1.00 3,963 1.59 1.06 1.32 8,817
Teaching only................. 3,885 1.04 1.01 4,004 1.56 1.06 1.10 7,283
DSH only...................... 3,867 0.94 1.00 3,719 1.37 1.05 1.11 5,960
No teaching or DSH............ 3,869 0.93 1.01 3,741 1.31 1.04 1.00 5,125
Urban <100 beds............... 3,877 1.00 0.99 3,861 1.21 1.04 1.01 4,915
Urban 100-199 beds............ 3,881 1.03 1.00 3,938 1.36 1.04 1.11 6,198
Urban 200-299 beds............ 3,880 1.02 1.00 3,931 1.47 1.05 1.11 6,752
Urban 300-399 beds............ 3,880 1.01 1.00 3,902 1.55 1.06 1.16 7,451
Urban 400-499 beds............ 3,884 1.02 1.00 3,945 1.59 1.06 1.23 8,210
Urban 500+ beds............... 3,887 1.04 1.00 3,994 1.70 1.07 1.30 9,438
Rural <50 beds................ 3,847 0.79 1.01 3,304 1.06 1.01 1.01 3,605
Rural 50-99 beds.............. 3,847 0.79 1.03 3,383 1.16 1.02 1.01 4,079
Rural 100-149 beds............ 3,847 0.79 1.05 3,437 1.26 1.03 1.02 4,581
Rural 150-199 beds............ 3,847 0.79 1.05 3,433 1.27 1.04 1.03 4,712
Rural 200+ beds............... 3,847 0.78 1.08 3,528 1.39 1.04 1.06 5,511
New England................... 3,887 1.14 1.00 4,299 1.42 1.04 1.17 7,439
Middle Atlantic............... 3,888 1.10 1.00 4,197 1.42 1.07 1.21 7,704
South Atlantic................ 3,868 0.91 1.01 3,654 1.46 1.05 1.13 6,342
East North Central............ 3,876 0.96 1.01 3,813 1.43 1.05 1.13 6,479
East South Central............ 3,855 0.81 1.01 3,377 1.38 1.06 1.11 5,490
West North Central............ 3,865 0.86 1.02 3,568 1.44 1.04 1.10 5,901
West South Central............ 3,867 0.85 1.01 3,494 1.45 1.06 1.13 6,080
Mountain...................... 3,873 0.94 1.02 3,795 1.48 1.04 1.09 6,400
Pacific....................... 3,887 1.20 1.00 4,453 1.49 1.04 1.16 8,063
Voluntary..................... 3,877 1.00 1.01 3,905 1.46 1.05 1.14 6,852
Proprietary................... 3,875 0.95 1.01 3,770 1.44 1.05 1.09 6,254
Urban government.............. 3,874 0.99 1.00 3,837 1.48 1.06 1.32 7,995
Rural government.............. 3,847 0.77 1.02 3,306 1.15 1.03 1.02 4,030
All hospitals......... 3,875 0.98 1.01 3,856 1.44 1.05 1.15 6,709
----------------------------------------------------------------------------------------------------------------
Note.--PPS payments are estimated using rules in effect on October 1, 1996. Excludes hospitals in Maryland.
Averages are weighted by the number of Medicare cases in each hospital. The other factors category is the
combined effect of cost-of-living adjustments for hospitals in Alaska and Hawaii, geographic reclassification,
and payment adjustments for sole community hospitals. IME = indirect medical education. DSH = disproportionate
share.
Source: ProPAC PPS payment model and MedPAR data for fiscal year 1995 from the Health Care Financing
Administration.
Distribution of PPS Hospitals, Cases, and Operating Payments
Table D-10 shows estimated PPS operating payments by
hospital group for fiscal year 1997. The distribution of
payments varies widely across hospital groups. For example,
although 56 percent of all PPS hospitals are located in urban
areas, these hospitals account for 80 percent of all PPS
discharges and receive 87 percent of all PPS operating
payments. By contrast, rural hospitals account for 44 percent
of PPS hospitals, but only 20 percent of PPS discharges and 13
percent of PPS operating payments.
The indirect medical education (IME) adjustment is intended
to recognize hospitals' indirect costs of operating approved
graduate medical education programs. The disproportionate share
(DSH) adjustment is intended to compensate hospitals that treat
large proportions of low-income patients. These two adjustments
account for $9.1 billion in 1997. Almost all of these payments
go to hospitals located in urban areas.
Outlier payments are intended to protect hospitals from the
risk of financial losses due to cases with exceptionally long
stays or high costs. Large urban hospitals and teaching
hospitals and those located in the Middle Atlantic region
receive the highest proportion of outlier payments. Small urban
hospitals and all rural hospitals receive the lowest percentage
of outlier payments.
For all PPS hospitals, the basic DRG payment is estimated
to account for 83 percent of fiscal year 1997 PPS operating
payments. IME, DSH, and outlier payments are expected to
account for 17 percent of the total, or about $12.2 billion.
Rural hospitals receive only 5 percent of their total PPS
operating payments through these provisions, while urban
hospitals count on these mechanisms for 19 percent of their PPS
operating payments. This is because teaching and
disproportionate share hospitals are much more likely to be
located in cities and urban hospitals are much more likely to
treat more complex cases that become outliers.
Trends in PPS Operating Payments and Costs
The increase in PPS operating payments per case has
differed from the update factor in every year, as shown in
table D-11. In the first 2 years of prospective payment,
payments per discharge rose sharply, by 18.5 percent and 10.5
percent, respectively. This is attributable to two factors:
overestimation of the base year hospital costs upon which the
initial PPS rates were set due to the use of unaudited Medicare
Cost Reports, and a large increase in the aggregate CMI in the
early years because of more emphasis on accurate DRG coding and
complete documentation of the medical record.
TABLE D-10.--DISTRIBUTION OF PPS HOSPITALS AND DISCHARGES AND ESTIMATED FISCAL YEAR 1997 PPS OPERATING PAYMENTS BY HOSPITAL GROUP
--------------------------------------------------------------------------------------------------------------------------------------------------------
PPS operating payments (in billions of dollars)
Number of Percent of Percent of --------------------------------------------------------
Hospital group PPS PPS PPS Indirect
hospitals discharges operating Total Outlier medical Disproportionate
payments education share hospitals
--------------------------------------------------------------------------------------------------------------------------------------------------------
Urban................................................... 2,832 80 87 $61.7 $2.8 $4.5 $4.3
Rural................................................... 2,243 20 13 9.2 0.2 0.1 0.2
Large urban............................................. 1,567 46 53 37.7 1.7 3.3 2.8
Other urban............................................. 1,265 35 34 24.0 1.1 1.1 1.5
Rural referral.......................................... 130 4 3 2.1 0.1 0.0 (\1\)
Sole community.......................................... 648 4 3 2.0 (\1\) (\1\) (\1\)
Other rural............................................. 1,465 12 7 5.1 0.1 (\1\) 0.1
Major teaching.......................................... 263 12 20 14.1 0.6 3.1 1.5
Other teaching.......................................... 811 32 34 24.3 1.1 1.5 1.5
Nonteaching............................................. 4,001 56 46 32.5 1.3 0.0 1.5
Disproportionate share large urban...................... 786 25 32 22.8 0.9 2.5 2.8
Disproportionate share other urban...................... 679 22 23 16.2 0.8 0.9 1.5
Disproportionate share rural............................ 448 5 4 2.6 0.1 (\1\) 0.2
Nondisproportionate share............................... 3,162 48 41 29.4 1.3 1.1 0.0
Teaching and disproportionate share..................... 701 29 38 26.8 1.1 3.5 3.0
Teaching only........................................... 373 15 16 11.7 0.6 1.1 0.0
Disproportionate share only............................. 1,212 23 21 14.8 0.6 0.0 1.5
Nonteaching nondisproportionate share................... 2,789 33 25 17.7 0.7 0.0 0.0
Urban <100 beds......................................... 700 4 3 2.3 0.1 (\1\) (\1\)
Urban 100-199 beds...................................... 925 18 16 11.5 0.4 0.2 0.9
Urban 200-299 beds...................................... 567 20 20 14.5 0.6 0.6 0.9
Urban 300-399 beds...................................... 316 15 17 12.0 0.6 0.8 0.8
Urban 400-499 beds...................................... 157 9 11 7.7 0.4 0.8 0.6
Urban 500+ beds......................................... 167 14 19 13.6 0.7 2.0 1.1
Rural <50 beds.......................................... 1,175 4 2 1.5 (\1\) (\1\) (\1\)
Rural 50-99 beds........................................ 656 6 4 2.6 0.1 (\1\) (\1\)
Rural 100-149 beds...................................... 240 4 3 2.1 0.1 (\1\) (\1\)
Rural 150-199 beds...................................... 97 3 2 1.3 (\1\) (\1\) (\1\)
Rural 200+ beds......................................... 75 3 2 1.7 0.1 (\1\) (\1\)
New England............................................. 213 6 6 4.4 0.1 0.5 0.1
Middle Atlantic......................................... 519 17 20 13.9 0.7 1.4 1.0
South Atlantic.......................................... 719 18 17 12.0 0.5 0.5 0.8
East North Central...................................... 796 18 17 12.2 0.5 0.9 0.5
East South Central...................................... 441 8 7 4.9 0.2 0.1 0.3
West North Central...................................... 704 8 7 4.9 0.2 0.3 0.1
West South Central...................................... 726 11 10 6.8 0.3 0.2 0.6
Mountain................................................ 338 4 4 2.9 0.1 0.1 0.1
Pacific................................................. 619 10 13 8.9 0.3 0.4 0.9
Voluntary............................................... 2,946 74 76 53.7 2.3 3.7 2.9
Proprietary............................................. 692 11 10 7.4 0.3 0.1 0.5
Urban government........................................ 420 9 10 7.2 0.3 0.8 1.0
Rural government........................................ 966 6 4 2.6 0.1 (\1\) 0.1
All hospitals..................................... 5,075 100 100 70.9 3.1 4.6 4.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Less than $0.05 billion.
Note.--PPS payments are estimated using rules in effect as of October 1, 1996. Excludes hospitals in Maryland.
Source: Prospective Payment Assessment Commission PPS payment model, MedPAR data for fiscal year 1995 from the Health Care Financing Administration and
Congressional Budget Office March 1997 estimates.
TABLE D-11.--ANNUAL CHANGE IN PPS OPERATING COSTS AND PAYMENTS, FIRST 12 YEARS OF PPS
[In percent]
----------------------------------------------------------------------------------------------------------------
PPS costs and payments
---------------------------------------------------------------------
Year \1\ Operating Operating Market Update
Operating Operating costs per payments basket factor \3\
costs payments case per case forecast \2\
----------------------------------------------------------------------------------------------------------------
1984...................................... -4.6 11.1 1.8 18.5 4.9 4.7
1985...................................... 4.7 4.2 11.0 10.5 3.9 4.5
1986...................................... 5.6 -0.6 9.6 3.2 3.9 0.5
1987...................................... 7.4 3.8 9.1 5.4 3.5 1.2
1988...................................... 9.8 6.7 9.0 6.0 4.7 1.5
1989...................................... 10.4 7.7 9.2 6.6 5.5 3.3
1990...................................... 10.7 8.2 8.9 6.5 4.6 4.7
1991...................................... 9.1 8.0 7.0 5.9 4.3 3.4
1992...................................... 6.9 7.4 4.7 5.2 3.1 3.0
1993...................................... 3.5 6.1 1.2 3.8 3.0 2.7
1994...................................... 0.4 5.2 -1.1 3.6 2.4 2.0
1995...................................... 0.1 5.2 -1.1 4.0 3.0 2.0
----------------------------------------------------------------------------------------------------------------
\1\ Data on PPS operating costs and payments are for hospital accounting years beginning during each Federal
fiscal year. Data on the market basket and update factor are for the corresponding Federal fiscal year.
\2\ As of September 1 of the previous year.
\3\ Update factor for 1990 adjusted for 1.22 percent across-the-board reduction in diagnosis-related group
weights.
Note.--Changes based on cohorts of hospitals with Medicare Cost Reports in two consecutive years. Hospitals in
Massachusetts and New York excluded from data in 1984 and 1985; hospitals in New Jersey excluded from data in
1984 through 1988; hospitals in Maryland excluded from data in all years.
Source: Prospective Payment Assessment Commission analysis of Medicare Cost Report data from the Health Care
Financing Administration.
After an increase of 3.2 percent in 1986, payments per
case grew at an annual rate of 5.9 percent from 1987 through
1992, as a result of large increases in both the PPS market
basket index and the aggregate Medicare case-mix index. From
1993 through 1995, the PPS update was lower, resulting in the
smallest 3-year increase in payments per case since the
beginning of PPS. Despite this better control over payment
rates in recent years, chart D-1 indicates that the increase in
operating payments per case during the first 12 years of PPS is
almost three times as great as the cumulative value of the
annual update factor.
Following an increase of only 1.8 percent in the first year
of PPS, PPS operating costs per discharge rose by about 11
percent in the second year, and about 9 percent from 1986
through 1990. However, the 7.0-percent growth in operating
costs per case in 1991 was the smallest since the first year of
PPS, and the rise of 1.2 percent in 1993 was below general
inflation. Costs per case actually decreased in 1994 and 1995.
Cost growth experience has not been uniform across
hospitals, as shown in table D-12. Through 1990, urban and
rural hospitals had about the same rate of increase. In the
first year, both groups reacted to prospective payment by
holding their cost growth far below the rates prevailing before
PPS, while annual cost increases in the following 6 years were
much higher for both groups. From 1991 through 1995, however,
urban hospitals held their cost growth to 1.9 percent annually,
while rural hospital costs rose at a 3.4-percent rate.
CHART D-1. CUMULATIVE INCREASES IN PPS MARKET BASKET, UPDATE FACTOR,
AND PAYMENTS AND COSTS PER CASE, FIRST 12 YEARS OF PPS (IN PERCENT)
Source: Prospective Payment Assessment Commission analysis
of Medicare Cost Report data from the Health Care Financing
Administration.
The recent low rate of cost growth among hospitals in large
urban areas may reflect the fact that the most rapid changes in
the health care system appear to be occurring in the largest
cities. From 1991 through 1995, these hospitals' costs per
discharge rose at a rate 0.9 percentage points below that for
other urban hospitals and 1.9 percentage points below that for
rural hospitals.
The pattern of cost increases also varies substantially by
ownership. In the first year of PPS, when hospitals perceived
potential pressure to control costs, proprietary facilities had
by far the smallest increase of any group. Once this pressure
lessened, costs increased sharply through 1990 for all groups,
including the proprietaries. However, from 1991 on, proprietary
hospitals reined in their costs to a far greater extent than
the other groups.
TABLE D-12.--ANNUAL RATE OF CHANGE IN PPS OPERATING COSTS PER CASE BY
HOSPITAL GROUP AND PERIOD, 1984-95
[In percent]
------------------------------------------------------------------------
Period
Hospital group -----------------------------
1984 1985-90 1991-95
------------------------------------------------------------------------
Urban..................................... 1.6 9.4 1.9
Rural..................................... 1.5 9.2 3.4
Large urban............................... 0.6 9.2 1.5
Other urban............................... 3.2 9.8 2.4
Rural referral............................ 1.5 9.7 3.4
Sole community............................ 1.3 8.6 3.6
Other rural............................... 1.4 9.2 3.3
Major teaching............................ 1.3 9.1 1.7
Other teaching............................ 1.3 9.4 2.2
Nonteaching............................... 1.9 9.5 2.0
Disproportionate share large urban........ 0.0 9.0 1.4
Disproportionate share other urban........ 3.2 9.7 2.6
Disproportionate share rural.............. 0.3 9.7 3.4
Nondisproportionate share................. 2.4 9.6 2.2
Teaching and disproportionate share....... 0.7 9.2 2.0
Teaching only............................. 2.6 9.7 2.4
Disproportionate share only............... 1.8 9.5 1.8
Nonteaching nondisproportionate share..... 2.0 9.4 2.1
Voluntary................................. 1.8 9.3 2.2
Proprietary............................... 0.7 10.0 0.3
Urban government.......................... 2.4 9.6 2.1
Rural government.......................... 1.5 9.3 3.9
All hospitals....................... 1.8 9.5 2.1
------------------------------------------------------------------------
Note.--Data on PPS operating costs and payments are for hospital
accounting years beginning during each Federal fiscal year. Changes
based on cohorts of hospitals with Medicare Cost Reports in two
consecutive years. Hospitals in Massachusetts and New York excluded
from data in 1984 and 1985; hospitals in New Jersey excluded from data
in 1984 through 1988; hospitals in Maryland excluded from data in all
years.
Source: Prospective Payment Assessment Commission analysis of Medicare
Cost Report data from the Health Care Financing Administration.
