APPENDIX D. MEDICARE REIMBURSEMENT TO HOSPITALS CONTENTS General Summary Basic Payment System Transition Period Update Factors DRG Weighting Factors Source and Calculation of the Hospital Wage Index Sample Payment Calculation Additional Payment Amounts Graduate Medical Education Disproportionate Share Hospitals ESRD Beneficiary Discharges Outliers Payment for Capital Payments on a Reasonable Cost Basis Physicians in Teaching Hospitals Organ Acquisition Costs Passthrough Payments for Hemophilia Inpatients Bad Debts of Medicare Beneficiaries Special Treatment of Certain Facilities Under PPS Sole Community Hospitals Medicare Dependent Hospitals Referral Centers Hospitals in Rural Counties Treated as Urban Counties Hospitals Excluded From the Prospective Payment System PPS-Exempt Hospitals State Systems Administration Prospective Payment Assessment Commission/Medicare Payment Advisory Commission Administrative and Judicial Review Review Activities Historical Trends in PPS Payments, Costs, and Margins Medicare Payments to Hospitals Policy Changes and PPS Operating Payments Distribution of PPS Hospitals, Cases, and Operating Payments Trends in PPS Operating Payments and Costs PPS Inpatient Margins Margins by Hospital Type Additional Hospital Data References GENERAL SUMMARY Medicare part A provides reimbursement for inpatient hospital care through a payment system based on prospectively set rates, the prospective payment system (PPS), for hospital cost reporting periods beginning on or after October 1, 1983. PPS was enacted by the Social Security Amendments of 1983 (Public Law 98-21). This appendix describes the major reimbursement provisions of PPS. Medicare payment for hospital inpatient services is made according to a prospective payment system, rather than a retrospective cost-based system. Medicare payments are made at predetermined, specific rates which represent the average cost, nationwide, of treating a Medicare patient according to his or her medical condition. The classification system used to group hospital inpatients according to their diagnoses is known as diagnosis-related groups (DRGs). Separate DRG rates apply depending on whether a hospital is located in a large urban area (greater than 1 million population, or 970,000 in New England) or other area of the country, as determined by the Office of Management and Budget (OMB) metropolitan statistical area (MSA) system. During a 4-year transition period, a declining portion of the total prospective payment was based on a hospital's historical reasonable costs and an increasing portion was based on a combination of regional and national Federal DRG rates. Since the fifth year of the program (fiscal year 1988), Medicare payments have been generally determined under a national DRG payment methodology. Special transition provisions apply to hospitals located in certain geographic regions. If a hospital can treat a patient for less than the payment amount, it can keep the savings. If the treatment costs more, the hospital must absorb the loss. A hospital is prohibited from charging Medicare beneficiaries any amounts (except for deductibles, copayment amounts, and services not covered by Medicare) which represent any difference between the hospital's cost of providing covered care and the Medicare DRG payment amount. Certain hospital costs are excluded from the prospective payment system and are paid on a reasonable cost basis, subject to rate of increase limits. Authority is provided for States to establish their own all-payer hospital payment systems if they meet certain Federal requirements. BASIC PAYMENT SYSTEM Unless excluded from PPS, each Medicare participating hospital is paid a predetermined payment rate per discharge for each type of patient treated. Types of patients are defined by the diagnosis related groups patient classification system which assigns each hospital inpatient to one of 495 patient categories (DRGs) based on the diagnosis and the type of treatment received (medical or surgical). The payment rate for each DRG is the product of two components: a base payment amount which applies for all DRGs, and a relative weighting factor for the particular DRG. The base payment amount is intended to represent the cost of a typical (average) Medicare inpatient case. The relative weighting factor represents the relative costliness of an average case in the particular DRG compared to the cost of the overall average Medicare case (i.e., relative to the base payment amount). When the DRG relative weights are each multiplied by the base payment amount, the result is a complete set of prices for all DRGs. Separate DRG rates apply to hospitals located in large urban or other areas (separate base payment amounts apply in these areas, but the DRG relative weighting factors are the same). In addition, the base payment amount (and, therefore, each DRG rate) is adjusted for area differences in hospital wage levels compared to the national average hospital wage level. Transition Period Although the transition to prospective payment rates was completed in fiscal year 1988, special transition provisions applied to hospitals located in certain geographic regions. In a few regions with historically higher costs, Public Law 103-66 (OBRA 1993) provided for the continued use of Federal amounts based in part on regional rates until October 1, 1996. Under this transition provision, known as the ``regional floor,'' the DRG payment rate was determined as the higher of 100 percent of the national amount, or 85 percent of the national amount plus 15 percent of the regional amount. Update Factors PPS payment rates are updated each year using an ``update factor.'' The annual update factor applied to increase the Federal base payment amounts is determined, in part, by the projected increase in the hospital market basket index (MBI). The MBI measures the cost of goods and services purchased by hospitals, yielding one price inflator for all hospitals in a given year. Table D-1 shows the categories of expense used in developing the index. The update factor also includes adjustments for increases in hospital productivity, technological change, and other factors that affect the level of operating cost per discharge. The annual update factor is also adjusted to include increases in average payments per case attributable to increases in case mix due to changes in coding and reporting accuracy. Before fiscal year 1988, the same factor was used for all hospitals; however, in subsequent years separate factors were applied to hospitals according to their locations. Separate update factors were set for hospitals located in large urban, other urban, and rural areas. However, beginning in October 1, 1995, a single update factor applied for all hospitals in all areas. Table D-2 compares the hospital market basket increases to actual updates for the past 13 years and shows the increases in PPS payments per case that resulted from the updates and other policy changes. For fiscal year 1997, the market basket increase was 2.5 percent, the average update was 2.0 percent, and the increase in operating payments per case was 3.9 percent (see table D-2). TABLE D-1.