Chapter 9.E.2--Prospective Payment Methods and Rate Regulation



As of 2012, the base rate per hospital admission is about $6000, and conversion factor for the RBRVS is about $35.


Two of the new technologies listed in the problem at the end of section E.3 -- PTCA and shock-wave lithotripsy -- now have specific DRG categories assigned to them in order to avoid the payment anomalies the problem suggests.  The problem of adjusting DRG categories to reflect new technologies was also addressed in the Medicare Modernization Act of 2003, which requires DRG categories to be re-evaluated each year and provides for "add-on" payments when current categories fail to adequately compensate for new technologies.  Daniel H. Orenstein, Changes in Medicare Reimbursement for New Medical Technology, Health Lawyers News 30 (June 2004).


See updates to section E.1 for a discussion of new payment models that bundle reimbursement for episodes of care, to be divided among physicians and hospitals.



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