PPS Inpatient Margins
The PPS inpatient margin compares combined Medicare
operating and capital payments with the corresponding costs. In
1995, the aggregate PPS margin rose for the fourth consecutive
year to 10.0 percent, as shown in table D-13. This contrasts
with a declining trend through the first 8 years of prospective
payment, during which the margin fell to a low of -2.4 percent.
The turnaround is attributable to the sharp slowdown in
hospital cost growth. If current trends continue, the aggregate
PPS inpatient margin for 1997 would be 14.2 percent. This would
be the highest PPS inpatient margin in the 14 years of
prospective payment.
TABLE D-13.--PPS INPATIENT (OPERATING PLUS CAPITAL) MARGINS, BY HOSPITAL GROUP, FIRST 12 YEARS OF PPS
[In percent]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Hospital group 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
--------------------------------------------------------------------------------------------------------------------------------------------------------
Urban................................................... 14.5 13.9 9.8 6.8 3.3 0.8 -1.2 -2.2 -0.9 1.3 5.7 10.7
Rural................................................... 7.7 7.4 2.2 0.2 -1.2 -2.9 -3.7 -3.7 -1.4 -0.7 0.2 5.1
Large urban............................................. 15.0 13.9 10.0 6.8 3.1 0.7 -0.7 -1.4 0.4 2.8 7.8 12.7
Other urban............................................. 13.8 14.0 9.4 6.8 3.7 0.9 -1.9 -3.4 -2.9 -1.0 2.5 7.8
Rural referral.......................................... 9.9 12.9 7.9 6.1 3.9 1.2 0.0 -0.6 2.9 2.6 2.8 6.1
Sole community.......................................... 8.0 6.4 2.1 0.3 -1.2 -2.6 -1.2 -0.8 2.5 3.8 4.4 7.3
Other rural............................................. 7.0 6.0 0.3 -1.9 -3.2 -4.5 -6.0 -6.0 -4.8 -3.8 -2.5 3.7
Major teaching.......................................... 18.6 19.9 15.2 12.9 10.0 7.9 7.2 7.5 9.3 10.9 16.4 20.5
Other teaching.......................................... 14.9 14.5 10.5 7.2 3.9 1.4 -1.0 -2.2 -1.2 0.8 4.6 9.3
Nonteaching............................................. 11.2 10.0 5.2 2.5 -0.7 -3.3 -5.2 -6.4 -5.0 -3.0 0.4 6.0
Disproportionate share large urban...................... 15.3 14.2 10.8 8.3 5.5 3.5 3.0 2.8 5.0 7.8 13.1 17.6
Disproportionate share other urban...................... 13.5 14.2 10.0 7.8 5.0 2.4 0.0 -1.3 -1.0 0.9 4.5 10.0
Disproportionate share rural............................ 8.5 8.2 2.8 0.4 -0.5 -2.1 -2.2 -1.8 0.2 0.5 2.2 7.6
Nondisproportionate share............................... 12.6 11.9 7.0 3.6 -0.3 -2.9 -5.5 -6.7 -5.5 -4.0 -0.7 4.4
Teaching and disproportionate share..................... 15.8 15.9 12.4 10.0 7.6 5.3 4.1 3.6 5.0 7.3 11.8 16.2
Teaching only........................................... 16.1 16.3 11.3 7.0 2.2 -0.1 -3.2 -4.0 -2.9 -1.7 2.2 7.0
Disproportionate share only............................. 11.6 10.7 6.1 3.6 0.6 -1.6 -3.0 -3.7 -2.3 -0.1 3.9 10.0
Nonteaching nondisproportionate share................... 10.8 9.5 4.5 1.5 -1.8 -4.6 -6.9 -8.4 -7.2 -5.4 -2.5 2.7
Voluntary............................................... 14.0 13.7 9.6 6.5 3.1 0.7 -1.3 -2.5 -1.1 0.6 4.3 9.0
Proprietary............................................. 12.9 11.0 6.3 3.4 0.0 -3.9 -5.7 -4.4 -2.2 1.8 8.6 15.6
Urban government........................................ 13.5 14.1 9.1 7.6 4.8 3.6 2.7 1.4 2.2 4.9 9.7 14.5
Rural government........................................ 6.6 5.1 -0.6 -2.3 -2.3 -3.7 -4.0 -4.4 -2.6 -2.0 -2.6 2.5
All hospitals..................................... 13.4 13.0 8.7 5.9 2.7 0.3 -1.5 -2.4 -1.0 1.0 5.0 10.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note.--Data on PPS operating and capital costs and payments are for hospital accounting years beginning during each Federal fiscal year. Hospitals in
Massachusetts and New York excluded from data in 1984 and 1985; hospitals in New Jersey excluded from data in 1984 through 1988; hospitals in Maryland
excluded from data in all years.
Source: Prospective Payment Assessment Commission analysis of Medicare Cost Report data from the Health Care Financing Administration.
Table D-14 shows that, even with the high aggregate PPS
inpatient margin in 1995, more than a third of all PPS
hospitals have negative PPS inpatient margins. The PPS margin,
however, does not represent the bottom line for the hospital
industry. The total margin, which includes expenses and
revenues related to Medicare and other inpatient and outpatient
care as well as other facility activities, increased steadily
from the early 1970s to the early 1980s, peaking in 1984. In
subsequent years--as Medicare tightened its control over
inpatient payment rate increases--the total margin began to
fall. In the late 1980s, however, this decline leveled off at
3.3 percent, and by 1991 the total margin had risen to 4.4
percent. It remained steady through 1993, and then increased to
5.0 percent in 1994 and 5.8 percent in 1995, the highest level
since 1986 and above levels experienced before PPS began.
Margins by Hospital Type
PPS inpatient margins vary by hospital group. The margin
for urban hospitals was 14.5 percent in the first year--
exceeding that for rural hospitals by 6.8 percentage points.
Beginning in fiscal year 1986, the Congress enacted a series of
policy changes designed to increase payment for rural
hospitals. By 1988, although the difference between the two
groups had decreased to 3.7 percentage points, rural hospitals
had negative margins while urban ones were still receiving
payments that exceeded their costs. The disparity narrowed to
0.5 percentage points by 1992, but has widened as urban
hospitals have constrained their costs more than rural
hospitals.
Major teaching hospitals consistently have had the highest
aggregate inpatient margin of any hospital group. Moreover, the
difference in the margins for major teaching and nonteaching
hospitals has grown. For major teaching hospitals, the
inpatient margin fell from 19.9 percent in the second year of
PPS to a low of 7.2 percent in 1990, while the drop for other
teaching and nonteaching hospitals was much sharper. By 1995,
all three groups had higher margins than in the early years of
the decade, with the largest increase seen in the major
teaching group. Their margin was 20.5 percent--11.2 percentage
points higher than for other teaching hospitals and 14.5
percentage points higher than for the nonteaching group. These
differences had been 3.7 percentage points and 7.4 percentage
points, respectively, in the first PPS year.
The trend in inpatient margins by ownership category also
reflects changes in payment policy and degree of success in
controlling costs. In the first year, voluntary, proprietary,
and urban government hospitals all had inpatient margins around
13-14 percent, while rural government hospitals lagged behind.
In 1990, the inpatient margin for the proprietary group, which
had fallen by more than 18 percentage points since the
beginning of PPS to -5.7 percent, was the lowest of the four
groups. However, as these hospitals held down their cost
growth, their margin increased by more than 20 percentage
points, to 15.6 percent in 1995.
TABLE D-14.--DISTRIBUTION OF PPS INPATIENT (OPERATING PLUS CAPITAL) MARGINS AND PERCENT OF HOSPITALS WITH NEGATIVE MARGIN, FIRST 12 YEARS OF PPS
[In Percent]
--------------------------------------------------------------------------------------------------------------------------------------------------------
PPS margin
Percentile \1\ ---------------------------------------------------------------------------------------------------------
1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
--------------------------------------------------------------------------------------------------------------------------------------------------------
10th.......................................... -5.8 -8.2 -15.6 -18.5 -22.6 -24.7 -26.1 -27.3 -26.6 -23.6 -22.4 -16.8
25th.......................................... 3.1 1.3 -4.2 -6.8 -9.7 -11.9 -13.6 -15.4 -14.3 -12.1 -9.9 -4.6
Median........................................ 10.3 9.2 4.5 2.6 0.6 -1.7 -3.3 -4.4 -2.7 -0.7 1.6 6.5
75th.......................................... 16.2 16.0 11.8 10.4 9.4 7.9 6.6 5.9 7.7 9.5 12.2 17.1
90th.......................................... 21.5 22.3 18.1 17.4 17.5 16.3 15.8 15.0 16.9 19.3 22.9 27.4
Percent with negative PPS inpatient margin.... 18.2 21.8 35.6 42.2 48.3 54.7 59.0 61.2 57.1 51.8 45.8 34.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Table entries are the margins of hospitals at the 10th percentile, 25th percentile, median, 75th percentile, and 90th percentile.
Note.--Data on PPS operating and capital costs and payments are for hospital accounting years beginning during each Federal fiscal year. Hospitals in
Massachusetts and New York excluded from data in 1984 and 1985; hospitals in New Jersey excluded from data in 1984 through 1988; hospitals in Maryland
excluded from data in all years.
Source: Prospective Payment Assessment Commission analysis of Medicare Cost Report data from the Health Care Financing Administration.
TABLE D-15.--TOTAL MARGINS BY HOSPITAL GROUP, 1984-95
----------------------------------------------------------------------------------------------------------------
Hospital group 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
----------------------------------------------------------------------------------------------------------------
Urban....................... 7.7 6.9 4.5 3.7 3.6 3.5 3.5 4.3 4.2 4.4 4.9 5.7
Rural....................... 5.0 4.7 3.0 2.9 3.3 4.2 4.7 5.1 5.3 5.1 5.5 6.6
Large urban................. 7.5 6.6 4.0 3.2 3.0 2.9 2.4 3.6 3.5 3.8 4.2 4.9
Other urban................. 8.1 7.2 5.4 4.6 4.5 4.7 5.2 5.6 5.3 5.2 6.1 6.9
Rural referral.............. 7.4 8.4 5.7 5.7 5.1 6.5 6.5 6.5 6.7 6.8 7.1 8.6
Sole community.............. 4.8 4.1 2.7 2.3 2.7 3.3 4.3 5.4 5.6 5.6 5.9 6.3
Other rural................. 4.4 3.7 2.2 2.1 3.0 3.7 4.2 4.5 4.6 4.3 4.7 5.9
Major teaching.............. 5.2 5.7 2.2 2.1 2.4 1.8 0.9 3.5 3.2 3.3 3.1 4.2
Other teaching.............. 8.4 7.3 5.6 4.4 4.3 4.5 4.4 4.7 4.4 4.7 5.3 6.2
Nonteaching................. 7.3 6.4 4.5 3.8 3.6 3.9 4.4 4.8 4.9 4.9 5.9 6.4
Disproportionate share:
Large urban............. 6.6 5.7 3.2 2.4 2.2 2.0 1.3 3.1 3.0 3.5 3.7 4.3
Other urban............. 7.9 7.1 5.4 4.7 4.6 4.7 5.3 5.9 5.8 5.4 6.2 7.0
Rural................... 5.8 5.7 2.5 2.8 3.5 4.4 5.7 7.4 7.7 6.0 6.0 7.8
Nondisproportionate share... 7.7 7.0 4.9 4.2 4.2 4.4 4.5 4.6 4.4 4.6 5.4 8.2
Teaching and DSH............ 6.7 6.1 3.6 3.0 2.9 3.0 2.4 4.0 3.9 4.0 4.1 4.9
Teaching only............... 9.0 8.5 5.9 4.7 5.0 4.6 4.5 4.7 3.9 4.4 5.1 6.5
DSH only.................... 7.7 6.5 4.6 3.7 3.5 3.4 4.2 5.1 5.2 5.1 6.3 6.8
No teaching or DSH.......... 7.0 6.2 4.4 4.0 3.7 4.3 4.5 4.5 4.7 4.7 5.5 6.1
Voluntary................... 7.7 7.0 4.9 3.8 3.8 3.9 3.9 4.3 4.0 4.1 4.8 5.7
Proprietary................. 8.8 7.5 5.6 4.6 3.6 2.9 3.9 5.2 6.6 7.2 9.6 9.3
Urban government............ 4.4 4.4 0.9 2.3 2.2 2.5 1.7 4.4 4.2 4.4 3.4 4.4
Rural government............ 4.6 2.9 2.0 1.5 2.4 3.3 4.0 4.8 5.2 4.5 4.7 5.7
All hospitals......... 7.3 6.6 4.3 3.6 3.5 3.6 3.6 4.4 4.3 4.5 5.0 5.8
----------------------------------------------------------------------------------------------------------------
Note.--Data are percentages. Data on total revenues and expenses are for hospital accounting years beginning
during each Federal fiscal year. Hospitals in Massachusetts and New York excluded from data in 1984 and 1985;
hospitals in New Jersey excluded from data in 1984-88; hospitals in Maryland excluded from data in all years.
Source: ProPAC analysis of Medicare Cost Report data from the Health Care Financing Administration.
Additional Hospital Data
Table D-16 displays summary characteristics of hospitals
participating in the Medicare prospective payment system. These
data are derived from PPS payment simulations by CBO. Table D-
17 provides historical trends in factors affecting PPS rates
and average payments per case, based on data and estimates
provided by HCFA's Office of the Actuary.
TABLE D-16.--FACTORS AFFECTING FISCAL YEAR 1997 PPS OPERATING PAYMENTS PER CASE, BY HOSPITAL GROUP
--------------------------------------------------------------------------------------------------------------------------------------------------------
Other Average
Number of Number of Average Average payment Base case- Outlier IME/ PPS
Hospital group PPS PPS standardized wage rate payment mix factor DSH payments
hospitals discharges amount index factors rate index factor per case
--------------------------------------------------------------------------------------------------------------------------------------------------------
Urban............................................. 2,832 8,662,319 $3,882 1.02 1.00 $3,935 1.50 1.06 1.17 $7,281
Rural............................................. 2,243 2,139,471 3,847 0.79 1.04 3,416 1.21 1.03 1.02 4,392
Large urban....................................... 1,567 4,923,543 3,908 1.09 1.00 4,137 1.50 1.06 1.19 7,836
Other urban....................................... 1,265 3,738,776 3,847 0.93 1.00 3,671 1.50 1.06 1.13 6,550
Rural referral.................................... 130 407,577 3,847 0.79 1.07 3,510 1.37 1.03 1.04 5,261
Sole community.................................... 648 465,468 3,847 0.80 1.09 3,631 1.16 1.01 1.02 4,476
Other rural....................................... 1,465 1,266,426 3,847 0.78 1.01 3,294 1.18 1.03 1.02 4,081
Major teaching.................................... 263 1,304,199 3,895 1.12 1.00 4,208 1.66 1.07 1.49 11,083
Other teaching.................................... 811 3,437,521 3,879 1.00 1.00 3,880 1.55 1.06 1.14 7,225
Nonteaching....................................... 4,001 6,060,070 3,868 0.93 1.01 3,746 1.33 1.04 1.05 5,474
Disproportionate share:
Large urban................................... 786 2,659,569 3,908 1.10 1.00 4,168 1.52 1.06 1.31 8,747
Other urban................................... 679 2,396,608 3,847 0.92 1.00 3,645 1.52 1.06 1.18 6,919
Rural......................................... 448 582,226 3,847 0.76 1.03 3,324 1.21 1.03 1.07 4,504
Nondisproportionate share......................... 3,162 5,163,387 3,874 0.96 1.01 3,833 1.39 1.05 1.04 5,810
Teaching and DSH.................................. 701 3,102,055 3,883 1.03 1.00 3,963 1.59 1.06 1.32 8,817
Teaching only..................................... 373 1,639,665 3,885 1.04 1.01 4,004 1.56 1.06 1.10 7,283
DSH only.......................................... 1,212 2,536,348 3,867 0.94 1.00 3,719 1.37 1.05 1.11 5,960
No teaching or DSH................................ 2,789 3,523,722 3,869 0.93 1.01 3,741 1.31 1.04 1.00 5,125
Urban, less than 100 beds......................... 700 481,873 3,877 1.00 0.99 3,861 1.21 1.04 1.01 4,915
Urban, 100-199.................................... 925 1,898,324 3,881 1.03 1.00 3,938 1.36 1.04 1.11 6,198
Urban, 200-299.................................... 567 2,195,938 3,880 1.02 1.00 3,931 1.47 1.05 1.11 6,752
Urban, 300-399.................................... 316 1,645,493 3,880 1.01 1.00 3,902 1.55 1.06 1.16 7,451
Urban, 400-499.................................... 157 964,132 3,884 1.02 1.00 3,945 1.59 1.06 1.23 8,210
Urban, 500+ beds.................................. 167 1,476,559 3,887 1.04 1.00 3,994 1.70 1.07 1.30 9,438
Rural, less than 50 beds.......................... 1,175 422,328 3,847 0.79 1.01 3,304 1.06 1.01 1.01 3,605
Rural, 50-99...................................... 656 653,095 3,847 0.79 1.03 3,383 1.16 1.02 1.01 4,079
Rural, 100-149.................................... 240 466,878 3,847 0.79 1.05 3,437 1.26 1.03 1.02 4,581
Rural, 150-199.................................... 97 274,834 3,847 0.79 1.05 3,433 1.27 1.04 1.03 4,712
Rural, 200+ beds.................................. 75 322,336 3,847 0.78 1.08 3,528 1.39 1.04 1.06 5,511
New England....................................... 213 600,267 3,887 1.14 1.00 4,299 1.42 1.04 1.17 7,439
Middle Atlantic................................... 519 1,849,999 3,888 1.10 1.00 4,197 1.42 1.07 1.21 7,704
South Atlantic.................................... 719 1,936,834 3,868 0.91 1.01 3,654 1.46 1.05 1.13 6,342
East North Central................................ 796 1,919,107 3,876 0.96 1.01 3,813 1.43 1.05 1.13 6,479
East South Central................................ 441 914,371 3,855 0.81 1.01 3,377 1.38 1.06 1.11 5,490
West North Central................................ 704 844,212 3,865 0.86 1.02 3,568 1.44 1.04 1.10 5,901
West South Central................................ 726 1,147,927 3,867 0.85 1.01 3,494 1.45 1.06 1.13 6,080
Mountain.......................................... 338 458,342 3,873 0.94 1.02 3,795 1.48 1.04 1.09 6,400
Pacific........................................... 619 1,130,731 3,887 1.20 1.00 4,453 1.49 1.04 1.16 8,063
Voluntary......................................... 2,946 8,004,924 3,877 1.00 1.01 3,905 1.46 1.05 1.14 6,852
Proprietary....................................... 692 1,206,343 3,875 0.95 1.01 3,770 1.44 1.05 1.09 6,254
Urban government.................................. 420 920,619 3,874 0.99 1.00 3,837 1.48 1.06 1.32 7,995
Rural government.................................. 966 657,913 3,847 0.77 1.02 3,306 1.15 1.03 1.02 4,030
All hospitals............................... 5,075 10,801,790 3,875 0.98 1.01 3,856 1.44 1.05 1.15 6,709
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Congressional Budget Office estimates based on data from the Health Care Financing Administration.