--HOSPITAL PROSPECTIVE PAYMENT SYSTEM INPUT PRICE INDEX (``THE MARKET BASKET'') EXPENSE CATEGORIES AND RATES OF PRICE CHANGE, FISCAL YEARS 1992-98 ---------------------------------------------------------------------------------------------------------------- Base-year Federal fiscal year percentage rates of price change 1992 --------------------------------------------------------------------- Expense category weights \1\ (percent) 1992 \2\ 1993 \2\ 1994 \2\ 1995 \2\ 1996 \2\ 1997 \3\ 1998 \3\ ---------------------------------------------------------------------------------------------------------------- 1. Wages and salaries \4\.... 50.24 3.7 3.1 2.9 2.7 2.9 2.9 3.3 2. Employee benefits \4\..... 11.15 6.1 5.7 4.2 2.7 2.1 2.5 3.1 3. Professional fees: Nonmedical \4\.............. 2.13 4.7 4.2 3.4 2.6 3.0 2.8 3.3 4. Energy and utilities...... 2.47 -0.7 2.9 0.9 0.0 2.1 4.2 -1.3 A. Fuel oil, coal, etc... 0.35 -12.5 -1.5 -7.6 3.5 8.7 10.4 -11.7 B. Electricity........... 1.35 2.0 2.2 1.5 2.4 0.2 0.4 0.3 C. Natural gas........... 0.67 0.0 6.1 3.2 -6.7 2.6 8.9 -0.5 D. Water and sewerage.... 0.11 7.1 5.9 5.2 3.5 3.9 3.0 6.1 5. Professional liability insurance................... 1.19 2.9 3.4 -0.7 -3.3 -0.9 -1.4 -0.4 6. All other................. 32.83 1.3 2.2 1.8 4.7 2.1 1.7 2.1 A. All other products.... 24.03 0.8 1.8 1.3 5.3 1.8 0.8 1.5 1. Pharmaceuticals.. 4.16 7.2 5.0 3.5 2.5 3.8 2.4 2.9 2. Food: Direct purchase............ 2.36 0.0 1.0 1.9 0.1 5.0 2.2 1.5 3. Food: Contract service............. 1.10 2.4 1.7 1.7 2.1 2.3 3.3 3.8 4. Chemicals........ 3.80 -4.4 1.4 0.5 14.7 -1.0 0.7 0.1 5. Medical instruments......... 3.13 1.9 2.3 0.9 1.1 1.4 0.8 1.4 6. Photographic supplies............ 0.40 -0.7 -0.9 0.4 0.5 2.9 0.1 -0.7 7. Rubber and plastics............ 4.87 -0.3 0.9 0.7 5.6 0.7 -0.1 0.4 8. Paper products... 2.06 -0.5 -0.3 0.2 13.4 2.5 -3.3 2.7 9. Apparel.......... 0.88 2.2 1.3 0.2 0.5 0.7 0.8 1.6 10. Machinery and equipment........... 0.21 0.5 0.5 0.8 1.0 0.5 0.0 1.8 11. Miscellaneous products............ 1.07 0.8 1.6 0.4 1.7 2.4 2.0 1.0 B. All other services.... 8.79 2.9 3.1 3.3 3.0 3.0 4.0 3.6 1. Business services \4\................. 3.82 3.3 3.4 3.5 2.9 3.2 4.0 3.7 2. Computer services \4\................. 1.93 1.3 3.5 4.5 3.6 4.0 5.8 3.6 3. Transportation and shipping........ 0.19 1.0 3.1 2.8 4.0 2.3 3.3 3.6 4. Telephone........ 0.53 1.2 0.2 1.8 0.8 1.2 2.3 2.0 5. Postage.......... 0.27 4.9 0.0 0.0 7.7 2.4 0.0 8.1 6. All other labor intensive services \4\................. 1.71 4.2 3.2 2.7 2.5 1.9 3.1 3.3 7. All other nonlabor intensive services............ 0.34 3.0 3.0 2.6 2.8 2.8 2.8 2.7 ---------------------------------------------------------------------------------- Total............ 100.00 3.1 3.1 2.6 3.2 2.5 2.4 2.7 ---------------------------------------------------------------------------------------------------------------- \1\ Weights may not sum to 100.00 due to rounding. \2\ Historical data subject to change only upon revision of underlying series. \3\ Projected data subject to change in future forecasts. \4\ Considered labor related. Note.--The historical market basket has been revised due to the update from a 1987 to a 1992 base year. Source: Health Care Financing Administration, Office of the Actuary. TABLE D-2.--COMPARISON OF INCREASE IN PPS HOSPITAL MARKET BASKET INDEX, AVERAGE PPS UPDATE, AND INCREASE IN PPS PAYMENTS PER CASE, FISCAL YEARS 1984-97 [In percent] ---------------------------------------------------------------------------------------------------------------- Forecasted Increase in increase in Average update operating Fiscal year market basket \2\ payments per index \1\ case \3\ ---------------------------------------------------------------------------------------------------------------- 1984............................................................ 4.9 4.7 18.5 1985............................................................ 4.0 4.5 10.5 1986............................................................ 4.3 0.5 3.2 1987............................................................ 3.7 1.2 5.4 1988............................................................ 4.7 1.5 6.0 1989............................................................ 5.4 3.3 6.6 1990............................................................ 5.5 4.7 6.5 1991............................................................ 5.2 3.4 6.0 1992............................................................ 4.4 3.0 5.2 1993............................................................ 4.1 2.7 3.8 1994............................................................ 4.3 2.0 3.6 1995............................................................ 3.6 2.0 4.0 1996............................................................ 3.5 1.5 3.4 1997............................................................ 2.5 2.0 3.9 ---------------------------------------------------------------------------------------------------------------- \1\ Based on data available when final PPS rates were set. \2\ From 1988 to 1995, there were separate updates for hospitals in large urban, other urban, and rural areas. Update for 1990 adjusted to reflect 1.22 percent across-the-board reduction in DRG weights. \3\ Data on PPS operating payments for 1984 through 1995 are for hospital accounting years beginning during each Federal fiscal year. Changes are based on cohorts of hospitals with Medicare Cost Reports in two consecutive years. Increases for 1996 and 1997 estimated from current update and case-mix index trends. Source: Prospective Payment Assessment Commission. For fiscal year 1998, the market basket increase is forecast at 2.8 percent. The Balanced Budget Act of 1997 sets the update for fiscal year 1998 at 0 percent; fiscal year 1999 at the MBI minus 1.9 percent; fiscal year 2000 at the MBI minus 1.8 percent; fiscal years 2001 and 2002 at the MBI minus 1.1 percent; and for fiscal year 2003 and each subsequent fiscal year, at the MBI percentage increase for all hospitals in all areas. DRG Weighting Factors Public Law 98-21 required the Secretary to adjust the DRG definitions and weighting factors in fiscal year 1986 and at least every 4 years thereafter to reflect changes in treatment patterns, technology, and other factors which may change the relative use of hospital resources. Public Law 99-509, however, required the Secretary to adjust the DRG definitions and weighting factors each year, beginning in fiscal year 1988. OBRA 1989 required the Secretary to reduce the weighting factor for each DRG by 1.22 percent for discharges in fiscal year 1990. In addition, the Secretary was prohibited from adjusting DRG weighting factors on other than a budget neutral basis beginning in fiscal year 1991. Table D-3 shows the 20 DRGs accounting for the largest numbers of Medicare inpatient discharges during fiscal year 1995. DRG relative weights appear in table D-21 at the end of this appendix. TABLE D-3.--TWENTY DIAGNOSIS-RELATED GROUPS (DRGs) WITH THE MOST HOSPITAL DISCHARGES, FISCAL YEAR 1995 ------------------------------------------------------------------------ Average DRG Percent length number Description Discharges total of stay (days) ------------------------------------------------------------------------ 127... Heart failure and shock.......... 706,045 6.0 6.2 89.... Simple pneumonia and pleurisy \1\ 448,587 3.8 7.1 14.... Specific cerebrovascular disorders except transient ischemic attack................. 371,815 3.2 7.3 88.... Chronic obstructive pulmonary disease......................... 