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Government Affairs Home > Teaching Hospitals > Medicare Inpatient PPS

FY 2004 Medicare Inpatient PPS Proposed Rule

Related Resources

Current Status as of July 10, 2003

On May 19, 2003, the Centers for Medicare and Medicaid Services (CMS) published its proposed rule [68 Fed Reg 27154] updating the inpatient prospective payment system for federal fiscal year 2004. Comments on the proposed rule were due July 8, 2003. The AAMC submitted comments (PDF, 29 pages - 268KB) on the Proposed Rule.

Background

The proposed rule contains a number of important changes and clarifications that could affect Medicare payments for teaching hospitals. These include:

  • Changes related to Medicare payments associated with residents training in non-hospital sites,
  • Medicare payments for nursing and allied health programs, and
  • Counting of beds and Medicaid days for purposes of calculating Medicare disproportionate share (DSH) and indirect medical education (IME) payments.

In addition, CMS proposes that the base per case payment rates be updated by the full market basket increase of 3.5 as set forth in current law. The Bush Administration believes that the update should be the market basket increase less 0.4 percentage points, as recommended by the Medicare Payment Advisory Commission (MedPAC).

The proposed rule would increase the outlier threshold to $50,645, up from $33,560 in fiscal year 2003. However, the threshold is likely to be significantly lower in the final rule pursuant to changes that will be made to Medicare outlier policies that are soon to be published in a separate outlier final rule.

Finally, the proposed rule would expand the number of diagnosis-related groups (DRGs) that are subject to the post-acute transfer policy by 19-up from the current number of ten.

Proposed Rule

The proposed rule, published May 19, 2003, in the Federal Register, is available in text format and Portable Document Format (PDF)

42 CFR Parts 412 and 413 Medicare Program: Proposed Changes to the Hospital Inpatient Prospective Payment Systems and Fiscal Year 2004 Rates; Proposed Rule

Part I [pp. 27153–27422] Text / PDF

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Contacts

Karen Fisher, Senior Associate Vice President
AAMC Health Care Affairs
kfisher@aamc.org
(202) 862-6140

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