TABLE D-17.--TRENDS IN FACTORS AFFECTING PPS RATES AND AVERAGE PAYMENTS PER CASE, FISCAL YEARS 1983-98
[Percentage change from previous year]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Fiscal year
Rate impact factor -------------------------------------------------------------------------------------------------------------------------------
1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Market basket index \1\......................................... 5.5 4.9 4.1 2.9 3.2 4.7 5.4 5.5 5.2 \2\ 4.
4 \3\ 4.
1 4.3 \4\ 3.
6 \5\ 3.
5 2.5 2.8
Annual update factor \6\........................................ ...... ...... ...... ...... ...... 1.7 3.33 5.71 2.83 2.90 2.75 2.11 1.89 1.64 2.0 3.1
Case-mix index \7\.............................................. ...... ...... 3.1 2.5 2.1 3.2 2.5 0.85 2.5 1.5 0.85 0.85 1.00 1.50 1.50 1.0
Average payments per discharge \8\.............................. 10.2 10.8 15.0 8.0 3.6 5.0 10.1 8.4 7.2 8.9 4.6 2.5 6.1 6.7 2.9 4.8
Average payments per beneficiary \8\............................ 11.4 7.8 6.6 1.5 -0.3 3.9 6.5 8.0 5.9 11.5 4.0 5.9 4.3 7.4 3.9 5.9
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Estimates as published in the Federal Register for fiscal years 1983-97; fiscal year 1998 President's Budget assumptions shown for fiscal year 1998.
\2\ 4.7 for hospitals excluded from the prospective payment system.
\3\ 4.2 for hospitals excluded from the prospective payment system.
\4\ 3.7 for hospitals excluded from the prospective payment system.
\5\ 3.4 for hospitals excluded from the prospective payment system.
\6\ Estimates as published in the Federal Register for fiscal years 1989-97; fiscal year 1997 President's Budget assumptions used for fiscal year 1998.
\7\ Estimates based on historical data for fiscal years 1985-97; fiscal year 1998 President's Budget assumptions shown for fiscal years 1996-98.
\8\ Estimates based on historical data and fiscal year 1997 President's Budget assumptions; estimates for fiscal years 1989 and 1990 include the effect of provisions of the Medicare
Catastrophic Coverage Act of 1988.
Source: Health Care Financing Administration, Office of the Actuary.
TABLE D-18.--WAGE INDEX FOR URBAN AREAS, FISCAL YEAR 1996
------------------------------------------------------------------------
Urban area (constituent counties or county equivalents) Wage index
------------------------------------------------------------------------
Abilene, TX (Taylor, TX)................................... 0.8287
Aguadilla, PR (Aquada, PR, Aguadilla, PR, Moca, PR)........ 0.4224
Akron, OH (Portage, OH, Summit, OH)........................ 0.9728
Albany, GA (Dougherty, GA, Lee, GA)........................ 0.7914
Albany-Schenectady-Troy, NY (Albany, NY, Montgomery, NY,
Rensselaer, NY, Saratoga, NY, Schenectady, NY, Schoharie,
NY)....................................................... 0.8480
Albuquerque, NM (Bernalillo, NM, Sandoval, NM, Valencia,
NM)....................................................... 0.9329
Alexandria, LA (Rapides, LA)............................... 0.8269
Allentown-Bethlehem-Easton, PA (Carbon, PA, Lehigh, PA,
Northampton, PA).......................................... 1.0086
Altoona, PA (Blair, PA).................................... 0.9137
Amarillo, TX (Potter, TX, Randall, TX)..................... 0.9425
Anchorage, AK (Anchorage, AK).............................. 1.2998
Ann Arbor, MI (Lenawee, MI, Livingston, MI, Washtenaw, MI). 1.1785
Anniston, AL (Calhourn, AL)................................ 0.8266
Appleton-Oshkosh-Neenah, WI (Calumet, WI, Outagami, WI,
Winnebago, WI)............................................ 0.8996
Arecibo, PR (Arecibo, PR, Camuy, PR, Hatillo, PR).......... 0.4224
Asheville, NC (Buncombie, NC, Madison, NC)................. 0.9072
Athens, GA (Clarke, GA, Madison, GA, Oconee, GA)........... 0.9087
Atlanta, GA (Barrow, GA, Bartow, GA, Carroll, GA, Cherokee,
GA, Clayton, GA, Cobb, GA, Coweta, GA, DeKalb, GA,
Douglas, GA, Fayette, GA, Forsyth, GA, Fulton, GA,
Gwinnett, GA, Henry, GA, Newton, GA, Paulding, GA,
Pickens, GA, Rockdale, GA, Spalding, GA, Walton, GA)...... 0.9823
Atlantic City-Cape May, NJ (Atlantic City, NJ, Cape May,
NJ)....................................................... 1.0724
Augusta-Aiken, GA-SC (Columbia, GA, McDuffie, GA, Richmond,
GA, Aiken, SC, Edgefield, SC)............................. 0.9333
Austin-San Marcos, TX (Bastrop, TX, Caldwell, TX, Hays, TX,
Travis, TX, Williamson, TX)............................... 0.9133
Bakersfield, CA (Kern, CA)................................. 1.0014
Baltimore, MD (Anne Arundel, MD, Baltimore, MD, Baltimore
City, MD, Carroll, MD, Harford, MD, Howard, MD, Queen
Annes, MD)................................................ 0.9689
Bangor, ME (Penobscot, ME)................................. 0.9478
Barnstable-Yarmouth, MA (Barnstable, MA)................... 1.4291
Baton Rouge, LA (Ascension, LA, East Baton Rouge, LA,
Livingston, LA, West Baton Rouge, LA)..................... 0.8382
Beaumont-Port Arthur, TX (Hardin, TX, Jefferson, TX,
Orange, TX)............................................... 0.8593
Bellingham, WA (Whatcom, WA)............................... 1.1221
Benton Harbor, MI (Berrien, MI)............................ 0.8923
Bergen-Passaic, NJ (Bergen, NJ, Passaic, NJ)............... 1.1570
Billings, MT (Yellowstone, MT)............................. 0.9783
Biloxi-Gulfport-Pascagoula, MS (Hancock, MS, Harrison, MS,
Jackson, MS).............................................. 0.8415
Binghamton, NY (Broome, NY, Tioga, NY)..................... 0.8914
Birmingham, AL (Blount, AL, Jefferson, AL, St. Clair, AL,
Shelby, AL)............................................... 0.9005
Bismark, ND (Burleigh, ND, Morton, ND)..................... 0.7859
Bloomington, IN (Monroe, IN)............................... 0.9128
Bloomington-Normal, IL (McLean, IL)........................ 0.8733
Boise City, ID (Ada, ID, Canyon, ID)....................... 0.8887
Boston-Brockton-Nashua, MA-NH (Bristol, MA, Essex, MA,
Middlesex, MA, Norfolk, MA, Plymouth, MA, Suffolk, MA,
Worcester, MA, Hillsborough, NH, Merrimack, NH,
Rockingham, NH, Strafford, NH)............................ 1.1436
Boulder-Longmont, CO (Boulder, CO)......................... 1.0015
Brazoria, TX (Brazoria, TX)................................ 0.9129
Bremerton, WA (Kitsap, WA)................................. 1.0999
Brownsville-Harlingen-San Benito, TX (Cameron, TX)......... 0.8740
Bryan-College Station, TX (Brazos, TX)..................... 0.8571
Buffalo-Niagara Falls, NY (Erie, NY, Niagara, NY).......... 0.9272
Burlington, VT (Chittenden, VT, Franklin, VT, Grand Isle,
VT)....................................................... 1.0142
Caguas, PR (Caguas, PR, Cayey, PR, Cidra, PR, Gurabo, PR,
San Lorenzo, PR).......................................... 0.4508
Canton-Massilon, OH (Carroll, OH, Stark, OH)............... 0.8961
Casper, WY (Natrona, WY)................................... 0.9013
Cedar Rapids, IA (Linn, IA)................................ 0.8529
Champaign-Urbana, IL (Champaign, IL)....................... 0.8824
Charleston-North Charleston, SC (Berkeley, SC, Charleston,
SC, Dorchester, SC)....................................... 0.8807
Charleston, WV (Kanawha, WV, Putnam, WV)................... 0.9142
Charlotte-Gastonia-Rock Hill, NC-SC (Cabarrus, NC, Gaston,
NC, Lincoln, NC, Mecklenburg, NC, Rowan, NC, Stanly, NC,
Union, NC, York, SC)...................................... 0.9710
Charlottesville, VA (Albemarle, VA, Charlottesville City,
VA, Fluvanna, VA, Greene, VA)............................. 0.9051
Chattanooga, TN-GA (Catoosa, GA, Dade, GA, Walker, GA,
Hamilton, TN, Marion, TN)................................. 0.8658
Cheyenne, WY (Laramie, WY)................................. 0.8247
Chicago, IL (Cook, IL, DeKalb, IL, Du Page, IL, Grundy, IL,
Kane, IL, Kendall, IL, Lake, IL, McHenry, IL, Will, IL)... 1.0860
Chico-Paradise, CA (Butte, CA)............................. 1.0429
Cincinnati, OH-KY-IN (Dearborn, IN, Ohio, IN, Boone, KY,
Campbell, KY, Gallatin, KY, Grant, KY, Kenton, KY,
Pendleton, KY, Brown, OH, Clermont, OH, Hamilton, OH,
Warren, OH)............................................... 0.9521
Clarksville-Hopkinsville, TN-KY (Christian, KY, Montgomery,
TN)....................................................... 0.7852
Cleveland-Lorain-Elyria, OH (Ashtabula, OH, Cuyahoga, OH,
Geauga, OH, Lake, OH, Lorain, OH, Medina, OH)............. 0.9804
Colorado Springs, CO (El Paso, CO)......................... 0.9316
Columbia, MO (Boone, MO)................................... 0.9001
Columbia, SC (Lexington, SC, Richland, SC)................. 0.9192
Columbus, GA-AL (Russell, AL, Chattahoochee, GA, Harris,
GA, Muscogee GA).......................................... 0.8288
Columbus, OH (Delaware, OH, Fairfield, OH, Franklin, OH,
Licking, OH, Madison, OH, Pickaway, OH)................... 0.9793
Corpus Christi, TX (Nueces, TX, San Patricio, TX).......... 0.8945
Cumberland, MD-WV (Allegany, MD, Mineral, WV).............. 0.8822
Dallas, TX (Collin, TX, Dallas, TX, Denton, TX, Ellis, TX,
Henderson, TX, Hunt, TX, Kaufman, TX, Rockwall, TX)....... 0.9674
Danville, VA (Danville City, VA, Pittsylvania, VA)......... 0.8146
Davenport-Rock Island-Moline, IA-IL (Scott, IA, Henry, IL,
Rock Island, IL).......................................... 0.8405
Dayton-Springfield, OH (Clark, OH, Greene, OH, Miami, OH,
Montgomery, OH)........................................... 0.9279
Daytona Beach, FL (Flagler, FL, Volusia, FL)............... 0.8838
Decatur, AL (Lawrence, AL, Morgan, AL)..................... 0.8286
Decatur, IL (Macon, IL).................................... 0.7915
Denver, CO (Adams, CO, Arapahoe, CO, Denver, CO, Douglas,
CO, Jefferson, CO)........................................ 1.0386
Des Moines, IA (Dallas, IA, Polk, IA, Warren, IA).......... 0.8837
Detroit, MI (Lapeer, MI, Macomb, MI, Monroe, MI, Oakland,
MI, St. Clair, MI, Wayne, MI)............................. 1.0840
Dothan, AL (Dale, AL, Houston, AL)......................... 0.8070
Dover, DE (Kent, DE)....................................... 0.9303
Dubuque, IA (Dubuque, IA).................................. 0.8088
Duluth-Superior, MN-WI (St. Louis, MN, Douglas, WI)........ 0.9779
Dutchess County, NY (Dutchess, NY)......................... 1.0632
Eau Claire, WI (Chippewa, WI, Eau Claire, WI).............. 0.8764
El Paso, TX (El Paso, TX).................................. 1.0123
Elkhart-Goshen, IN (Elkhart, IN)........................... 0.9081
Elmira, NY (Chemung, NY)................................... 0.8401
Enid, OK (Garfield, OK).................................... 0.7962
Erie, PA (Erie, PA)........................................ 0.8862
Eugene-Springfield, OR (Lane, OR).......................... 1.1659
Evansville, IN-KY (Posey, IN, Vanderburgh, IN, Warrick, IN,
Henderson, KY)............................................ 0.8641
Fargo-Moorhead, ND-MN (Clay, MN, Cass, ND)................. 0.8837
Fayetteville, NC (Cumberland, NC).......................... 0.8734
Fayetteville-Springdale-Rogers, AR (Benton, AR, Washington,
AR)....................................................... 0.7461
Flagstaff, AZ-UT (Coconino, AZ, Kane, UT).................. 0.9115
Flint, MI (Genesee, MI).................................... 1.1171
Florence, AL (Colbert, AL, Lauderdale, AL)................. 0.7716
Florence, SC (Florence, SC)................................ 0.8711
Fort Collins-Loveland, CO (Larimer, CO).................... 1.0248
Fort Lauderdale, FL (Broward, FL).......................... 1.0487
Fort Myers-Cape Coral, FL (Lee, FL)........................ 0.8838
Fort Pierce-Port St. Lucie, FL (Martin, FL, St. Lucie, FL). 1.0257
Fort Smith, AR-OK (Crawford, AR, Sebastian, AR, Sequoyah,
OK)....................................................... 0.7769
Fort Walton Beach, FL (Okaloosa, FL)....................... 0.8838
Fort Wayne, IN (Adams, IN, Allen, IN, De Kalb, IN,
Huntington, IN, Wells, IN, Whitley, IN)................... 0.8901
Fort Worth-Arlington, TX (Hood, TX, Johnson, TX, Parker,
TX, Tarrant, TX).......................................... 0.9997
Fresno, CA (Fresno, CA, Madera, CA)........................ 1.0607
Gadsden, AL (Etowah, AL)................................... 0.8815
Gainesville, FL (Alachua, FL).............................. 0.9616
Galveston-Texas City, TX (Galveston, TX)................... 1.0564
Gary, IN (Lake, IN, Porter, IN)............................ 0.9270
Glens Falls, NY (Warren, NY, Washington, NY)............... 0.8401
Goldsboro, NC (Wayne, NC).................................. 0.8443
Grand Forks, ND-MN (Polk, MN, Grand Forks, ND)............. 0.8815
Grand Junction, CO (Mesa, CO).............................. 0.9491
Grand Rapids-Muskegon-Holland, MI (Allegan, MI, Kent, MI,
Muskegon, MI, Ottawa, MI)................................. 1.0147
Great Falls, MT (Cascade, MT).............................. 0.9306
Greeley, CO (Weld, CO)..................................... 1.0097
Green Bay, WI (Brown, WI).................................. 0.9585
Greensboro-Winston-Salem-High Point, NC (Alamance, NC,
Davidson, NC, Davie, NC, Forsyth, NC, Guilford, NC,
Randolph, NC Stokes, NC, Yadkin, NC)...................... 0.9351
Greenville, NC (Pitt, NC).................................. 0.9064
Greenville-Spartanburg-Andersen, SC (Anderson, SC,
Cherokee, SC, Greenville, SC, Pickens, SC, Spartanburg,
SC)....................................................... 0.9059
Hagerstown, MD (Washington, MD)............................ 0.9681
Hamilton-Middletown, OH (Butler, OH)....................... 0.8767
Harrisburg-Lebanon-Carlisle, PA (Cumberland, PA, Dauphin,
PA, Lebanon, PA, Perry, PA)............................... 1.0187
Hartford, CT (Hartford, CT, Litchfield, CT, Middlesex, CT,
Tolland, CT).............................................. 1.2617
Hattiesburg, MS (Forrest, MS, Lamar, MS)................... 0.7192
Hickory-Morganton-Lenoir, NC (Alexander, NC, Burke, NC,
Caldwell, NC, Catawba, NC)................................ 0.8285
Honolulu, HI (Honolulu, HI)................................ 1.1817
Houma, LA (Lafourche, LA, Terrebonne, LA).................. 0.7854
Houston, TX (Chambers, TX, Fort Bend, TX, Harris, TX,
Liberty, TX, Montgomery, TX, Waller, TX).................. 0.9855
Huntington-Ashland, WV-KY-OH (Boyd, KY, Carter, KY,
Greenup, KY, Lawrence, OH, Cabell, WV, Wayne, WV)......... 0.9160
Huntsville, AL (Limestone, AL, Madison, AL)................ 0.8485
Indianapolis, IN (Boone, IN, Hamilton, IN, Hancock, IN,
Hendricks, IN, Johnson, IN, Madison, IN, Marion, IN,
Morgan, IN, Shelby, IN)................................... 0.9848
Iowa City, IA (Johnson, IA)................................ 0.9401
Jackson, MI (Jackson, MI).................................. 0.9052
Jackson, MS (Hinds, MS, Madison, MS, Rankin, MS)........... 0.7790
Jackson, TN (Madison, TN).................................. 0.8522
Jacksonville, FL (Clay, FL, Duval, FL, Nassau, FL, St.