368,439 3.2 6.1 209... Major joint and limb reattachment procedures...................... 344,458 2.9 6.7 430... Psychoses........................ 274,966 2.4 13.5 182... Esophagitis, gastroenteritis, and miscellaneous metabolic disorders....................... 246,431 2.1 4.9 174... G.I. hemorrhage \2\.............. 246,339 2.1 5.5 296... Nutritional and miscellaneous metabolic disorders \1\......... 231,548 2.0 6.4 79.... Respiratory infections and inflammations................... 221,867 1.9 9.3 138... Cardiac arrhythmia and conduction disorders \2\................... 211,494 1.8 4.5 416... Septicemia....................... 202,024 1.7 8.2 112... Vascular procedures except major reconstruction without pump..... 201,066 1.7 4.7 462... Rehabilitation................... 197,730 1.7 16.0 140... Angina pectoris.................. 184,772 1.6 3.5 320... Kidney and urinary tract infections \1\.................. 181,641 1.6 6.4 121... Circulatory disorders with acute myocardial infarction and cerebrovascular complications, discharged alive................ 167,202 1.4 7.4 148... Major small and large bowel procedures \2\.................. 150,746 1.3 13.4 15.... Transient ischemic attack and precerebral occlusions.......... 145,915 1.2 4.5 124... Circulatory disorders except acute myocardial infarction, with cardiac catheterization and complex diagnosis............... 145,560 1.2 4.9 ------------------------------ .... Total, all DRGs.................. 11,680,874 100.0 7.1 ------------------------------------------------------------------------ \1\ Age greater than 17, with complications. \2\ With complications. Source: Health Care Financing Administration, Bureau of Data Management and Strategy. Source and Calculation of the Hospital Wage Index The hospital wage index is used to adjust a hospital's base payment amount for the wage level of the hospital's area. This is accomplished by multiplying the labor-related component of the national standardized payment amount by a wage index. The wage index is intended to measure the average wage level for hospital workers in each urban area (metropolitan statistical area or MSA) or rural area (non-MSA parts of States) relative to the national average wage level. The Secretary is required to update the wage index annually beginning October 1, 1993. The Secretary is required to base the update on a survey of wages and wage-related costs of short-term acute care hospitals. Tables D-18, D-19, and D-20, at the end of this appendix, give the current wage index values for urban areas, for all rural areas in a State, and a special index for hospitals that are reclassified. Calculation of the index begins with the area average hospital hourly wage. For each MSA or non-MSA area (i.e., all non-MSA counties in a State), total county compensation and total paid hours data are summed separately over all counties included in the area. Then aggregate hospital compensation for the area is divided by aggregate paid hours of hospital employment in the area to produce the area average hourly wage. The hospital wage index is calculated by dividing the average hourly wage for each area by the national average hourly wage (determined by dividing national aggregate compensation by national aggregate paid hours of employment). This procedure results in an index number, such as 0.9072 (Asheville, North Carolina) or 1.2202 (Sacramento, California), for each MSA or non-MSA area in the United States. Since the national average wage level is represented by an index value of 1.000, the wage index value for any area has a direct and simple interpretation. The value of 1.2202 for Sacramento means that the hourly wage rate for hospital workers is 22.02 percent higher in the Sacramento MSA than nationwide. Thus, in computing the hospital payment rates applicable for hospitals in the Sacramento MSA, the labor-related component of the national large urban adjusted standardized payment amount ($2,752.36) is multiplied by 1.2202 in order to adjust for the higher level of hourly wage rates in this area. Similarly, the calculation of the labor portion of the rates for hospitals in Asheville would involve a reduction in the published labor-related component of the national adjusted standardized payment amount, to reflect the fact that hourly wage levels in this MSA are 9.28 percent lower than the national average (as indicated by the wage index value of 0.9072). Sample Payment Calculation The Federal large urban and other area base payment amounts per discharge for fiscal year 1998 were published in the Federal Register on August 29, 1997 (see table D-4). The payment rates for most hospitals are computed using the national adjusted operating standardized amounts. Puerto Rico has its own adjusted operating standardized amounts for DRG payment purposes. The Balanced Budget Act of 1997 changes the way the standardized amount for Puerto Rico is determined from a 25 percent Federal, 75 percent local blend rate, to a 50 percent Federal, 50 percent local rate. Each payment amount is divided into a labor-related component and a nonlabor-related component. The sum of these components represents the base payment amount that would apply for a hospital located in an area with a wage index of 1.0 (i.e., average wage rates for hospital workers in the area match the national average of hospital wage rates across all areas). TABLE D-4.--NATIONAL AND REGIONAL ADJUSTED STANDARDIZED AMOUNTS, LABOR/NONLABOR, FISCAL YEAR 1998 ---------------------------------------------------------------------------------------------------------------- Large urban areas Other areas ----------------------------------------------- Labor Nonlabor Labor Nonlabor related related related related ---------------------------------------------------------------------------------------------------------------- National average................................................ $2,776.21 $1,128.44 $2,732.26 $1,110.58 Puerto Rico: National.................................................... 2,752.36 1,118.74 2,752.36 1,118.74 Puerto Rico................................................. 1,323.01 532.55 1,302.07 524.11 ---------------------------------------------------------------------------------------------------------------- Source: Federal Register, 1997. The basic payment to a hospital for a case in a particular DRG is the applicable national payment amount, adjusted by the local wage index value and multiplied by the weighting factor for the DRG. For an example of a payment calculation, assume a hospital is located in Washington, DC. Such a hospital would be in a large urban area. Payment is based on the large urban national standardized amount. First, the labor-related portion of this amount ($2,776.21 in fiscal year 1998) is multiplied by the appropriate wage index (1.0780 for Washington, DC): $2,776.21 1.0780 = $2,992.75 To this total is added the nonlabor-related portion of the standardized amount: $2,992.75 + $1,128.44 = $4,121.19 For each discharge, this new total is then multiplied by the relative weight factor for the DRG to which the case has been assigned. These weights range from a low of 0.2086 for DRG 382 (false labor) to a high of 16.0413 for DRG 483 (certain tracheostomies). The payment rates for the sample hospital in fiscal year 1998 would therefore vary from a low of $859.68 ($4,121.19 