Fiscal Year 2001 Medicare
Prospective Payment System: Final Rule
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Related Resources
AAMC Documents
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Current Status as of September 21, 2000
On August 1, 2000, the Health Care Financing Administration
(HCFA) published the final rule containing payment updates
and other changes to the Medicare hospital inpatient prospective
payment system (PPS) for fiscal year 2001. The AAMC has prepared
a summary and analysis of the final
rule.
Background
The rule includes a 2.3 percent increase in the standardized
payment amount for hospitals' per case payments under the
inpatient PPS. The increase is based on the current law requirement
that the standardized amount be updated by the 3.4 percent
projected increase in the hospital market basket less 1.1
percentage points.
The rule also finalizes the methodology for implementing
the changes to the direct graduate medical education (DGME)
payments, as mandated by the Balanced Budget Refinement Act
of 1999 (BBRA). The methodology centers around a national
average per resident amount that is adjusted by a geographic
adjustment factor that varies according to the physician fee
schedule area in which a hospital is located ("locality
adjustment"). According to the final rule, the national
average per resident amount for 1997 is $68,464.
Under the BBRA, hospitals with per resident amounts less
than 70 percent of a locality-adjusted national average will
have their amounts increased to this 70 percent "floor."
Hospitals with per resident amounts that exceed 140 percent
of the locality-adjusted national average ("ceiling")
would have their payments frozen for two years, and for the
following 3 years would receive a two percent reduction in
the otherwise applicable inflation update. Per resident amounts
in between the floor and ceiling amounts are unaffected by
the BBRA provision and will continue to receive annual inflation
updates.
The rule also continues the five-year phase-out of costs
associated with teaching physicians in the calculation of
the hospital wage index; and sets the outlier threshold for
FY 2001 at $17,250, up from $14,050 in FY 2000. In addition,
it finalizes the January 20, 2000 interim final rule permitting
hospitals to count inpatient days associated with patients
under a Medicaid waiver program for purposes of the Medicaid
portion of the Medicare disproportionate share payment adjustment
calculation.
AAMC Action
The AAMC has prepared a summary and
analysis of the final rule
Contacts
Karen Fisher, Senior Associate Vice President
AAMC Health Care Affairs
kfisher@aamc.org
(202) 862-6140
Fiscal Year 2001 Medicare Prospective Payment System:
Final Rule
42 CFR parts 410, 412, 413, and 485 Medicare Program; Changes
to the Hospital Inpatient Prospective Payment System and Fiscal
Year 2001 Rates; Final Rule:
- Part I [pp.47054-47103]: Text
/ PDF
- Part II [pp.47104-47153]: Text
/ PDF
- Part III [pp.47154-47203]: Text
/ PDF
- Part IV [pp.47204-47211]: Text
/ PDF
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