Johns, FL)................................................ 0.8969
Jacksonville, NC (Onslow, NC).............................. 0.7939
Jamestown, NY (Chautauqua, NY)............................. 0.8401
Janesville-Beloit, WI (Rock, WI)........................... 0.8824
Jersey City, NJ (Hudson, NJ)............................... 1.1412
Johnson City-Kingsport-Bristol, TN-VA (Carter, TN, Hawkins,
TN, Sullivan, TN, Unicoi, TN, Washington, TN, Bristol
City, VA, Scott, VA, Washington, VA)...................... 0.9114
Johnstown, PA (Cambria, PA, Somerset, PA).................. 0.8421
Jonesboro, AR (Craighead, AR).............................. 0.7443
Joplin, MO (Jasper, MO, Newton, MO)........................ 0.7541
Kalamazoo-Battlecreek, MI (Calhoun, MI, Kalamazoo, MI, Van
Buren, MI)................................................ 1.0668
Kankakee, IL (Kankakee, IL)................................ 0.8653
Kansas City, KS-MO (Johnson, KS, Leavenworth, KS, Miami,
KS, Wyandotte, KS, Cass, MO, Clay, MO, Clinton, MO,
Jackson, MO, Lafayette, MO, Platte, MO, Ray, MO).......... 0.9564
Kenosha, WI (Kenosha, WI).................................. 0.9196
Killeen-Temple, TX (Bell, TX, Coryell, TX)................. 1.0252
Knoxville, TN (Anderson, TN, Blount, TN, Knox, TN, Loudon,
TN, Sevier, TN, Union, TN)................................ 0.8831
Kokomo, IN (Howard, IN, Tipton, IN)........................ 0.8416
La Crosse, WI-MN (Houston, MN, La Crosse, WI).............. 0.8749
LaFayette, LA (Acadia, LA, Lafayette, LA, St. Landry, LA,
St. Martin, LA)........................................... 0.8227
LaFayette, IN (Clinton, IN, Tippecanoe, IN)................ 0.9174
Lake Charles, LA (Calcasieu, LA)........................... 0.7776
Lakeland-Winter Haven, FL (Polk, FL)....................... 0.8838
Lancaster, PA (Lancaster, PA).............................. 0.9481
Lansing-East Lansing, MI (Clinton, MI, Eaton, MI, Ingham,
MI)....................................................... 1.0088
Laredo, TX (Webb, TX)...................................... 0.7404
Las Cruces, NM (Dona Ana, NM).............................. 0.8658
Las Vegas, NV-AZ (Mohave, AZ, Clark, NV, Nye, NV).......... 1.0592
Lawrence, KS (Douglas, KS)................................. 0.8608
Lawton, OK (Comanche, OK).................................. 0.9045
Lewiston-Auburn, ME (Androscoggin, ME)..................... 0.9536
Lexington, KY (Bourbon, KY, Clark, KY, Fayett, KY,
Jessamine, KY, Madison, KY, Scott, KY, Woodford, KY)...... 0.8416
Lima, OH (Allen, OH, Auglaize, OH)......................... 0.9185
Lincoln, NE (Lancaster, NE)................................ 0.9231
Little Rock-North Little Rock, AR (Faulkner, AR, Lonoke,
AR, Pulaski, AR, Saline, AR).............................. 0.8490
Longview-Marshall, TX (Gregg, TX, Harrison, TX, Upshur, TX) 0.8613
Los Angeles-Long Beach, CA (Los Angeles, CA)............... 1.2268
Louisville, KY-IN (Clark, IN, Floyd, IN, Harrison, IN,
Scott, IN, Bullitt, KY, Jefferson, KY, Oldham, KY)........ 0.9507
Lubbock, TX (Lubbock, TX).................................. 0.8400
Lynchburg, VA (Amherst, VA, Bedford City, VA, Bedford, VA,
Campbell, VA, Lynchburg City, VA)......................... 0.8228
Macon, GA (Bibb, GA, Houston, GA, Jones, GA, Peach, GA,
Twiggs, GA)............................................... 0.9227
Madison, WI (Dane, WI)..................................... 1.0055
Mansfield, OH (Crawford, OH, Richfield, OH)................ 0.8639
Mayaguez, PR (Anasco, PR, Cabo Rojo, PR, Hormigueros, PR,
Mayaguez, PR, Sabana Grande, PR, San German, PR).......... 0.4475
McAllen-Edinburg-Mission, TX (Hidalgo, TX)................. 0.8371
Medford-Ashland, OR (Jackson, OR).......................... 1.0354
Melbourne-Titusville-Palm Bay, FL (Brevard, FL)............ 0.8838
Memphis, TN-AR-MS (Crittenden, AR, De Soto, MS, Fayette,
TN, Shelby, TN, Tipton, TN)............................... 0.8589
Merced, CA (Merced, CA).................................... 1.0947
Miami, FL (Dade, FL)....................................... 0.9859
Middlesex-Somerset-Hunterdon, NJ (Hunterdon, NJ, Middlesex,
NJ, Somerset, NJ)......................................... 1.0875
Milwaukee, WI (Milwaukee, WI, Ozaukee, WI, Washington, WI,
Waukesha, WI)............................................. 0.9819
Minneapolis-St. Paul, MN-WI (Anoka, MN, Carver, MN,
Chisago, MN, Dakota, MN, Hennepin, MN, Isanti, MN, Ramsey,
MN, Scott, MN, Sherburne, MN, Washington, MN, Wright, MN,
Pierce, WI, St. Croix, WI)................................ 1.0733
Mobile, AL (Baldwin, AL, Mobile, AL)....................... 0.8455
Modesto, CA (Stanislaus, CA)............................... 1.0377
Monmouth-Ocean, NJ (Monmouth, NJ, Ocean, NJ)............... 1.0934
Monroe, LA (Ouachita, LA).................................. 0.8414
Montgomery, AL (Autauga, AL, Elmore, AL, Montgomery, AL)... 0.7813
Muncie, IN (Delaware, IN).................................. 0.9173
Myrtle Beach, SC (Horry, SC)............................... 0.8072
Naples, FL (Collier, FL)................................... 1.0109
Nashville, TN (Cheatham, TN, Davidson, TN, Dickson, TN,
Robertson, TN, Rutherford, TN, Sumner, TN, Williamson, TN,
Wilson, TN)............................................... 0.9182
Nassau-Suffolk, NY (Nassau, NY, Suffolk, NY)............... 1.3807
New Haven-Bridgeport-Stamford-Danbury-Waterbury, CT
(Fairfield, CT, New Haven, CT)............................ 1.2619
New London-Norwich, CT (New London, CT).................... 1.2617
New Orleans, LA (Jefferson, LA, Orleans, LA, Plaquemines,
LA, St. Bernard, LA, St. Charles, LA, St. James, LA, St.
John the Baptist, LA, St. Tammany, LA).................... 0.9566
New York, NY (Bronx, NY, Kings, NY, New York, NY, Putnam,
NY, Queens, NY, Richmond, NY, Rockland, NY, Westchester,
NY)....................................................... 1.3982
Newark, NJ (Essex, NJ, Morris, NJ, Sussex, NJ, Union, NJ,
Warren, NJ)............................................... 1.1111
Newburgh, NY-PA (Orange, NY, Pike, PA)..................... 1.1283
Norfolk-Virginia Beach-Newport News, VA-NC (Currituck, NC,
Chesapeake City, VA, Gloucester, VA, Hampton City, VA,
Isle of Wight, VA, James City, VA, Mathews, VA, Newport
News City, VA, Norfolk City, VA, Poquoson City, VA,
Portsmouth City, VA, Suffolk City, VA, Virginia Beach
City, VA, Williamsburg City, VA, York, VA)................ 0.8316
Oakland, CA (Alameda, CA, Contra Costa, CA)................ 1.5158
Ocala, FL (Marion, FL)..................................... 0.9032
Odessa-Midland, TX (Ector, TX, Midland, TX)................ 0.8660
Oklahoma City, OK (Canadian, OK, Cleveland, OK, Logan, OK,
McClain, OK, Oklahoma, OK, Pottawatomie, OK).............. 0.8481
Olympia, WA (Thurston, WA)................................. 1.0901
Omaha, NE-IA (Pottawattamie, IA, Cass, NE, Douglas, NE,
Sarpy, NE, Washington, NE)................................ 0.9421
Orange County, CA (Orange, CA)............................. 1.1532
Orlando, FL, (Lake, FL, Orange, FL, Osceola, FL, Seminole,
FL)....................................................... 0.9397
Owensboro, KY (Daviess, KY)................................ 0.7772
Panama City, FL (Bay, FL).................................. 0.8838
Parkersburg-Marietta, WV-OH (Washington, OH, Wood, WV)..... 0.8046
Pensacola, FL (Escambia, FL, Santa Rosa, FL)............... 0.8838
Peoria-Pekin, IL (Peoria, IL, Tazewell, IL, Woodford, IL).. 0.8586
Philadelphia, PA-NJ (Burlington, NJ, Camden, NJ,
Gloucester, NJ, Salem, NJ, Bucks, PA, Chester, PA,
Delaware, PA, Montgomery, PA, Philadelphia, PA)........... 1.1379
Phoenix-Mesa, AZ (Maricopa, AZ, Pinal, AZ)................. 0.9606
Pine Bluff, AR (Jefferson, AR)............................. 0.7826
Pittsburgh, PA (Allegheny, PA, Beaver, PA, Butler, PA,
Fayette, PA, Washington, PA, Westmoreland, PA)............ 0.9725
Pittsfield, MA (Berkshire, MA)............................ 1.0960
Pocatello, ID (Bannock, ID)................................ 0.9586
Ponce, PR (Guayanilla, PR, Juana Diaz, PR, Penuelas, PR,
Ponce, PR, Villalba, PR, Yauco, PR)....................... 0.4589
Portland, ME (Cumberland, ME, Sagadahoc, ME, York, ME).... 0.9627
Portland-Vancouver, OR-WA (Clackamas, OR, Columbia, OR,
Multnomah, OR, Washington, OR, Yamhill, OR, Clark, WA).... 1.1344
Providence-Warwick, RI (Bristol, RI, Kent, RI, Newport,
RI, Providence, RI, Washington, RI)....................... 1.1049
Provo-Orem, UT (Utah, UT)................................. 1.0073
Pueblo, CO (Pueblo, CO).................................... 0.8450
Punta Gorda, FL (Charlotte, FL)............................ 0.8838
Racine, WI (Racine, WI).................................... 0.8934
Raleigh-Durham-Chapel Hill, NC (Chatham, NC, Durham, NC,
Franklin, NC, Johnston, NC, Orange, NC, Wake, NC)......... 0.9818
Rapid City, SD (Pennington, SD)............................ 0.8345
Reading, PA (Berks, PA).................................... 0.9516
Redding, CA (Shasta, CA)................................... 1.1790
Reno, NV (Washoe, NV)...................................... 1.0768
Richland-Kennewick-Pasco, WA (Benton, WA, Franklin, WA).... 1.0221
Richmond-Petersburg, VA (Charles City County, VA,
Chesterfield, VA, Colonial Heights City, VA, Dinwiddie,
VA, Goochland, VA, Hanover, VA, Henrico, VA, Hopewell
City, VA, New Kent, VA, Petersburg City, VA, Powhatan, VA,
Prince George, VA, Richmond City, VA)..................... 0.9152
Riverside-San Bernardino, CA (Riverside, CA, San
Bernardino, CA)........................................... 1.1145
Roanoke, VA (Botetourt, VA, Roanoke, VA, Roanoke City, VA,
Salem City, VA)........................................... 0.8402
Rochester, MN (Olmstead, MN)............................... 1.0502
Rochester, NY (Genesee, NY, Livingston, NY, Monroe, NY,
Ontario, NY, Orleans, NY, Wayne, NY)...................... 0.9524
Rockford, IL (Boone, IL, Ogle, IL, Winnebago, IL).......... 0.9081
Rocky Mount, NC (Edgecombe, NC, Nash, NC).................. 0.9029
Sacramento, CA (El Dorado, CA, Placer, CA, Sacramento, CA). 1.2202
Saginaw-Bay City-Midland, MI (Bay, MI, Midland, MI,
Saginaw, MI).............................................. 0.9564
St. Cloud, MN (Benton, MN, Stearns, MN).................... 0.9544
St. Joseph, MO (Andrews, MO, Buchanan, MO)................. 0.8366
St. Louis, MO-IL (Clinton, IL, Jersey, IL, Madison, IL,
Monroe, IL, St. Clair, IL, Franklin, MO, Jefferson, MO,
Lincoln, MO, St. Charles, MO, St. Louis, MO, St. Louis
City, MO, Warren, MO)..................................... 0.9130
Salem, OR (Marion, OR, Polk, OR)........................... 0.9976
Salinas, CA (Monterey, CA)................................. 1.4513
Salt Lake City-Ogden, UT (Davis, UT, Salt Lake, UT, Weber,
UT)....................................................... 0.9862
San Angelo, TX (Tom Green, TX)............................. 0.7780
San Antonio, TX (Bexar, TX, Comal, TX, Guadalupe, TX,
Wilson, TX)............................................... 0.8499
San Diego, CA (San Diego, CA).............................. 1.2225
San Francisco, CA (Marin, CA, San Francisco, CA, San Mateo,
CA)....................................................... 1.4091
San Jose, CA (Santa Clara, CA)............................. 1.4332
San Juan-Bayamon, PR (Aguas Buenas, PR, Barceloneta, PR,
Bayamon, PR, Canovanas, PR, Carolina, PR, Catano, PR,
Ceiba, PR, Comerio, PR, Corozal, PR, Dorado, PR, Fajardo,
PR, Florida, PR, Guaynabo, PR, Humacao, PR, Juncos, PR,
Los Piedras, PR, Loiza, PR, Luguillo, PR, Manati, PR,
Naranjito, PR, Rio Grande, PR, San Juan, PR, Toa Alta, PR,
Toa Baja, PR, Trujillo Alto, PR, Vega Alta, PR, Vega Baja,
PR, Yabucoa, PR).......................................... 0.4618
San Luis Obispo-Atascadero-Pasa Robles, CA (San Luis
Obispo, CA)............................................... 1.1374
Santa Barbara-Santa Maria-Lompoc, CA (Santa Barbara, CA)... 1.0688
Santa Cruz-Watsonville, CA (Santa Cruz, CA)................ 1.4187
Santa Fe, NM (Los Alamos, NM, Santa Fe, NM)................ 1.0332
Santa Rosa, CA (Sonoma, CA)................................ 1.2267
Sarasota-Bradenton, FL (Manatee, FL, Sarasota, FL)......... 0.9757
Savannah, GA (Bryan, GA, Chatham, GA, Effingham, GA)....... 0.8638
Scranton-Wilkes Barre-Hazleton, PA (Columbia, PA,
Lackawanna, PA, Luzerne, PA, Wyoming, PA)................. 0.8539
Seattle-Bellevue-Everett, WA (Island, WA, King, WA,
Snohomish, WA)............................................ 1.1375
Sharon, PA (Mercer, PA).................................... 0.8783
Sheboygan, WI (Sheboygan, WI).............................. 0.8471
Sherman-Denison, TX (Grayson, TX).......................... 0.8499
Shreveport-Bossier City, LA (Bossier, LA, Caddo, LA,
Webster, LA).............................................. 0.9381
Sioux City, IA-NE (Woodbury, IA, Dakota, NE)............... 0.8031
Sioux Falls, SD (Lincoln, SD, Minnehaha, SD)............... 0.8712
South Bend, IN (St. Joseph, IN)............................ 0.9880
Spokane, WA (Spokane, WA).................................. 1.0486
Springfield, IL (Menard, IL, Sangamon, IL)................. 0.8713
Springfield, MO (Christian, MO, Greene, MO, Webster, MO)... 0.8036
Springfield, MA (Hampden, MA, Hampshire, MA)............... 1.0718
State College, PA (Centre, PA)............................. 0.9635
Steubenville-Weirton, OH-WV (Jefferson, OH, Brook, WV,
Hancock, WV).............................................. 0.8645
Stockton-Lodi, CA (San Joaquin, CA)........................ 1.1518
Sumter, SC (Sumter, SC).................................... 0.7921
Syracuse, NY (Cayuga, NY, Madison, NY, Onondaga, NY,
Oswego, NY)............................................... 0.9480
Tacoma, WA (Pierce, WA).................................... 1.1016
Tallahassee, FL (Gadsden, FL, Leon, FL).................... 0.8838
Tampa-St. Petersburg-Clearwater, FL (Hernando, FL,
Hillsborough, FL, Pasco, FL, Pinellas, FL)................ 0.9196
Terre-Haute, IN (Clay, IN, Vermillion, IN, Vigo, IN)....... 0.8614
Texarkana, AK-Texarkana, TX (Miller, AR, Bowie, TX)........ 0.8699
Toledo, OH (Fulton, OH, Lucas, OH, Wood, OH)............... 1.0140
Topeka, KS (Shawnee, KS)................................... 0.9438
Trenton, NJ (Mercer, NJ)................................... 1.0380
Tucson, AZ (Pima, AZ)...................................... 0.9180
Tulsa, OK (Creek, OK, Osage, OK, Rogers, OK, Tulsa, OK,
Wagoner, OK).............................................. 0.8074
Tuscaloosa, AL (Tuscaloosa, AL)............................ 0.8187
Tyler, TX (Smith, TX)...................................... 0.9567
Utica-Rome, NY (Herkimer, NY, Oneida, NY).................. 0.8401
Vallejo-Fairfield-Napa, CA (Napa, CA, Solano, CA).......... 1.3528
Ventura, CA (Ventura, CA).................................. 1.0544
Victoria, TX (Victoria, TX)................................ 0.8474
Vineland-Millville-Bridgeton, NJ (Cumberland, NJ).......... 1.0110
Visalia-Tulare-Porterville, CA (Tulare, CA)................ 0.9977
Waco, TX (McLennan, TX).................................... 0.7696
Washington, DC-MD-VA-WV (District of Columbia, DC, Calvert,
MD, Charles, MD, Frederick, MD, Montgomery, MD, Prince
Georges, MD, Alexandria City, VA, Arlington, VA, Clarke,
VA, Culpepper, VA, Fairfax, VA, Fairfax City, VA, Falls