0.2086) to a high of $66,109.25 ($4,121.19 16.0413). In addition to the basic payment amount for each case, additional payments may be made to teaching hospitals and hospitals that serve a disproportionate share of low-income patients. Any hospital may receive additional payments for outliers (cases with extraordinarily high costs or a very long stay, relative to other cases in the DRG) and for treatment of beneficiaries with end-stage renal disease. Finally, certain hospital costs are excluded from PPS and reimbursed separately. The next sections of this appendix discuss additional PPS payments and the separate reimbursement of excluded costs. ADDITIONAL PAYMENT AMOUNTS In addition to the DRG prospective payment rates, Medicare payments are made to hospitals for four additional items or services. Graduate Medical Education Financing of graduate medical education, the period of training following medical school, is provided predominantly through inpatient revenues (both hospital payments and faculty physician fees) and a complex mix of Federal and State government funds. The Federal Government is the largest single explicit financing source for graduate medical education through the Medicare Program and through its support of residencies in Veterans Administration hospitals. Medicare recognizes the costs of graduate medical education under two mechanisms: direct medical education payments and an indirect medical education adjustment. In fiscal year 1997, Medicare paid approximately $2.5 billion in direct medical education payments and $4.6 billion in indirect adjustments. Direct medical education costs The direct costs of approved medical education programs (such as the salaries of residents and teachers and other education costs for residents, for nurses, and for allied health professionals trained in provider-operated programs) are excluded from the prospective payment system. The direct medical education costs for the training of nurses and allied health professionals in provider-operated programs are paid for on a reasonable cost basis. Residency training programs for physicians are funded through formula payments based on each hospital's per resident costs. Medicare's payment to each hospital equals the hospital's cost per full-time equivalent (FTE) resident, times the weighted average number of FTE residents, times the percentage of inpatient days attributable to Medicare part A beneficiaries. Each hospital's per FTE resident amount is calculated using data from the hospital's cost reporting period that began in fiscal year 1984, increased by 1 percent for hospital cost reporting periods beginning July 1, 1985, and updated in subsequent cost reporting periods by the change in the Consumer Price Index (CPI). The number of FTE residents is calculated at 100 percent after July 1, 1986, only for residents in their initial residency period (i.e., within the minimum number of years of formal training necessary to satisfy specialty requirements for board eligibility plus 1 year, but not to exceed 5 years; residents in geriatrics or preventive medicine are allowed 2 additional years). For residents not in their initial residency period, the weighing factor is 50 percent after that date. Residents who are foreign or international medical graduates are not counted as FTE residents unless they have passed certain examinations. OBRA 1993 provided that the amounts paid per resident for the direct costs of graduate medical education would not be updated by the CPI for cost reporting periods beginning during fiscal years 1994 and 1995, except for primary care residents and residents in obstetrics and gynecology. Primary care residents are defined to include family medicine, general internal medicine, general pediatrics, preventive medicine, geriatric medicine, and osteopathic general practice. For fiscal year 1997, the per resident amount was updated by the CPI. The Balanced Budget Act of 1997 made several changes to the way in which Medicare makes payments for direct GME costs. The Balanced Budget Act of 1997 includes: (1) a cap on the total number of residents reimbursed under Medicare at the level that existed for the cost reporting period ending on or before December 31, 1996; (2) payments to qualified nonhospital providers for their direct GME costs (federally qualified health centers, rural health clinics, MedicarePlus organizations, and other appropriate providers); (3) incentive payments to teaching hospitals that voluntarily agree to reduce the number of medical residents in training; (4) a demonstration project under which direct GME payments are to be made to qualifying consortia that consist of a teaching hospital and one or more specified entities who operate an approved medical residency training program; (5) a study on the variations in the costs of hospital overhead and supervisory physician medical education costs among hospitals; and (6) the requirement that the Medicare Payment Advisory Commission (MedPAC) make recommendations on long-term payment policies regarding teaching hospitals and GME. Indirect medical education costs Additional payments are made to hospitals under PPS for the indirect costs attributable to approved medical education programs. These indirect costs may be due to a variety of factors, including the extra demands placed on the hospital staff as a result of the teaching activity or additional tests and procedures that may be ordered by residents. Congressional reports on the PPS authorizing legislation indicate that the indirect medical education payments are also to account for factors not necessarily related to medical education which may increase costs in teaching hospitals, such as more severely ill patients, increased use of diagnostic testing, and higher staff-to-patient ratios. The additional payment to a hospital is based on a formula that has provided an increase of approximately 7.7 percent in the Federal portion of the DRG payment for each 0.1 increase in the hospital's intern and resident-to-bed ratio on a curvilinear basis (i.e., the increase in the payment is less than proportional to the increase in the ratio of interns and residents to bed size). The Balanced Budget Act of 1997 includes reductions in the IME adjustment from 7.7 to 7.0 percent in fiscal year 1998; to 6.5 percent in fiscal year 1999; to 6.0 percent in fiscal year 2000; and to 5.5 percent in fiscal year 2001 and subsequent years. Disproportionate Share Hospitals Public Law 99-272 (COBRA) provided that additional payments would be made to hospitals that serve a disproportionate share of low-income patients. The adjustment was extended several times until OBRA 1990 (Public Law 101-508) made it a permanent payment adjustment. A hospital's disproportionate patient percentage is defined as the hospital's total number of inpatient days attributable to Federal Supplemental Security Income (SSI) Medicare beneficiaries divided by the total number of Medicare patient days, plus the number of Medicaid patient days divided by the total patient days. Table D-5 shows the minimum disproportionate patient percentages required to qualify for the adjustment and the formulas for computing the adjustment effective October 1, 1993. For discharges occurring after September 1994, hospitals with a disproportionate share greater than 20.2 percent would receive a disproportionate share adjustment equal to 5.88 percent plus 0.825 percent of the difference between 20.2 percent and the hospital's disproportionate share patient percentage. TABLE D-5.