News Headlines Article

CMS angers hospitals with proposal to recover overpayments
Modern Healthcare

While hospitals are celebrating the Obama administration’s surrender on a Medicare pay cut tied to the so-called two-midnight rule, they’re seething over a proposal to nearly double the expected payment reduction meant to recoup overpayments tied to incorrect coding. Under the inpatient prospective-payment system, all hospital patients are assigned to one of hundreds of DRG codes, a system of classifying any inpatient stay into diagnostic groups for the purposes of payment. In fiscal 2008, the CMS introduced a new set of DRGs known as Medicare Severity DRGs, or MS–DRGs, intended to compensate hospitals for more expensive care provided to sicker patients.