Church City, VA, Fauquier, VA, Fredericksburg City, VA,
King George, VA, Loudoun, VA, Manassas City, VA, Manassas
Park City, VA, Prince William, VA, Spotsylvania, VA,
Stafford, VA, Warren, VA, Berkeley, WV, Jefferson, WV).... 1.0780
Waterloo-Cedar Falls, IA (Black Hawk, IA).................. 0.8643
Wausau, WI (Marathon, WI).................................. 1.0545
West Palm Beach-Boca Raton, FL (Palm Beach, FL)............ 1.0309
Wheeling, OH-WV (Belmont, OH, Marshall, WV, Ohio, WV)...... 0.7707
Wichita, KS (Butler, KS, Harvey, KS, Sedgwick, KS)......... 0.9403
Wichita Falls, TX (Archer, TX, Wichita, TX)................ 0.7646
Williamsport, PA (Lycoming, PA)............................ 0.8548
Wilmington-Newark, DE-MD (New Castle, DE, Cecil, MD)....... 1.1538
Wilmington, NC (New Hanover, NC, Brunswick, NC)............ 0.9322
Yakima, WA (Yakima, WA).................................... 1.0221
Yolo, CA (Yolo, CA)........................................ 1.1431
York, PA (York, PA)........................................ 0.9415
Youngstown-Warren, OH (Columbiana, OH, Mahoning, OH,
Trumbull, OH)............................................. 0.9937
Yuba City, CA (Sutter, CA, Yuba, CA)....................... 1.0324
Yuma, AZ (Yuma, AZ)........................................ 0.9732
------------------------------------------------------------------------
Source: Health Care Financing Administration.
TABLE D-19.--WAGE INDEX FOR RURAL AREAS, FISCAL YEAR 1998
------------------------------------------------------------------------
State Wage index State Wage index
------------------------------------------------------------------------
Alabama...................... 0.7260 Nebraska....... 0.7401
Alaska....................... 1.2302 Nevada......... 0.8914
Arizona...................... 0.7989 New Hampshire.. 0.9724
Arkansas..................... 0.6995 New Jersey..... (\1\)
California................... 0.9977 New Mexico..... 0.8110
Colorado..................... 0.8129 New York....... 0.8401
Connecticut.................. 1.2617 North Carolina. 0.7939
Delaware..................... 0.8925 North Dakota... 0.7360
Florida...................... 0.8838 Ohio........... 0.8434
Georgia...................... 0.7761 Oklahoma....... 0.7072
Hawaii....................... 1.0229 Oregon......... 0.9976
Idaho........................ 0.8221 Pennsylvania... 0.8421
Illinois..................... 0.7644 Puerto Rico.... 0.4224
Indiana...................... 0.8161 Rhode Island... (\1\)
Iowa......................... 0.7391 South Carolina. 0.7921
Kansas....................... 0.7203 South Dakota... 0.6983
Kentucky..................... 0.7772 Tennessee...... 0.7353
Louisiana.................... 0.7383 Texas.......... 0.7404
Maine........................ 0.8468 Utah........... 0.8926
Maryland..................... 0.8617 Vermont........ 0.9314
Massachusetts................ 1.0718 Virginia....... 0.7782
Michigan..................... 0.8923 Washington..... 1.0221
Minnesota.................... 0.8180 West Virginia.. 0.7966
Mississippi.................. 0.6911 Wisconsin...... 0.8471
Missouri..................... 0.7207 Wyoming........ 0.8247
Montana...................... 0.8302
------------------------------------------------------------------------
\1\ All counties within this State are classified as urban.
Source: Health Care Financing Administration.
TABLE D-20.--WAGE INDEX FOR HOSPITALS THAT ARE RECLASSIFIED, FISCAL YEAR
1996
------------------------------------------------------------------------
Area reclassified to Wage index
------------------------------------------------------------------------
Abilene, TX................................................ 0.8287
Albuquerque, NM............................................ 0.9329
Alexandria, LA............................................. 0.8269
Amarillo, TX............................................... 0.9277
Anchorage, AK.............................................. 1.2998
Asheville, NC.............................................. 0.9072
Athens, GA................................................. 0.9087
Atlanta, GA................................................ 0.9823
Austin-San Marcos, TX...................................... 0.9133
Bangor, ME................................................. 0.9478
Barnstable-Yarmouth, MA.................................... 1.3827
Baton Rouge, LA............................................ 0.8382
Benton Harbor, MI.......................................... 0.8923
Bergen-Passaic, NJ......................................... 1.1570
Billings, MT............................................... 0.9609
Birmingham, AL............................................. 0.9005
Bismarck, ND............................................... 0.7859
Boise City, ID............................................. 0.8887
Boston-Worcester-Lawrence-Lowel-Brockton, MA-NH............ 1.1436
Caguas, PR................................................. 0.4508
Casper, WY................................................. 0.9013
Champaign-Urbana, IL....................................... 0.8706
Charlotte-Gastonia-Rock Hill, NC........................... 0.9710
Charlottesville, VA........................................ 0.8885
Chattanooga, TN-GA......................................... 0.8658
Chicago, IL................................................ 1.0759
Cincinnati, OH-KY-IN....................................... 0.9521
Cleveland-Lorain-Elyria, OH................................ 0.9804
Columbia, MO............................................... 0.8759
Columbus, OH............................................... 0.9793
Dallas, TX................................................. 0.9674
Davenport-Rock Island-Moline, IA-IL........................ 0.8405
Denver, CO................................................. 1.0386
Des Moines, IA............................................. 0.8837
Detroit, MI................................................ 1.0840
Duluth-Superior, MN-WI..................................... 0.9779
Dutchess County, NY........................................ 1.0364
Eugene-Springfield, OR..................................... 1.1659
Fargo-Moorhead, ND-MN...................................... 0.8729
Fayetteville, NC........................................... 0.8491
Flint, MI.................................................. 1.1171
Florence, AL............................................... 0.7716
Florence, SC............................................... 0.8711
Fort Lauderdale, FL........................................ 1.0487
Fort Pierce-Port St. Lucie, FL............................. 1.0008
Fort Walton Beach, FL...................................... 0.8653
Fort Worth-Arlington, TX................................... 0.9997
Gadsden, AL................................................ 0.8815
Gainesville, FL............................................ 0.9616
Gary, IN................................................... 0.9114
Grand Forks, ND-MN......................................... 0.8815
Grand Junction, CO......................................... 0.9491
Great Falls, MT............................................ 0.9306
Greeley, CO................................................ 0.9791
Green Bay, WI.............................................. 0.9585
Greensboro-Winston-Salem-High Point, NC.................... 0.9351
Harrisburg-Lebanon-Carlisle, PA............................ 1.0076
Honolulu, HI............................................... 1.1817
Houma, LA.................................................. 0.7854
Houston, TX................................................ 0.9855
Huntington-Ashland, WV-KY-OH............................... 0.9160
Huntsville, AL............................................. 0.8485
Indianapolis, IN........................................... 0.9848
Iowa City.................................................. 0.9198
Jackson, MS................................................ 0.7790
Johnson City-Kingsport-Bristol, TN......................... 0.9114
Jonesboro, AR.............................................. 0.7443
Joplin, MO................................................. 0.7541
Kalamazoo-Battle Creek, MI................................. 1.0668
Kansas City, MO-KS......................................... 0.9564
Knoxville, TN.............................................. 0.8831
Lafayette, LA.............................................. 0.8227
Lafayette, IN.............................................. 0.9174
Lansing-East Lansing, MI................................... 1.0088
Las Cruces, NM............................................. 0.8658
Las Vegas, NV-AZ........................................... 1.0592
Lexington, KY.............................................. 0.8416
Lima, OH................................................... 0.9185
Lincoln, NE................................................ 0.9035
Little Rock-North Little Rock, AR.......................... 0.8490
Longview-Marshall, TX...................................... 0.8509
Los Angeles-Long Beach, CA................................. 1.2268
Louisville, KY-IN.......................................... 0.9507
Macon, GA.................................................. 0.9227
Madison, WI................................................ 1.0055
Mansfield, OH.............................................. 0.8639
Medford-Ashland, OR........................................ 1.0354
Memphis, TN-AR-MS.......................................... 0.8589
Milwaukee-Waukesha, WI..................................... 0.9819
Minneapolis-St. Paul, MN-WI................................ 1.0733
Monroe, LA................................................. 0.8414
Montgomery, AL............................................. 0.7813
Nashville, TN.............................................. 0.9182
New Haven-Bridgeport-Stamford-Waterbury-Danbury, CT........ 1.2619
New London-Norwich, CT..................................... 1.2258
New Orleans, LA............................................ 0.9566
New York-Newark, NY-NJ-PA.................................. 1.3982
Newark, NJ................................................. 1.1111
Newburgh, NY-PA............................................ 1.1283
Oakland, CA................................................ 1.5158
Odessa-Midland, TX......................................... 0.8516
Oklahoma City, OK.......................................... 0.8481
Omaha, NE-IA............................................... 0.9421
Orange County, CA.......................................... 1.1532
Peoria-Pekin, IL........................................... 0.8586
Philadelphia, PA-NJ........................................ 1.1379
Pittsburgh, PA............................................. 0.9583
Pocatello, ID.............................................. 0.9000
Portland, ME............................................... 0.9627
Portland-Vancouver, OR-WA.................................. 1.1344
Provo-Orem, UT............................................. 1.0073
Raleigh-Durham-Chapel Hill, NC............................. 0.9818
Rapid City, SD............................................. 0.8345
Rochester, MN.............................................. 1.0502
Rockford, IL............................................... 0.9081
Sacramento, CA............................................. 1.2202
Saginaw-Bay City-Midland, MI............................... 0.9564
St. Cloud, MN.............................................. 0.9544
St. Louis, MO-IL........................................... 0.9130
Salinas, CA................................................ 1.4299
Salt Lake City-Ogden, UT................................... 0.9862
San Diego, CA.............................................. 1.2225
San Francisco, CA.......................................... 1.4091
Santa Fe, NM............................................... 1.0007
Santa Rosa, CA............................................. 1.2146
Seattle-Bellevue-Everett, WA............................... 1.1375
Sherman-Denison, TX........................................ 0.8324
Sioux City, IA-NE.......................................... 0.8031
Sioux Falls, SD............................................ 0.8607
South Bend, IN............................................. 0.9880
Spokane, WA................................................ 1.0311
Springfield, IL............................................ 0.8610
Springfield, MO............................................ 0.8036
Stockton-Lodi, CA.......................................... 1.1518
Syracuse, NY............................................... 0.9480
Tampa-St. Petersburg-Clearwater, FL........................ 0.9196
Texarkana, TX-Texarkana, AR................................ 0.8699
Topeka, KS................................................. 0.9310
Tucson, AZ................................................. 0.9180
Tulsa, OK.................................................. 0.8074
Tyler, TX.................................................. 0.9421
Vallejo-Fairfield-Napa, CA................................. 1.3528
Washington, DC-MD-VA-WV.................................... 1.0780
Waterloo-Cedar Falls, IA................................... 0.8643
Wausau, WI................................................. 0.9845
Wichita, KS................................................ 0.9157
Wichita Falls, TX.......................................... 0.7646
Rural Florida.............................................. 0.8838
Rural Louisiana............................................ 0.7383
Rural Minnesota............................................ 0.8180
Rural Missouri............................................. 0.7207
Rural New Hampshire........................................ 0.9724
Rural New Mexico........................................... 0.8110
Rural North Carolina....................................... 0.7939
Rural Oregon............................................... 0.9976
Rural Washington........................................... 1.0221
Rural West Virginia........................................ 0.7966
Rural Wyoming.............................................. 0.8247
------------------------------------------------------------------------
Source: Health Care Financing Administration.
TABLE D-21.--DIAGNOSIS-RELATED GROUPS RELATIVE WEIGHTS, FISCAL YEARS 1997 AND 1998
----------------------------------------------------------------------------------------------------------------
Percent
DRG MDC Type Title 1997 1998 change
----------------------------------------------------------------------------------------------------------------
1 1 SURG Craniotomy age >17 except for 3.0486 3.0907 1.4
trauma.
2 1 SURG Craniotomy for trauma age >17.. 3.0134 3.0511 1.3
3 1 SURG \1\ Craniotomy age 0-17............ 1.9167 1.9484 1.7
4 1 SURG Spinal procedures.............. 2.3399 2.3858 2.0
5 1 SURG Extracranial vascular 1.5143 1.5041 -0.7
procedures.
6 1 SURG Carpal tunnel release.......... 0.7419 0.7582 2.2
7 1 SURG Periph and cranial nerve and 2.4886 2.4717 -0.7
other nerv syst proc with CC.
8 1 SURG Periph and cranial nerve and 1.0962 1.2142 10.8
other nerv syst proc without
CC.
9 1 MED Spinal disorders and injuries.. 1.2677 1.2646 -0.2
10 1 MED Nervous system neoplasms with 1.2196 1.2184 -0.1
CC.