--CRITERIA TO QUALIFY FOR DISPROPORTIONATE SHARE ADJUSTMENT AND FORMULAS FOR COMPUTING ADDITIONAL PAYMENT, EFFECTIVE OCTOBER 1, 1993 ------------------------------------------------------------------------ Qualifying disproportionate Formula or fixed Type of hospital patient percentage percentage (P) adjustment ------------------------------------------------------------------------ Urban, 100 or more beds........ 15 percent......... (P-15)(0.6) 0.65 + 2.5. Urban, 100 or more beds........ 20.2 percent....... (P-20.2) 0.8 + 5.88. Urban, 100 or more beds........ 30 percent of 35 percent. inpatient revenue from State or local indigent care funds. Urban, under 100 beds.......... 40 percent......... 5 percent. Rural, over 500 beds........... Not specified in Same as urban, 100 law; regulations or more beds. set threshold at 15 percent. Rural, over 100 beds........... 30 percent......... 4 percent. Rural, under 100 beds.......... 45 percent......... 4 percent. Rural, sole community hospital. 30 percent......... 10 percent. Rural, rural referral center and-- (a) not a sole community 30 percent......... (P-30)(0.6) + 4.0. hospital, 100 or more beds. (b) not a sole community 45 percent......... (P-30)(0.6) + 4.0. hospital, under 100 beds. (c) also a sole community 30 percent......... Greater of 10 hospital. percent or (P- 30)(0.6) + 4.0. ------------------------------------------------------------------------ Note.--The disproportionate patient percentage (P) is equal to the sum of (a) the number of Medicare inpatient days provided to Supplemental Security Income recipients divided by total Medicare inpatient days, and (b) the number of inpatient days provided to Medicaid beneficiaries divided by total inpatient days. Source: Prospective Payment Assessment Commission. The Balanced Budget Act of 1997 includes reductions in the current DSH payment formula amounts of 1 percent for fiscal year 1998; 2 percent in fiscal year 1999; 3 percent in fiscal year 2000; 4 percent in fiscal year 2001; 5 percent in fiscal year 2002; and 0 percent in fiscal year 2003 and each subsequent fiscal year. The Balanced Budget Act of 1997 also requires the Secretary to submit to the House Ways and Means and Senate Finance Committees, no later than 1 year after enactment, a report that contains a new formula for determining additional DSH payments to hospitals. ESRD Beneficiary Discharges Effective with cost reporting periods beginning on or after October 1, 1984, additional payments are made to hospitals for inpatient dialysis provided to end-stage renal disease (ESRD) beneficiaries if total discharges of such beneficiaries from non-ESRD related DRGs account for 10 percent or more of the hospital's total Medicare discharges. A hospital meeting the criteria is paid an additional payment for each ESRD beneficiary discharge based on the estimated weekly cost of dialysis and the average length of stay of its ESRD beneficiaries. Outliers Additional amounts are paid to hospitals for atypical cases (known as ``outliers'') which have either extremely long length of stay (day outliers) or extraordinarily high costs (cost outliers) compared to most discharges classified in the same DRG. The law requires that total outlier payments to all hospitals covered by the system represent no less than 5 percent and no more than 6 percent of the total estimated PPS payments for the fiscal year. Effective with discharges occurring on or after October 1, 1984, a transferring hospital may qualify for an additional payment for extraordinarily high- cost cases meeting the criteria for cost outliers. Outlier payments are financed by an offsetting overall reduction in the base payment amount per discharge. Effective October 1, 1986, Public Law 99-509 established separate urban and rural set- aside factors for financing outlier payments. The separate set- aside factors for rural and urban hospitals for financing outlier payments ended when the other urban/rural payment differential was eliminated in fiscal year 1995, as enacted in OBRA 1990. Public Law 100-203 increased payments for outlier cases classified in DRGs relating to patients with burns from April 1, 1988, through September 30, 1989. This legislation also prohibited the Secretary from issuing any final regulations before September 1, 1988, which changed the method of payment for outlier cases (other than burn cases). The Secretary published new outlier rules on September 30, 1988, effective for discharges on or after October 1, 1988. The new rules modified the thresholds used in determining whether a case is an outlier and increased the allowable payment amounts for cost outliers. The effect of the changes increased the proportion of all outlier payments going to cost outliers. Previously, about 85 percent of outlier payments were made for length-of-stay (LOS) outliers and 15 percent for cost outliers. Under the new rules, 60 percent of payments were made for cost outliers and 40 percent for LOS outliers. (Cases that meet both length-of-stay and cost outlier criteria are paid under the policy that produces the higher payment.) To determine the amount of additional payments for outlier cases, the LOS for each case in a DRG is first compared against the applicable LOS threshold for the category. If the LOS for a case exceeds the threshold, then the case qualifies as a day outlier. In this instance, the hospital is paid its regular payment rate per discharge (for this DRG), plus a per diem amount (44 percent of the hospital's per diem rate for the DRG) for each Medicare covered day above the LOS threshold. If the case does not qualify as a day outlier, then it may qualify as a cost outlier. The case will qualify for extra payments on this basis if the hospital's Medicare covered charges for the case, adjusted to operating costs (and reduced by its indirect teaching and disproportionate share adjustments, if applicable), exceed its cost outlier threshold for the DRG. In this instance, the hospital is paid its regular payment rate per discharge for the DRG, plus the Federal portion of 75 percent of the difference between its adjusted (and reduced) charges for the case and the cost outlier threshold. In October 1991, Medicare began a transition from cost- based to prospective payment for hospital capital expenses (see below). In the August 30, 1991, final rule implementing this change, the Secretary established a unified outlier payment system for capital and operating costs. For day outliers, payments for covered days were set equal to a percentage of the combined per diem operating and capital payment rates for the DRG. For cost outliers, payments are made only if the combined operating and capital cost for the case exceed the cost outlier threshold for the DRG. As in the case of operating cost payments, standardized capital payment amounts are reduced to establish a pool for outlier payments. OBRA 1993 legislated two changes in outlier policy that became effective in fiscal year 1995. First, day outliers are phased out over a period of 4 years. By fiscal year 1999, all outlier payments will be based solely on cost. Second, cost- outlier thresholds are based on a fixed amount