Question

Letha is a data analyst at Happy Hospital. She has been asked to look at some reimbursement data for MS-DRG 025, Craniotomy and Endovascular Intracranial Procedures with MCC. MS-DRG 025 has a relative weight of 4.3945. The fully adjusted base rate for Community Hospital is $7,500. Answer the three parts of this question.What is the expected payment rate for MS-DRG 025 for Community Hospital?Letha has identified that 2 percent of the cases for MS-DRG 025 have a payment rate higher than the expected payment rate. What provision(s) under IPPS could be the reason for the higher-than-expected payment rate?Letha has identified that 1.5 percent of the cases for MS-DRG 025 have a payment rate lower than the expected payment rate. What provision(s) under IPPS could be the reason for the lower-than-expected payment rate?

Answer 1

The expected payment rate for MS-DRG 025 at Community Hospital is $32,958.75. Higher-than-expected payment rates could be due to outlier payments, teaching hospital adjustments, or disproportionate share hospital adjustments. Lower payment rates might be due to penalties for hospital-acquired conditions, readmissions, or early transfers to post-acute care.

Step-by-step explanation:

The expected payment rate for MS-DRG 025 for Community Hospital is calculated by multiplying the relative weight of the MS-DRG by the hospital's base rate. Here, the expected payment rate would be 4.3945 (relative weight) × $7,500 (base rate), which equals $32,958.75.

Regarding the 2 percent of cases with higher payment rates, possible provisions under the Inpatient Prospective Payment System (IPPS) that could account for this include outlier payments for extraordinarily high-cost cases or additional payments for teaching hospitals (indirect medical education adjustments), or hospitals serving a high percentage of low-income patients (disproportionate share hospital adjustments).

Concerning the 1.5 percent of cases with lower payment rates, possible provisions under IPPS may include payment reductions due to hospital-acquired conditions (HACs) or readmission penalties. Hospitals might also receive lower payments due to the transfer policy, where payment is reduced when a patient is transferred to another acute care facility or to post-acute care early in the stay, based on the number of days the patient was in the hospital before the transfer took place.