11 1 MED Nervous system neoplasms 0.8000 0.7879 -1.5
without CC.
12 1 MED Degenerative nervous system 0.9457 0.9370 -0.9
disorders.
13 1 MED Multiple sclerosis and 0.7770 0.7832 0.8
cerebellar ataxia.
14 1 MED Specific cerebrovascular 1.1999 1.1889 -0.9
disorders except TIA.
15 1 MED Transient ischemic attack and 0.7231 0.7241 0.1
precerebral occlusions.
16 1 MED Nonspecific cerebrovascular 1.0371 1.0452 0.8
disorders with CC.
17 1 MED Nonspecific cerebrovascular 0.6331 0.6161 -2.7
disorders without CC.
18 1 MED Cranial and peripheral nerve 0.9319 0.9399 0.9
disorders with CC.
19 1 MED Cranial and peripheral nerve 0.6230 0.6293 1.0
disorders without CC.
20 1 MED Nervous system infection except 2.4854 2.5786 3.7
viral meningitis.
21 1 MED Viral meningitis............... 1.4910 1.4866 -0.3
22 1 MED Hypertensive encephalopathy.... 0.8353 0.8594 2.9
23 1 MED Nontraumatic stupor and coma... 0.8089 0.7777 -3.9
24 1 MED Seizure and headache age >17 0.9694 0.9578 -1.2
with CC.
25 1 MED Seizure and headache age >17 0.5793 0.5821 0.5
without CC.
26 1 MED Seizure and headache age 0-17.. 0.7387 0.9601 30.0
27 1 MED Traumatic stupor and coma, coma 1.3060 1.2670 -3.0
>1 HR.
28 1 MED Traumatic stupor and coma, coma 1.2033 1.1707 -2.7
<1 HR age >17 with CC.
29 1 MED Traumatic stupor and coma, coma 0.6371 0.6383 0.2
<1 HR age >17 without CC.
30 1 MED \1\ Traumatic stupor and coma, coma 0.3241 0.3295 1.7
<1 HR age 0-17.
31 1 MED Concussion age >17 with CC..... 0.8412 0.8369 -0.5
32 1 MED Concussion age >17 without CC.. 0.4861 0.5109 5.1
33 1 MED \1\ Concussion age 0-17............ 0.2037 0.2071 1.7
34 1 MED Other disorders of nervous 1.0673 1.0385 -2.7
system with CC.
35 1 MED Other disorders of nervous 0.6149 0.5941 -3.4
system, without CC.
36 2 SURG Retinal procedures............. 0.6134 0.6265 2.1
37 2 SURG Orbital procedures............. 0.9323 0.9725 4.3
38 2 SURG Primary iris procedures........ 0.4282 0.4826 12.7
39 2 SURG Lens procedures with or without 0.5184 0.5406 4.3
vitrectomy.
40 2 SURG Extraocular procedures except 0.7072 0.7341 3.8
orbit age >17.
41 2 SURG \1\ Extraocular procedures except 0.3299 0.3354 1.7
orbit age 0-17.
42 2 SURG Introcular procedures except 0.5816 0.5676 -2.4
retina, iris and lens.
43 2 MED Hyphema........................ 0.4520 0.4119 -8.9
44 2 MED Acute major eye infections..... 0.6237 0.6072 -2.6
45 2 MED Neurological eye disorders..... 0.6525 0.6730 3.1
46 2 MED Other disorders of the eye age 0.7656 0.7234 -5.5
>17 with CC.
47 2 MED Other disorders of the eye age 0.4664 0.4623 -0.9
>17 without CC.
48 2 MED \1\ Other disorders of the eye age 0.2907 0.2955 1.7
0-17.
49 3 SURG Major head and neck procedures. 1.7245 1.8074 4.8
50 3 SURG Sialoadenectomy................ 0.7686 0.8143 5.9
51 3 SURG Salivary gland procedures 0.7345 0.8367 13.9
except sialoadenectomy.
52 3 SURG Cleft lip and palate repair.... 1.0271 1.2768 24.3
53 3 SURG Sinus and mastoid procedures 1.0128 1.0682 5.5
age >17.
54 3 SURG \1\ Sinus and mastoid procedures 0.4712 0.4790 1.7
age 0-17.
55 3 SURG Miscellaneous ear, nose, mouth 0.7880 0.8366 6.2
and throat procedures.
56 3 SURG Rhinoplasty.................... 0.8283 0.8830 6.6
57 3 SURG T&A proc, except tonsillectomy 0.9325 1.0182 9.2
and/or adenoidectomy only age
>17.
58 3 SURG \1\ T&A proc, except tonsillectomy 0.2676 0.2720 1.6
and/or adenoidectomy only age
0-17.
59 3 SURG Tonsillectomy and/or 0.7439 0.8238 10.7
adenoidectomy only age >17.
60 3 SURG \1\ Tonsillectomy and/or 0.2038 0.2072 1.7
adenoidectomy only age 0-17.
61 3 SURG Myringotomy with tube insertion 1.1960 1.1181 -6.5
age >17.
62 3 SURG \1\ Myringotomy with tube insertion 0.2885 0.2933 1.7
age 0-17.
63 3 SURG Other ear, nose, mouth and 1.2168 1.2444 2.3
throat O.R. procedures.
64 3 MED Ear, nose, mouth and throat 1.1737 1.1568 -1.4
malignancy.
65 3 MED Dysequilibrium................. 0.5195 0.5177 -0.3
66 3 MED Epistaxis...................... 0.5366 0.5605 4.5
67 3 MED Epiglottitis................... 0.8397 0.7866 -6.3
68 3 MED Otitis media and uri age >17 0.7098 0.6831 -3.8
with CC.
69 3 MED Otitis media and uri age >17 0.5239 0.5160 -1.5
without CC.
70 3 MED Otitis media and uri age 0-17.. 0.3727 0.3892 4.4
71 3 MED Laryngotracheitis.............. 0.7702 0.6688 -13.2
72 3 MED Nasal trauma and deformity..... 0.6532 0.6364 -2.6
73 3 MED Other ear, nose, mouth and 0.7505 0.7660 2.1
throat diagnoses age >17.
74 3 MED \1\ Other ear, nose, mouth and 0.3278 0.3332 1.6
throat diagnoses age 0-17.
75 4 SURG Major chest procedures......... 3.1951 3.1958 0.0
76 4 SURG Other resp system O.R. 2.6036 2.6427 1.5
procedures with CC.
77 4 SURG Other resp system O.R. 1.1593 1.1150 -3.8
procedures without CC.
78 4 MED Pulmonary embolism............. 1.4292 1.4264 -0.2
79 4 MED Respiratory infections and 1.6300 1.6258 -0.3
inflammations age 17 with CC.
80 4 MED Respiratory infections and 0.9436 0.9121 -3.3
inflammations age 17 without
CC.
81 4 MED \1\ Respiratory infections and 1.4845 1.5091 1.7
inflammations age 0-17.
82 4 MED Respiratory neoplasms.......... 1.3319 1.3329 0.1
83 4 MED Major chest trauma with CC..... 0.9782 0.9716 -0.7
84 4 MED Major chest trauma without CC.. 0.5319 0.5260 -1.1
85 4 MED Pleural effusion with CC....... 1.2200 1.2212 0.1
86 4 MED Pleural effusion without CC.... 0.7117 0.6715 -5.6
87 4 MED Pulmonary edema and respiratory 1.3615 1.3639 0.2
failure.
88 4 MED Chronic obstructive pulmonary 0.9846 0.9705 -1.4
disease.
89 4 MED Simple pneumonia and pleurisy 1.1156 1.1006 -1.3
age >17 with CC.
90 4 MED Simple pneumonia and pleurisy 0.6978 0.6773 -2.9
age >17 without CC.
91 4 MED Simple pneumonia and pleurisy 0.7524 0.7940 5.5
age 0-17.
92 4 MED Interstitial lung diseases with 1.2029 1.1947 -0.7
CC.
93 4 MED Interstitial lung disease 0.7498 0.7423 -1.0
without CC.
94 4 MED Pneumothorax with CC........... 1.1780 1.1857 0.7
95 4 MED Pneumothorax without CC........ 0.5996 0.5974 -0.4
96 4 MED Bronchitis and asthma age >17 0.8272 0.8005 -3.2
with CC.
97 4 MED Bronchitis and asthma age >17 0.6035 0.5887 -2.5
without CC.
98 4 MED Bronchitis and asthma age 0-17. 0.7807 0.6298 -19.3
99 4 MED Respiratory signs and symptoms 0.6869 0.6710 -2.3
with CC.
100 4 MED Respiratory signs and symptoms 0.5113 0.5109 -0.1
without CC.
101 4 MED Other respiratory system 0.8748 0.8518 -2.6
diagnoses with CC.
102 4 MED Other respiratory system 0.5335 0.5295 -0.7
diagnoses without CC.
103 5 SURG Heart transplant............... 15.3358 16.5746 8.1
104 5 SURG Cardiac valve procedures with 7.3199 7.3563 0.5
cardiac cath.
105 5 SURG Cardiac valve procedures 5.5998 5.7109 2.0
without cardiac cath.
106 5 SURG Coronary bypass with cardiac 5.5564 5.5843 0.5
cath.
107 5 SURG Coronary bypass without cardiac 4.0685 4.0812 0.3
cath.
108 5 SURG Other cardiothoracic procedures 5.9135 6.1282 3.6
109 ..... ..................... No longer valid................ .......... .......... ..........
110 5 SURG Major cardiovascular procedures 4.1589 4.1964 0.9
with CC.
111 5 SURG Major cardiovascular procedures 2.2875 2.2409 -2.0
without CC.
112 5 SURG Percutaneous cardiovascular 2.0946 2.0025 -4.4
procedures.
113 5 SURG Amputation for circ system 2.6935 2.6579 -1.3
disorders except upper limb
and toe.
114 5 SURG Upper limb and toe amputation 1.5152 1.5363 1.4
for circ system disorders.
115 5 SURG Perm cardiac pacemaker implant 3.6827 3.5476 -3.7
with ami, Heart failure or
shock.
116 5 SURG Other perm cardiac pacemaker 2.4150 2.5321 4.8
implant or aicd lead or
generator proc.
117 5 SURG Cardiac pacemaker revision 1.1764 1.1950 1.6
except device replacement.
118 5 SURG Cardiac pacemaker device 1.5825 1.5889 0.4
replacement.
119 5 SURG Vein ligation and stripping.... 1.1435 1.1997 4.9
120 5 SURG Other circulatory system O.R. 1.9318 1.9158 -0.8
procedures.
121 5 MED Circulatory disorders with ami 1.6482 1.6537 0.3
and c.v. comp disch alive.
122 5 MED Circulatory disorders with ami 1.1617 1.1446 -1.5
without c.v. comp disch alive.
123 5 MED Circulatory disorders with ami, 1.4555 1.4695 1.0
expired.
124 5 MED Circulatory disorders except 1.3258 1.3565 2.3
ami, with card cath and
complex diag.
125 5 MED Circulatory disorders except 0.9246 0.9738 5.3
ami, with card cath without
complex diag.
126 5 MED Acute and subacute endocarditis 2.5379 2.4879 -2.0
127 5 MED Heart failure and shock........ 1.0265 1.0199 -0.6
128 5 MED Deep vein thrombophlebitis..... 0.7861 0.7807 -0.7
129 5 MED Cardiac arrest, unexplained.... 1.1316 1.1414 0.9
130 5 MED Peripheral vascular disorders 0.9352 0.9410 0.6
with CC.
131 5 MED Peripheral vascular disorders 0.6038 0.6040 0.0
without CC.
132 5 MED Atherosclerosis with CC........ 0.6840 0.6749 -1.3
133 5 MED Atherosclerosis without CC..... 0.5537 0.5360 -3.2
134 5 MED Hypertension................... 0.5787 0.5760 -0.5
135 5 MED Cardiac congenital and valvular 0.8838 0.8336 -5.7
disorders age 17 with CC.
136 5 MED Cardiac congenital and valvular 0.5629 0.5709 1.4
disorders age 17 without CC.
137 5 MED \1\ Cardiac congenital and valvular 0.7999 0.8131 1.7
disorders age 0-17.
138 5 MED Cardiac arrhythmia and 0.8008 0.7962 -0.6
conduction disorders with CC.
139 5 MED Cardiac arrhythmia and 0.4971 0.4982 0.2
conduction disorders without
CC.
140 5 MED Angina pectoris................ 0.6205 0.5993 -3.4
141 5 MED Syncope and collapse with CC... 0.7128 0.7005 -1.7
142 5 MED Syncope and collapse without CC 0.5288 0.5231 -1.1
143 5 MED Chest pain..................... 0.5223 0.5200 -0.4
144 5 MED Other circulatory system 1.0857 1.0904 0.4
diagnoses with CC.
145 5 MED Other circulatory system 0.6208 0.6401 3.1
diagnoses without CC.
146 6 SURG Rectal resection with CC....... 2.6363 2.7356 3.8
147 6 SURG Rectal resection without CC.... 1.6018 1.5885 -0.8
148 6 SURG Major small and large bowel 3.3710 3.3883 0.5
procedures with CC.
149 6 SURG Major small and large bowel 1.5999 1.5495 -3.2
procedures without CC.
150 6 SURG Peritoneal adhesiolysis with CC 2.6828 2.7109 1.0
151 6 SURG Peritoneal adhesiolysis without 1.2910 1.2645 -2.1
CC.
152 6 SURG Minor small and large bowel 1.9311 1.9139 -0.9
procedures with CC.
153 6 SURG Minor small and large bowel 1.1568 1.1634 0.6
procedures without CC.
154 6 SURG Stomach, esophageal and 4.1817 4.1851 0.1
duodenal procedures age >17
with CC.
155 6 SURG Stomach, esophageal and 1.4059 1.3350 -5.0
duodenal procedures age >17
without CC.
156 6 SURG \1\ Stomach, esophageal and 0.8238 0.8374 1.7
duodenal procedures age 0-17.
157 6 SURG Anal and stomal procedures with 1.1352 1.1824 4.2
CC.
158 6 SURG Anal and stomal procedures 0.6077 0.6272 3.2
without CC.
159 6 SURG Hernia procedures except 1.2268 1.2548 2.3
inguinal and femoral age >17
with CC.
160 6 SURG Hernia procedures except 0.7026 0.7177 2.1
inguinal and femoral age >17
without CC.
161 6 SURG Inguinal and femoral hernia 1.0066 1.0573 5.0
procedures age >17 with CC.
162 6 SURG Inguinal and femoral hernia 0.5707 0.5856 2.6
procedures age >17 without CC.
163 6 SURG Hernia procedures age 0-17..... 0.7706 0.8660 12.4
164 6 SURG Appendectomy with complicated 2.3386 2.3412 0.1
principal diag with CC.
165 6 SURG Appendectomy with complicated 1.2582 1.2270 -2.5
principal diag without CC.
166 6 SURG Appendectomy without 1.4497 1.4582 0.6
complicated principal diag
with CC.
167 6 SURG Appendectomy without 0.8431 0.8373 -0.7
complicated principal diag
without CC.
168 3 SURG Mouth procedures with CC....... 1.0929 1.1187 2.4
169 3 SURG Mouth procedures without CC.... 0.6717 0.6903 2.8
170 6 SURG Other digestive system O.R. 2.7453 2.7587 0.5
procedures with CC.
171 6 SURG Other digestive system O.R. 1.1202 1.1146 -0.5
procedures without CC.
172 6 MED Digestive malignancy with CC... 1.2920 1.2867 -0.4
173 6 MED Digestive malignancy without CC 0.6769 0.6744 -0.4
174 6 MED G.I. Hemorrhage with CC........ 0.9952 0.9925 -0.3
175 6 MED G.I. Hemorrhage without CC..... 0.5485 0.5366 -2.2
176 6 MED Complicated peptic ulcer....... 1.0856 1.1011 1.4
177 6 MED Uncomplicated peptic ulcer with 0.8335 0.8556 2.7
CC.
178 6 MED Uncomplicated peptic ulcer 0.6091 0.6241 2.5
without CC.
179 6 MED Inflammatory bowel disease..... 1.1188 1.1100 -0.8
180 6 MED G.I. obstruction with CC....... 0.9194 0.9153 -0.4
181 6 MED G.I. obstruction without CC.... 0.5338 0.5204 -2.5
182 6 MED Esophagitis, gastroent and misc 0.7789 0.7664 -1.6
digest disorders age >17 with
CC.
183 6 MED Esophagitis, gastroent and misc 0.5553 0.5496 -1.0
digest disorders age >17
without CC.
184 6 MED Esophagitis, gastroent and misc 0.5414 0.5930 9.5
digest disorders age 0-17.
185 3 MED Dental and oral dis except 0.8424 0.8424 0.0
extractions and restorations
age >17.