beyond the payment rate for each case so that hospitals incur the same loss on every case before outlier payments are applied. The Balanced Budget Act of 1997 eliminates the use of the indirect medical education adjustment and disproportionate share hospital payments as part of costs that trigger outlier payments, effective beginning in fiscal year 1998. PAYMENT FOR CAPITAL Until fiscal year 1992, Medicare paid a share of hospitals' reasonable capital-related costs, based on services used by beneficiaries as a proportion of total services furnished by the hospital. (Payments in recent years have been subject to fixed percentage reductions described below.) Four basic types of costs are allowable for Medicare reimbursement: 1. Interest on mortgages, bonds, or other borrowing used to finance capital investments or current operations. Interest costs are generally offset by any interest income earned by the hospital on investments; 2. Depreciation, figured on a straight line basis, for plant and equipment, but not for land; 3. Rental payments for plant and equipment; 4. Property taxes and insurance premiums related to capital assets. One other type of capital cost was formerly recognized under Medicare, but has not been reimbursable for hospital services since fiscal year 1989: return on equity for investor- owned hospitals. Return on equity payments provided a return to investors equivalent to what they would have earned if they had used their money for some other purpose. When the new PPS system was enacted in 1983, Congress excluded capital costs. However, the Secretary was instructed to report to Congress on methods for including capital in PPS and was authorized (but not required) to implement prospective payment for capital on or after October 1, 1986. The Secretary's authority to include capital in PPS was postponed twice. The Supplemental Appropriations Act of 1986 (Public Law 99-349) delayed prospective capital payment until October 1, 1987. The Omnibus Budget Reconciliation Act of 1987 (Public Law 100-203) delayed prospective payment until October 1, 1991. However, the Secretary was required, not merely authorized, to implement a prospective system by that date. The system was required to provide that capital payments be made on a per-discharge basis, with adjustments based on each discharge's classification under the DRGs or some similar system. At the Secretary's discretion, the system could include adjustments to reflect variations in costs of construction or borrowing, exceptions (including exceptions for hospitals with existing obligations), and adjustments to reflect hospital occupancy rates. While prospective payment for capital was delayed (see below), Congress included in budget reconciliation legislation fixed percentage reductions in amounts otherwise payable by Medicare for capital costs. These cuts began in fiscal year 1987, with a 3.5-percent reduction. Medicare would compute its share of total costs for each hospital and then reduce that computed share by 3.5 percent. The percentage reduction increased to 7 percent for the first quarter of fiscal year 1988, 12 percent for the rest of that fiscal year, and 15 percent for fiscal year 1989 through fiscal year 1991. Delays in completing budget legislation meant that there were brief intervals in 1987 and 1989 when no reduction was taken. The reductions originally applied only to capital costs related to inpatient care. Beginning in fiscal year 1990, capital payments for outpatient hospital services were also reduced. The reductions did not apply to certain types of rural hospitals defined in Medicare law, including sole community hospitals, essential access community hospitals, and rural primary care hospitals. The Omnibus Budget Reconciliation Act of 1990 (Public Law 101-508) continued capital payment reductions through fiscal year 1995, with the reduction percentage lowered to 10 percent for fiscal years 1992 through 1995. Because prospective payment began in fiscal year 1992, the reductions were not applied directly to each hospital's computed capital costs. Instead, the Secretary was required to set payments under the new system (or under the new system and PPS combined) in such a way as to achieve an aggregate inpatient hospital capital spending reduction of 10 percent, as compared to what would have been spent under the reasonable cost system. The administration's rules for prospective payment for capital costs were published in the Federal Register on August 30, 1991. The rule provides for a 10-year transition to fully prospective payment beginning October 1, 1991. Under the rule, the Secretary establishes a standard per case capital payment rate, based on average capital costs per case in fiscal year 1989 and updated for inflation and other factors. Through fiscal year 1995, the base rate was adjusted in order to meet the requirement that capital payment rates be set in such a way as to achieve an aggregate saving of 10 percent relative to what would have been paid under a full cost system. Beginning with fiscal year 1996, that requirement expired. As a result, the standardized payment rates increased by more than 20 percent. For fiscal year 1998 the standardized payment rate for capital is $371.51 ($177.57 in Puerto Rico). Rates are adjusted using the DRG weights and a geographic factor based on area wage indices. Hospitals in large urban areas receive a 3-percent increase and hospitals in Alaska and Hawaii receive a cost-of-living adjustment. A disproportionate share adjustment is provided for urban hospitals with more than 100 beds. A hospital receives approximately a 2.1 percent point increase in capital payments for each 10 percent increment in its disproportionate share percentage. An adjustment is also made for the indirect costs of medical education. This adjustment is based on the ratio of residents to average daily inpatient census. Capital payments increase approximately 2.8 percentage points for each 10 percent increment in the residents to average daily census ratio. Additional capital payments are issued for outlier cases. During a transition period that ends September 30, 2000, each individual hospital's capital payment rate is a blended rate based partly on its own historic capital costs and partly on the Federal rate. In fiscal year 1996, rates are 50 percent hospital-specific and 50 percent Federal. The hospital-specific portion will drop by 10 percent a year, until fully Federal rates take effect in fiscal year 2001. The Omnibus Budget Reconciliation Act of 1993 (Public Law 103-66) reduced the Federal rate for inpatient capital expenses by 7.4 percent to correct for inflation forecast errors. The transition rules include two provisions to assist hospitals most disadvantaged by the shift to prospective payment: a ``hold harmless'' payment system and exception payments for certain facilities. Hospitals with base year capital costs above average continue to be paid on a cost basis for the portion of their costs related to ``old'' capital investments (generally assets put in use or obligated by the end of 1990). The rest of the hospital's capital payments are based on the prospective rates. For example, if 75 percent of a hospital's costs are for depreciation and interest on a pre- 1990 building, the hospital is paid Medicare's share of those costs (subject to the