186 3 MED \1\ Dental and oral dis except 0.3140 0.3192 1.7
extractions and restorations
age 0-17.
187 3 MED Dental extractions and 0.7104 0.7049 -0.8
restorations.
188 6 MED Other digestive system 1.0591 1.0727 1.3
diagnoses age >17 with CC.
189 6 MED Other digestive system 0.5640 0.5488 -2.7
diagnoses age >17 without CC.
190 6 MED Other digestive system 0.8769 0.8786 0.2
diagnoses age 0-17.
191 7 SURG Pancreas, liver and shunt 4.4543 4.3490 -2.4
procedures with CC.
192 7 SURG Pancreas, liver and shunt 1.7889 1.7057 -4.7
procedures without CC.
193 7 SURG Biliary tract proc except only 3.2878 3.2666 -0.6
cholecyst with or without
C.D.E. with CC.
194 7 SURG Biliary tract proc except only 1.7549 1.6688 -4.9
cholecyst with or without
C.D.E. without CC.
195 7 SURG Cholecystectomy with C.D.E. 2.6894 2.7112 0.8
with CC.
196 7 SURG Cholecystectomy with C.D.E. 1.6127 1.6075 -0.3
without CC.
197 7 SURG Cholecystectomy except by 2.2679 2.3085 1.8
laparoscope without C.D.E.
with CC.
198 7 SURG Cholecystectomy except by 1.1738 1.1693 -0.4
laparoscope without C.D.E.
without CC.
199 7 SURG Hepatobiliary diagnostic 2.3728 2.3523 -0.9
procedure for malignancy.
200 7 SURG Hepatobiliary diagnostic 3.1772 3.0210 -4.9
procedure for nonmalignancy.
201 7 SURG Other hepatobiliary or pancreas 3.7669 3.4752 -7.7
O.R. procedures.
202 7 MED Cirrhosis and alcoholic 1.3675 1.3255 -3.1
hepatitis.
203 7 MED Malignancy of hepatobiliary 1.2486 1.2605 1.0
system or pancreas.
204 7 MED Disorders of pancreas except 1.2004 1.2117 0.9
malignancy.
205 7 MED Disorders of liver except 1.2194 1.2144 -0.4
malig, cirr, alc hepa with CC.
206 7 MED Disorders of liver except 0.7159 0.6543 -8.6
malig, cirr, alc hepa without
CC.
207 7 MED Disorders of the biliary tract 1.0508 1.0507 0.0
with CC.
208 7 MED Disorders of the biliary tract 0.6045 0.6039 -0.1
without CC.
209 8 SURG Major joint and limb 2.2606 2.2337 -1.2
reattachment procedures of
lower extremity.
210 8 SURG Hip and femur procedures except 1.8460 1.8265 -1.1
major joint age >17 with CC.
211 8 SURG Hip and femur procedures except 1.2740 1.2541 -1.6
major joint age >17 without CC.
212 8 SURG Hip and femur procedures except 1.1487 1.1311 -1.5
major joint age 0-17.
213 8 SURG Amputation for musculoskeletal 1.7049 1.6513 -3.1
system and conn tissue
disorders.
214 ..... ..................... No longer valid................ 1.9255 .......... ..........
215 ..... ..................... No longer valid................ 1.1119 .......... ..........
216 8 SURG Biopsies of musculoskeletal 2.0784 2.1082 1.4
system and connective tissue.
217 8 SURG WND debrid and skin graft 2.8812 2.8033 -2.7
except hand, for muscskelet
and conn tiss dis.
218 8 SURG Lower extrem and humer proc 1.4574 1.4576 0.0
except hip, foot, femur age
>17 with CC.
219 8 SURG Lower extrem and humer proc 0.9553 0.9631 0.8
except hip, foot, femur age
>17 without CC.
220 8 SURG \1\ Lower extrem and humer proc 0.5706 0.5800 1.6
except hip, foot, femur age 0-
17.
221 ..... ..................... No longer valid................ .......... .......... ..........
222 ..... ..................... No longer valid................ .......... .......... ..........
223 8 SURG Major shoulder/elbow proc, or 0.8720 0.9007 3.3
other upper extremity proc
with CC.
224 8 SURG Shoulder, elbow or forearm 0.7417 0.7466 0.7
proc, exc major joint proc,
without CC.
225 8 SURG Foot procedures................ 1.0020 1.0124 1.0
226 8 SURG Soft tissue procedures with CC. 1.3831 1.4095 1.9
227 8 SURG Soft tissue procedures without 0.7449 0.7729 3.8
CC.
228 8 SURG Major thumb or joint proc, or 0.9349 0.9542 2.1
other hand or wrist proc with
CC.
229 8 SURG Hand or wrist proc, except 0.6512 0.6706 3.0
major joint proc, without CC.
230 8 SURG Local excision and removal of 1.0567 1.1296 6.9
int fix devices of hip and
femur.
231 8 SURG Local excision and removal of 1.2263 1.2727 3.8
int fix devices except hip and
femur.
232 8 SURG Arthroscopy.................... 1.0884 1.0629 -2.3
233 8 SURG Other musculoskelet sys and 2.0170 2.0329 0.8
conn tiss O.R. proc without CC.
234 8 SURG Other musculoskelet sys and 1.0675 1.1126 4.2
conn tiss O.R. proc without CC.
235 8 MED Fractures of femur............. 0.8395 0.7710 -8.2
236 8 MED Fractures of hip and pelvis.... 0.7620 0.7338 -3.7
237 8 MED Sprains, strains and 0.5637 0.5952 5.6
dislocations of hip, pelvis
and thigh.
238 8 MED Osteomyelitis.................. 1.3796 1.3250 -4.0
239 8 MED Pathological fractures and 1.0115 0.9865 -2.5
musculoskeletal and conn tiss
malignancy.
240 8 MED Connective tissue disorders 1.2112 1.2098 -0.1
with CC.
241 8 MED Connective tissue disorders 0.6029 0.5862 -2.8
without CC.
242 8 MED Septic arthritis............... 1.0492 1.0501 0.1
243 8 MED Medical back problems.......... 0.7241 0.7158 -1.1
244 8 MED Bone disease and specific 0.7279 0.7199 -1.1
arthropathies with CC.
245 8 MED Bone disease and specific 0.4954 0.5002 1.0
arthropathies without CC.
246 8 MED Nonspecific arthropathies...... 0.5887 0.5713 -3.0
247 8 MED Signs and symptoms of 0.5523 0.5587 1.2
musculoskeletal system and
conn tissue.
248 8 MED Tendonitis, myositis and 0.7325 0.7428 1.4
bursitis.
249 8 MED Aftercare, musculoskeletal 0.6522 0.6559 0.6
system and connective tissue.
250 8 MED FX, sprn, strn and disl of 0.6915 0.6995 1.2
forearm, hand, foot age >17
with CC.
251 8 MED FX, sprn, strn and disl of 0.4640 0.4517 -2.7
forearm, hand, foot age >17
without CC.
252 8 MED \1\ FX, sprn, strn and disl of 0.2479 0.2520 1.7
forearm, hand, foot age 0-17.
253 8 MED FX, sprn, strn and disl of 0.7438 0.7265 -2.3
uparm, lowleg ex foot age >17
with CC.
254 8 MED FX, sprn, strn, and disl of 0.4451 0.4350 -2.3
uparm, lowleg ex foot age >17
without CC.
255 8 MED \1\ FX, sprn, strn and disl of 0.2886 0.2934 1.7
uparm, lowleg ex foot age 0-17.
256 8 MED Other musculoskeletal system 0.7651 0.7826 2.3
and connective tissue
diagnoses.
257 9 SURG Total mastectomy for malignancy 0.9015 0.9276 2.9
with CC.
258 9 SURG Total mastectomy for malignancy 0.7087 0.7162 1.1
without CC.
259 9 SURG Subtotal mastectomy for 0.8640 0.8874 2.7
malignancy with CC.
260 9 SURG Subtotal mastectomy for 0.6083 0.6092 0.1
malignancy without CC.
261 9 SURG Breast proc for nonmalignancy 0.8286 0.8961 8.1
except biopsy and local
excision.
262 9 SURG Breast biopsy and local 0.7695 0.7820 1.6
excision for nonmalignancy.
263 9 SURG Skin graft and/or debrid for 2.1226 2.0221 -4.7
skn ulcer or cellulitis with
CC.
264 9 SURG Skin graft and/or debrid for 1.1270 1.0773 -4.4
skin ulcer or cellulitis
without CC.
265 9 SURG Skin graft and/or debrid except 1.4993 1.5166 1.2
skin ulcer or cellulitis with
CC.
266 9 SURG Skin graft and/or debrid except 0.7629 0.7909 3.7
for skin ulcer or cellulitis
without CC.
267 9 SURG Perianal and pilonidal 0.8330 0.8424 1.1
procedures.
268 9 SURG Skin, subcutaneous tissue and 0.9916 1.0090 1.8
breast plastic procedures.
269 9 SURG Other skin, subcut tiss and 1.6416 1.5733 -4.2
breast proc with CC.
270 9 SURG Other skin, subcut tiss and 0.7003 0.7061 0.8
breast proc without CC.
271 9 MED Skin ulcers.................... 1.0816 1.0259 -5.1
272 9 MED Major skin disorders with CC... 1.0158 0.9950 -2.0
273 9 MED Major skin disorders without CC 0.6346 0.6618 4.3
274 9 MED Malignant breast disorders with 1.0760 1.1229 4.4
CC.
275 9 MED Malignant breast disorders 0.5085 0.5882 15.7
without CC.
276 9 MED Nonmalignant breast disorders.. 0.6374 0.6122 -4.0
277 9 MED Cellulitis age >17 with CC..... 0.8526 0.8322 -2.4
278 9 MED Cellulitis age >17 without CC.. 0.5774 0.5574 -3.5
279 9 MED \1\ Cellulitis age 0-17............ 0.7190 0.7309 1.7
280 9 MED Trauma to the skin subcut tiss 0.6750 0.6757 0.1
& breast age >17 with CC.
281 9 MED Trauma to the skin subcut tiss 0.4560 0.4558 0.0
& breast age >17 without CC.
282 9 MED \1\ Trauma to the skin subcut tiss 0.2509 0.2551 1.7
& breast age 0-17.
283 9 MED Minor skin disorders with CC... 0.6990 0.6936 -0.8
284 9 MED Minor skin disorders without CC 0.4340 0.4371 0.7
285 10 SURG Amputat of lower limb for 2.2015 2.1556 -2.1
endocrine, nutrit and metabol
disorders.
286 10 SURG Adrenal and pituitary 2.3775 2.2671 -4.6
procedures.
287 10 SURG Skin grafts and wound debrid 1.9765 1.8727 -5.3
for endoc, nutrit and metab
disorders.
288 10 SURG O.R. procedures for obesity.... 2.0104 2.0255 0.8
289 10 SURG Parathyroid procedures......... 1.0198 0.9827 -3.6
290 10 SURG Thyroid procedures............. 0.8798 0.8970 2.0
291 10 SURG Thyroglossal procedures........ 0.5189 0.7372 42.1
292 10 SURG Other endocrine, nutrit and 2.6450 2.5483 -3.7
metab. O.R. proc with CC.
293 10 SURG Other endocrine, nutrit and 1.2671 1.2297 -3.0
metab. O.R. proc without CC.
294 10 MED Diabetes age >35............... 0.7594 0.7546 -0.6
295 10 MED Diabetes age 0-35.............. 0.7159 0.7359 2.8
296 10 MED Nutritional and misc metabolic 0.8929 0.8657 -3.0
disorders age >17 with CC.
297 10 MED Nutritional and misc metabolic 0.5364 0.5188 -3.3
disorders age >17 without CC.
298 10 MED Nutritional and misc metabolic 0.5221 0.4207 -19.4
disorders age age 0-17.
299 10 MED Inborn errors of metabolism.... 0.8330 0.8716 4.6
300 10 MED Endocrine disorders with CC.... 1.0950 1.0810 -1.3
301 10 MED Endocrine disorders without CC. 0.6182 0.5941 -3.9
302 11 SURG Kidney transplant.............. 3.9047 3.7570 -3.8
303 11 SURG Kidney, ureter and major 2.6409 2.6139 -1.0
bladder procedures for
neoplasm.
304 11 SURG Kidney, ureter and major 2.3716 2.3982 1.1
bladder procedures for
nonneopl with CC.
305 11 SURG Kidney, ureter and major 1.1776 1.1695 -0.7
bladder procedures for
nonneopl without CC.
306 11 SURG Prostatectomy with CC.......... 1.2258 1.2168 -0.7
307 11 SURG Prostatectomy without CC....... 0.6708 0.6455 -3.8
308 11 SURG Minor bladder procedures with 1.5252 1.5120 -0.9
CC.
309 11 SURG Minor bladder procedures 0.8860 0.8760 -1.1
without CC.
310 11 SURG Transurethral procedures with 1.0015 1.0248 2.3
CC.
311 11 SURG Transurethral procedures 0.5670 0.5866 3.5
without CC.
312 11 SURG Urethral procedures age >17 0.9124 0.9732 6.7
with CC.
313 11 SURG Urethral procedures age >17 0.5223 0.5783 10.7
without CC.
314 11 SURG \1\ Urethral procedures age 0-17... 0.4836 0.4916 1.7
315 11 SURG Other kidney and urinary tract 2.0574 2.0601 0.1
O.R. procedures.
316 11 MED Renal failure.................. 1.3034 1.3089 0.4
317 11 MED Admit for renal dialysis....... 0.4845 0.5489 13.3
318 11 MED Kidney and urinary tract 1.1296 1.1594 2.6
neoplasms with CC.
319 11 MED Kidney and urinary tract 0.5772 0.5808 0.6
neoplasms without CC.
320 11 MED Kidney and urinary tract 0.9048 0.8782 -2.9
infections age 17W CC.
321 11 MED Kidney and urinary tract 0.6077 0.5838 -3.9
infections age >17 without CC.
322 11 MED Kidney and urinary tract 0.5133 0.5342 4.1
infections age 0-17.
323 11 MED Urinary stones with CC, and/or 0.7496 0.7555 0.8
ESW lithotripsy.
324 11 MED Urinary stones without CC...... 0.4159 0.4298 3.3
325 11 MED Kidney and urinary tract signs 0.6377 0.6207 -2.7
and symptoms age >17 with CC.
326 11 MED Kidney and urinary tract signs 0.4320 0.4188 -3.1
and symptoms age >17 without
CC.
327 11 MED Kidney and urinary tract signs 0.2341 0.3516 50.2
and symptoms age 0-17.
328 11 MED Urethral stricture age >17 with 0.6886 0.6878 -0.1
CC.
329 11 MED Urethral stricture age >17 0.4567 0.5080 11.2
without CC.
330 11 MED \1\ Urethral stricture age 0-17.... 0.3115 0.3167 1.7
331 11 MED Other kidney and urinary tract 0.9914 1.0009 1.0
diagnoses age >17 with CC.
332 11 MED Other kidney and urinary tract 0.6070 0.5964 -1.7
diagnoses age >17 without CC.
333 11 MED Other kidney and urinary tract 0.8562 0.8389 -2.0
diagnoses age 0-17.
334 12 SURG Major male pelvic procedures 1.6653 1.6359 -1.8
with CC.
335 12 SURG Major male pelvic procedures 1.2610 1.2190 -3.3
without CC.
336 12 SURG Transurethral prostatectomy 0.8848 0.8870 0.2
with CC.
337 12 SURG Transurethral prostatectomy 0.6147 0.6129 -0.3
without CC.
338 12 SURG Testes procedures, for 1.0499 1.0950 4.3
malignancy.
339 12 SURG Testes procedures, 1.0194 1.0038 -1.5
nonmalignancy age >17.
340 12 SURG \1\ Testes procedures, 0.2769 0.2815 1.7
nonmalignancy age 0-17.
341 12 SURG Penis procedures............... 1.0745 1.1089 3.2
342 12 SURG Circumcision age >17........... 0.7578 0.8511 12.3
343 12 SURG \1\ Circumcision age 0-17.......... 0.1504 0.1529 1.7
344 12 SURG Other male reproductive system 1.0083 1.0298 2.1
O.R. procedures for malignancy.
345 12 SURG Other male reproductive system 0.8422 0.8552 1.5
O.R. proc except for
malignancy.
346 12 MED Malignancy, male reproductive 0.9559 0.9573 0.1
system, with CC.
347 12 MED Malignancy, male reproductive 0.5096 0.4603 -9.7
system, without CC.
348 12 MED Benign prostatic hypertrophy 0.7107 0.6958 -2.1
with CC.
349 12 MED Benign prostatic hypertrophy 0.3974 0.4154 4.5
without CC.
350 12 MED Inflammation of the male 0.6611 0.6797 2.8
reproductive system.
351 12 MED \1\ Sterilization, male............ 0.2309 0.2347 1.6
352 12 MED Other male reproductive system 0.5877 0.6263 6.6
diagnoses.