current 10-percent reduction). For ``new'' capital, it receives a portion of the prospective rate based on the hospital's own ratio of new to total capital. In this case, because old capital accounts for 75 percent of costs, the hospital's new capital payment is 25 percent of the prospective rate for each case treated. This hold harmless payment system will continue until the end of the 10-year transition, or until a hospital's old capital costs drop to the point at which it is more advantageous for the hospital to shift to fully prospective payment. Exception payments are made to hospitals whose capital payments under the new system fall significantly short of their actual capital costs. Most hospitals are assured of receiving a minimum of 70 percent of costs. Specified urban hospitals with a disproportionate share of low-income patients receive at least 80 percent of costs, and rural sole community hospitals at least 90 percent. Computation of exception payments is cumulative. If a hospital received more than the minimum in 1 year but a shortfall the next, the surplus from the first year would be applied before any additional payment would be made in the second year. The Balanced Budget Act of 1997 requires the Secretary to rebase the capital payment rates for discharges occurring on or after October 1, 1997 by the actual rates in effect in fiscal year 1995, so that aggregate capital payments will equal 90 percent of what payments would have been under reasonable cost payments, with an additional reduction in the capital payment rate of 2.1 percent from October 1, 1997 through September 30, 2002. The Balanced Budget Act of 1997 eliminates the allowance for return on equity capital. In addition, when a facility undergoes a change of ownership, the Balanced Budget Act of 1997 provides for a depreciation adjustment of the historical cost of the asset recognized by Medicare, less depreciation allowed, to the owner of record as of the date of enactment, or to the first owner of record of the asset in the case of an asset not in existence as of the date of enactment. Table D-6 shows the average capital payments per case received by PPS hospitals in each year since the implementation of PPS for inpatient operating costs in 1984. The decrease in average capital payments per case in 1988 reflects the provision in the Omnibus Budget Reconciliation Acts of 1986 and 1987 that reduced Medicare payments below costs. The decrease in 1994 reflects the provision in the Omnibus Budget Reconciliation Act of 1993 that corrected for previous errors in setting the base capital payment rates. Capital payments generally have stayed between 8 and 9 percent of total inpatient payments. The proportion of capital costs covered by those payments fell from 100 percent under cost-based reimbursement to a low of 87.4 percent in 1990. The implementation of capital PPS initially resulted in increased payment-to-cost ratios, but those fell as the payment rates were adjusted to reflect more accurate data. The jump in the payment-to-cost ratio in 1995--when Medicare inpatient capital payments exceeded cost for the first time ever--reflects the elimination of the budget neutrality requirement in fiscal year 1996. The per case capital payment amount varies widely by hospital group, as shown in table D-7. Urban hospitals had an average payment rate of $682 in 1995, for example, while rural hospitals received only $422 per case. Major teaching hospitals were paid $922 for each case, while nonteaching hospitals got $545. However, the share of total PPS inpatient payments, which include both operating and capital payments, was very similar for different types of hospitals. Moreover, the share of capital costs covered by these payments frequently was higher for groups with lower payment amounts. Despite urban hospitals' much higher average payment, that amount equalled 101.5 percent of their capital costs, while rural hospitals were paid 102.3 percent of their capital costs. TABLE D-6.--PPS CAPITAL PAYMENTS PER CASE, SHARE OF TOTAL PPS INPATIENT PAYMENTS, AND RATIO OF PAYMENTS TO COSTS, 1984-95 ------------------------------------------------------------------------ In percent --------------------------- Capital Share of Year payments per total PPS Payment-to- case inpatient cost ratio payments ------------------------------------------------------------------------ 1984.......................... $310 8.1 100.0 1985.......................... 371 8.6 100.0 1986.......................... 409 9.1 99.3 1987.......................... 426 9.0 97.5 1988.......................... 423 8.5 90.2 1989.......................... 463 8.6 87.9 1990.......................... 476 8.3 87.4 1991.......................... 510 8.4 87.6 1992.......................... 586 9.1 97.2 1993.......................... 589 8.9 95.2 1994.......................... 585 8.5 92.7 1995.......................... 628 8.8 101.6 ------------------------------------------------------------------------ Note.--Data on PPS capital costs and payments are for hospital accounting years beginning during each Federal fiscal year. Hospitals in Massachusetts and New York excluded from data in 1984 and 1985; hospitals in New Jersey excluded from data in 1984 through 1988; hospitals in Maryland excluded from data in all years. Source: Prospective Payment Assessment Commission analysis of Medicare Cost Report data from the Health Care Financing Administration. TABLE D-7.--PROSPECTIVE PAYMENT SYSTEM CAPITAL PAYMENTS PER CASE, SHARE OF TOTAL PPS INPATIENT PAYMENTS, AND RATIO OF PAYMENTS TO COSTS BY HOSPITAL GROUP, 1995 ------------------------------------------------------------------------ In percent --------------------------- Capital Share of Hospital group payments per total PPS Payment-to- case inpatient cost ratio payments ------------------------------------------------------------------------ Urban......................... $682 8.8 101.5 Rural......................... 422 8.9 102.3 Large urban................... 722 8.7 102.3 Other urban................... 631 9.0 100.3 Rural referral................ 517 9.2 96.5 Sole community................ 415 8.7 106.3 Other rural................... 392 8.9 103.5 Major teaching................ 922 7.9 105.8 Other teaching................ 668 8.7 100.6 Nonteaching................... 545 9.3 100.9 Disproportionate share large urban........................ 768 8.3 104.1 Disproportionate share other urban........................ 646 8.7 100.6 Disproportionate share rural.. 431 9.0 98.6 Nondisproportionate share..... 572 9.2 100.8 Teaching and disproportionate share........................ 767 8.2 103.3 Teaching only................. 683 8.7 100.4 Disproportionate share only... 575 9.1 100.7 Nonteaching nondisproportionate share.... 523 9.5 101.1 Voluntary..................... 640 8.8 101.3 Proprietary................... 665 9.8 102.2 Urban government.............. 664 8.0 103.4 Rural government.............. 