353 13 SURG Pelvic evisceration, radical 1.9174 2.1179 10.5
hysterectomy and radical
vulvectomy.
354 13 SURG Uterine, adnexa proc for 1.4643 1.4963 2.2
nonovarian/adnexal malig with
CC.
355 13 SURG Uterine, adnexa proc for 0.9056 0.9180 1.4
nonovarian/adnexal malig
without CC.
356 13 SURG Female reproductive system 0.7376 0.7701 4.4
reconstructive procedures.
357 13 SURG Uterine and adnexa proc for 2.3824 2.4309 2.0
ovarian or adnexal malignancy.
358 13 SURG Uterine and adnexa proc for 1.1713 1.2021 2.6
nonmalignancy with CC.
359 13 SURG Uterine and adnexa proc for 0.8285 0.8452 2.0
nonmalignancy without CC.
360 13 SURG Vagina, cervix and vulva 0.8459 0.8708 2.9
procedures.
361 13 SURG Laparoscopy and incisional 1.1148 1.1872 6.5
tubal interrruption.
362 13 SURG \1\ Endoscopic tubal interruption.. 0.2951 0.3000 1.7
363 13 SURG D&C, conization and radio- 0.6911 0.7485 8.3
implant for malignancy.
364 13 SURG D&C, conization except for 0.6739 0.6985 3.7
malignancy.
365 13 SURG Other female reproductive 1.7237 1.7085 -0.9
system O.R. procedures.
366 13 MED Malignancy, female reproductive 1.1941 1.1857 -0.7
system with CC.
367 13 MED Malignancy, female reproductive 0.5216 0.5309 1.8
system without CC.
368 13 MED Infections, female reproductive 1.0230 0.9698 -5.2
system.
369 13 MED Menstrual and other female 0.5454 0.5367 -1.6
reproductive system disorders.
370 14 SURG Cesarean section with CC....... 1.0401 1.0587 1.8
371 14 SURG Cesarean section without CC.... 0.6838 0.7054 3.2
372 14 MED Vaginal delivery with 0.5439 0.5590 2.8
complicating diagnoses.
373 14 MED Vaginal delivery without 0.3602 0.3987 10.7
complicating diagnoses.
374 14 SURG Vaginal delivery with 0.6775 0.7625 12.5
sterilization and diagnoses
and/or D&C.
375 14 SURG \1\ Vaginal delivery with O.R. proc 0.6698 0.6809 1.7
except steril and/or D&C.
376 14 MED Postpartum and post abortion 0.5638 0.4822 -14.5
diagnoses without O.R.
procedure.
377 14 SURG Postpartum and post abortion 0.8188 1.0517 28.4
diagnosis with O.R. procedure.
378 14 MED Ectopic pregnancy.............. 0.8054 0.8126 0.9
379 14 MED Threatened abortion............ 0.3591 0.4028 12.2
380 14 MED Abortion without D&C........... 0.4775 0.3501 -26.7
381 14 SURG Abortion with D&C, aspiration 0.5151 0.4809 -6.6
curettage or hysterotomy.
382 14 MED False labor.................... 0.2013 0.2086 3.6
383 14 MED Other antepartum diagnosis with 0.4655 0.4636 -0.4
medical complications.
384 14 MED Other antepartum diagnosis 0.3921 0.3539 -9.7
without medical complications.
385 15 (\1\) Neonates, died or transferred 1.3443 1.3665 1.7
to another acute care facility.
386 15 (\1\) Extreme immaturity or 4.4329 4.5063 1.7
respiratory distress syndrome,
neonate.
387 15 (\1\) Prematurity with major problems 3.0276 3.0777 1.7
388 15 (\1\) Prematurity without major 1.8268 1.8570 1.7
problems.
389 15 ..................... Full term neonate with major 2.2451 1.4862 -33.8
problems.
390 15 (\1\) Neonate with other significant 1.2845 1.3058 1.7
problems.
391 15 (\1\) Normal newborn................. 0.1490 0.1515 1.7
392 16 SURG Splenectomy age >17............ 3.2443 3.1695 -2.3
393 16 SURG \1\ Splenectomy age 0-17........... 1.3168 1.3386 1.7
394 16 SURG Other O.R. procedures of the 1.5994 1.6479 3.0
blood and blood forming organs.
395 16 MED Red blood cell disorders age 0.8362 0.8181 -2.2
>17.
396 16 MED Red blood cell disorders age 0- 0.6966 0.6284 -9.8
17.
397 16 MED Coagulation disorders.......... 1.2612 1.2679 0.5
398 16 MED Reticuloendothelial and 1.2106 1.2242 1.1
immunity disorders with CC.
399 16 MED Reticuloendothelial and 0.7030 0.6836 -2.8
immunity disorders without CC.
400 17 SURG Lymphoma and leukemia with 2.5572 2.6402 3.2
major O.R. procedure.
401 17 SURG Lymphoma and nonacute leukemia 2.4834 2.5653 3.3
with other O.R. proc with CC.
402 17 SURG Lymphoma and nonacute leukemia 1.0255 1.0145 -1.1
with other O.R. proc without
CC.
403 17 MED Lymphoma and nonacute leukemia 1.6925 1.6964 0.2
with CC.
404 17 MED Lymphoma and nonacute leukemia 0.8059 0.7917 -1.8
without CC.
405 17 (\1\) Acute leukemia without major 1.8669 1.8978 1.7
O.R. procedure age 0-17.
406 17 SURG Myeloprolif disord or poorly 2.6841 2.6147 -2.6
diff neopl with maj O.R. proc
with CC.
407 17 SURG Myeloprolif disord or poorly 1.1787 1.1516 -2.3
diff neopl with maj O.R. proc
without CC.
408 17 SURG Myeloprolif disord or poorly 1.7393 1.7294 -0.6
diff neopl with other O.R.
proc.
409 17 MED Radiotherapy................... 0.9763 0.9534 -2.3
410 17 MED Chemotherapy without acute 0.7514 0.7968 6.0
leukemia as secondary
diagnosis.
411 17 MED History of malignancy without 0.3837 0.4214 9.8
endoscopy.
412 17 MED History of malignancy with 0.4080 0.5175 26.8
endoscopy.
413 17 MED Other myeloprolif dis or poorly 1.3257 1.3777 3.9
diff neopl diag with CC.
414 17 MED Other myeloprolif dis or poorly 0.7337 0.7041 -4.0
diff neopl diag without CC.
415 18 SURG O.R. procedure for infectious 3.4430 3.5166 2.1
and parasitic diseases.
416 18 MED Septicemia age >17............. 1.4838 1.4797 -0.3
417 18 MED Septicemia age 0-17............ 0.8089 0.7688 -5.0
418 18 MED Postoperative and post- 0.9697 0.9679 -0.2
traumatic infections.
419 18 MED Fever of unknown origin age >17 0.8991 0.8831 -1.8
with CC.
420 18 MED Fever of unknown origin age >17 0.6264 0.6064 -3.2
without CC.
421 18 MED Viral illness age >17.......... 0.7153 0.7069 -1.2
422 18 MED Viral illness and fever of 0.5347 0.5347 0.0
unknown origin age 0-17.
423 18 MED Other infectious and parasitic 1.5947 1.5690 -1.6
diseases diagnoses.
424 19 SURG O.R. procedure with principal 2.3637 2.4581 4.0
diagnoses of mental illness.
425 19 MED Acute adjust react and 0.7051 0.6857 -2.8
disturbances of psychosocial
dysfunction.
426 19 MED Depressive neuroses............ 0.5680 0.5648 -0.6
427 19 MED Neuroses except depressive..... 0.5495 0.5818 5.9
428 19 MED Disorders of personality and 0.7303 0.6975 -4.5
impulse control.
429 19 MED Organic disturbances and mental 0.9075 0.8728 -3.8
retardation.
430 19 MED Psychoses...................... 0.8391 0.8073 -3.8
431 19 MED Childhood mental disorders..... 0.6556 0.8371 27.7
432 19 MED Other mental disorder diagnoses 0.7363 0.7647 3.9
433 20 ..................... Alcohol/drug abuse or 0.2986 0.3053 2.2
dependence, left AMA.
434 20 ..................... Alc/drug abuse or depend, detox 0.7141 0.6865 -3.9
or oth sympt treat with CC.
435 20 ..................... Alc/drug abuse or depend, detox 0.4164 0.4015 -3.6
or oth sympt treat without CC.
436 20 ..................... Alc/drug dependence with 0.8183 0.8110 -0.9
rehabilitation therapy.
437 20 ..................... Alc/drug dependence, combined 0.7657 0.7343 -4.1
rehab and detox therapy.
438 ..... ..................... No longer valid................ .......... .......... ..........
439 21 SURG Skin grafts for injuries....... 1.6144 1.6391 1.5
440 21 SURG Wound debridements for injuries 1.7725 1.8456 4.1
441 21 SURG Hand procedures for injuries... 0.9294 0.9298 0.0
442 21 SURG Other O.R. procedures for 2.1653 2.1818 0.8
injuries with CC.
443 21 SURG Other O.R. procedures for 0.8849 0.9116 3.0
injuries without CC.
444 21 MED Traumatic injury age >17 with 0.7312 0.7007 -4.2
CC.
445 21 MED Traumatic injury age >17 0.4845 0.4842 -0.1
without CC.
446 21 MED \1\ Traumatic injury age 0-17...... 0.2894 0.2942 1.7
447 21 MED Allergic reactions age >17..... 0.4918 0.4927 0.2
448 21 MED Allergic reactions age 0-17.... 0.0777 0.0968 24.6
449 21 MED Poisoning and toxic effects of 0.7902 0.7860 -0.5
drugs age >17 with CC.
450 21 MED Poisoning and toxic effects of 0.4274 0.4406 3.1
drugs age >17 without CC.
451 21 MED \1\ Poisoning and toxic effects of 0.2570 0.2613 1.7
drugs age 0-17.
452 21 MED Complications of treatment with 0.9473 0.9476 0.0
CC.
453 21 MED Complications of treatment 0.4822 0.4960 2.9
without CC.
454 21 MED Other injury, poisoning and 0.8575 0.9035 5.4
toxic effect diag with CC.
455 21 MED Other injury, poisoning and 0.4467 0.4453 -0.3
toxic effect diag without CC.
456 22 ..................... Burns, transferred to another 1.8327 1.7396 -5.1
acute care facility.
457 22 MED Extensive burns without O.R. 1.4657 1.5860 8.2
procedure.
458 22 SURG Nonextensive burns with skin 3.4991 3.5746 2.2
graft.
459 22 SURG Nonextensive burns with wound 1.6538 1.5588 -5.7
debridement or other O.R. proc.
460 22 MED Nonextensive burns without O.R. 0.9547 0.9421 -1.3
procedure.
461 23 SURG O.R. proc with diagnoses of 0.9963 1.0123 1.6
other contact with health
services.
462 23 MED Rehabilitation................. 1.4298 1.4041 -1.8
463 23 MED Signs and symptoms with CC..... 0.7101 0.6907 -2.7
464 23 MED Signs and symptoms without CC.. 0.5028 0.4872 -3.1
465 23 MED Aftercare with history of 0.5571 0.5858 5.2
malignancy as secondary
diagnosis.
466 23 MED Aftercare without history of 0.5905 0.6336 7.3
malignancy as secondary
diagnosis.
467 23 MED Other factors influencing 0.4588 0.4669 1.8
health status.
468 ..... ..................... Extensive O.R. procedure 3.6028 3.6202 0.5
unrelated to principal
diagnosis.
469 ..... (\2\) Principal diagnosis invalid as .......... .......... ..........
discharge diagnosis.
470 ..... (\2\) Ungroupable.................... .......... .......... ..........
471 8 SURG Bilateral or multiple major 3.5980 3.4771 -3.4
joint procs of lower extremity.
472 22 SURG Extensive burns with O.R. 10.9989 10.2429 -6.9
procedure.
473 17 ..................... Acute leukemia without major 3.5740 3.4853 -2.5
O.R. procedure age >17.
474 ..... ..................... No longer valid................ .......... .......... ..........
475 4 MED Respiratory system diagnosis 3.6765 3.7291 1.4
with ventilator support.
476 ..... SURG Prostatic O.R. procedure 2.2479 2.2234 -1.1
unrelated to principal
diagnosis.
477 ..... SURG Nonextensive O.R. procedure 1.7266 1.7461 1.1
unrelated to principal
diagnosis.
478 5 SURG Other vascular procedures with 2.2883 2.2981 0.4
CC.
479 5 SURG Other vascular procedures 1.4080 1.4113 0.2
without CC.
480 ..... SURG Liver transplant............... 13.9424 11.4672 -17.8
481 ..... SURG Bone marrow transplant......... 11.2299 11.2821 0.5
482 ..... SURG Tracheostomy for face, mouth 3.6578 3.5999 -1.6
and neck diagnoses.
483 ..... SURG Tracheostomy except for face, 16.0413 16.0451 0.0
mouth and neck diagnoses.
484 24 SURG Craniotomy for multiple 5.6821 5.7762 1.7
significant trauma.
485 24 SURG Limb reattachment, hip and 3.2058 3.1562 -1.5
femur proc for multiple
significant TR.
486 24 SURG Other O.R. procedures for 4.7915 4.8882 2.0
multiple significant trauma.
487 24 MED Other multiple significant 2.0305 2.0229 -0.4
trauma.
488 25 SURG HIV with extensive O.R. 4.7905 4.5078 -5.9
procedure.
489 25 MED HIV with major related 1.8141 1.8009 -0.7
condition.
490 25 MED HIV with or without other 1.0116 0.9952 -1.6
related condition.
491 8 SURG Major joint and limb 1.6308 1.6579 1.7
reattachment procedures of
upper extremity.
492 17 MED Chemotherapy with acute 4.0299 4.6393 15.1
leukemia as secondary
diagnosis.
493 7 SURG Laparoscopic cholecystectomy 1.7100 1.7561 2.7
without C.D.E. with CC.
494 7 SURG Laparoscopic cholecystectomy 0.9169 0.9400 2.5
without C.D.E. without CC.
495 ..... SURG Lung transplant................ 9.2870 9.5171 2.5
496 8 SURG Combined anterior/posterior .......... 5.5214 ..........
spinal fusion.
497 8 SURG Spinal fusion with CC.......... .......... 2.7692 ..........
498 8 SURG Spinal fusion without CC....... .......... 1.6171 ..........
499 8 SURG Back and neck procs except .......... 1.4827 ..........
spinal fusion with CC.
500 8 SURG Back and neck procs except .......... 0.9708 ..........
spinal fusion without CC.
501 8 SURG Knee proc with pdx of infection .......... 2.5660 ..........
with CC.
502 8 SURG Knee proc with pdx of infection .......... 1.6004 ..........
without CC.
503 8 SURG Knee procedures without pdx of .......... 1.2380 ..........
infection.
----------------------------------------------------------------------------------------------------------------
\1\ Medicare data for low-volume DRGs have been supplemented by data for non-Medicare patients from 19 States.
\2\ DRGs 469 and 470 contain cases that could not be assigned to valid DRGs.
Note.--Abbreviations are as follows:
aicd = automatic D&C = dilation & curettage gastroent = nutrit = nutritional
implantable cardioverter debrid = debridement gastroenteritis OR = operating room
defibrillator detox = detoxification G.I. = gastrointestinal pdx = principal diagnosis
alc hepa = alcoholic diag. = diagnosis HIV = human proc = procedures
hepatitis diff = differentiated immunodeficiency virus sprn = sprain
AMA = against medical digest = digestive HR = hour strn = strain
advice dis = diseases humer = humerus subcut = subcutaneous
ami = anterior myocardial disch = discharge int = internal surg = surgical
infarction disl = dislocation lowleg = lower leg syst = system
amputat = amputation disord = disorder malig = malignancy T&A = tonsillectomy and/or
cath = catheterization endoc = endocrine MDC = major diagnostic adenoidectomy
CC = complication or ESW = extracorporeal shock category TIA = transient ischemic
comorbidity wave med = medical attack
C.D.E. = common duct extrem = extremity metabol = metabolic TR = trauma
exploration fix = fixation muscskelet = uparm = upper arm
cholecyst = cholecystectomy FX = fracture musculoskeletal WND = wound
circ = circulatory myeloprolif =
cirr = cirrhosis myeloproliferative
comp = complication neopl = neoplasm
conn = connective nonneopl = nonneoplasm
c.v. = cardiovascular
Source: Health Care Financing Administration.
REFERENCES
Prospective Payment Assessment Commission. (1997, March).
Report and recommendations to the Secretary.
Washington, DC.
Prospective Payment Assessment Commission. (1997, June).
Medicare prospective payment and the American health
care system. Washington, DC.
Federal Register. Medicare program; Changes to the hospital
inpatient prospective payment systems and fiscal year
1998 rates, 62(168), pp. 45966-6140.