369 8.4 104.3 All hospitals................. $628 8.8 101.6 ------------------------------------------------------------------------ Source: Prospective Payment Assessment Commission analysis of Medicare Cost Report data from the Health Care Financing Administration. PAYMENTS ON A REASONABLE COST BASIS Costs for certain items are excluded from the prospective payment system and thus are not included in the prospective payment rates. As explained in the sections below, Medicare pays for its share of several costs according to the former reasonable cost-based system. Physicians in Teaching Hospitals Physician services in hospitals are paid under the physician fee schedule. If a teaching hospital so elects, the direct medical and surgical services of physicians in such hospitals would be paid for on the basis of reasonable costs. Organ Acquisition Costs The estimated net expenses associated with Medicare organ acquisition in certified transplantation centers are excluded from the prospective payment system and paid on a reasonable cost basis. Passthrough Payments for Hemophilia Inpatients OBRA 1989 excluded the cost of administering blood clotting factors for hemophilia inpatients from PPS, for items furnished from June 19, 1990, through December 19, 1991. OBRA 1993 further extended this provision through fiscal year 1994. The price per unit for the blood clotting factors was set at a predetermined rate, in consultation with ProPAC, and the cost of administering the blood clotting factors was determined by multiplying a predetermined price per unit of blood clotting factor by the number of units provided to the individual. The Balanced Budget Act of 1997 makes the payment for the costs of administering blood clotting factor permanent effective October 1, 1997. Bad Debts of Medicare Beneficiaries An additional payment is made to hospitals for bad debts attributable to unpaid deductible and copayment amounts related to covered services received by Medicare beneficiaries. The Secretary is prohibited from making any change in the policy in effect on August 1, 1987, including changes in hospital documentation requirements. OBRA 1989 prohibited the Secretary from requiring hospitals to change their bad debt collection policy if a fiscal intermediary accepted the policy in accordance with the rules in effect as of August 1, 1987, for indigency determination procedures, for recordkeeping, and for determining whether to refer a claim to an external collection agency. For such facilities, the Secretary also may not collect from the hospital on the basis of an expectation of a change in the hospital's collection policy. The Balanced Budget Act of 1997 reduces bad debt payments by 25 percent in fiscal year 1998; 40 percent in fiscal year 1999; and 45 percent in fiscal year 2000 and each subsequent fiscal year. SPECIAL TREATMENT OF CERTAIN FACILITIES UNDER PPS Sole Community Hospitals Sole community hospitals (SCHs) are hospitals that, because of factors such as isolated location, weather conditions, travel conditions, or absence of other hospitals, are the sole source of inpatient services reasonably available in a geographic area, or are located more than 35 road miles from another hospital. In addition, the Secretary is authorized to designate a hospital as an SCH if, by reason of factors such as travel time to the nearest alternative source of appropriate inpatient care, location, weather conditions, travel conditions, or absence of other like hospitals, the Secretary determines that it is the sole source of inpatient hospital services reasonably available to individuals in a geographic area. OBRA 1989 established new payment provisions that apply to all SCHs for cost reporting periods beginning after April 1, 1990. An SCH may receive the higher of the following rates as the basis of reimbursement: a target amount based on 100 percent hospital-specific prospective rates based on fiscal year 1982 costs updated to the present; a target amount based on hospital-specific prospective rates based on fiscal year 1987 costs updated to the present; or the Federal PPS rate. Current SCHs not meeting the criteria are allowed to continue to qualify for payments as an SCH. OBRA 1989 made permanent the provision by which an SCH may request additional payments if the hospital experiences a decrease of more than 5 percent in its total inpatient cases due to circumstances beyond its control. An SCH may receive such payments if it meets sole community hospital criteria but is not being paid as a sole community hospital. As of September 1997, 641 hospitals were classified as sole community providers. Medicare Dependent Hospitals OBRA 1989 created a new classification of hospitals termed Medicare dependent hospitals. Medicare dependent hospitals are hospitals that are located in a rural area, have 100 beds or less, are not classified as a sole community provider, and for which not less than 60 percent of inpatient days or discharges in the hospital cost reporting period that began during fiscal year 1987 were attributable to Medicare. These hospitals are reimbursed in the same fashion as sole community providers during cost reporting periods beginning on or after April 1, 1990, and ending on or before March 31, 1993. As of September 1997, there were 366 Medicare dependent hospitals. OBRA 1993 (Public Law 103-66) extended additional payments to Medicare dependent hospitals through September 30, 1994, on a phase-down basis. The Balanced Budget Act of 1997 extends the MDH Program through October 1, 2001. Referral Centers The Secretary is authorized to provide exceptions and adjustments as appropriate for rural referral centers (RRCs). These centers are defined as: 1. Rural hospitals having 275 or more beds; 2. Hospitals having at least 50 percent of their Medicare patients referred from other hospitals or from physicians not on the hospital's staff, at least 60 percent of their Medicare patients residing more than 25 miles from the hospital, and at least 60 percent of the services furnished to Medicare beneficiaries are furnished to those who live 25 miles or more from the hospital; or 3. Rural hospitals meeting the following criteria for hospital cost reporting periods beginning on or after October 1, 1985: --A case-mix index equal to or greater than the median case mix for all urban hospitals (the national standard), or the median case mix for urban hospitals located in the same census region, excluding hospitals with approved teaching programs. The case-mix index is a measure of the relative costliness of the hospital's mixture of cases among the DRGs compared to the national average mixture of Medicare cases; --A minimum of 5,000 discharges, the national discharge criterion (3,000 in the case of osteopathic hospitals), or the median number of discharges in urban hospitals for the region in which the hospital is located; and --At least one of the following three criteria: more than 50 percent of the hospital's medical staff are specialists, at least 60 percent of discharges are for inpatients who reside more than 25 miles from the hospital, or at least 40 percent of inpatients treated at the hospital have been referred either from physicians not on the hospital's staff or from other hospitals. Referral centers are paid prospective payments based on the applicable urban payment amount rather than the rural payment amount, as adjusted by the hospital's area wage index. The applicable amount is the ``other urban'' rate (i.e., the rate for urban areas with 1 million or fewer people) for all referral centers except those (if any) located in MSAs greater than 1 million. OBRA 1993 extended the classification through fiscal year 1994 for those referral centers classified as of September 30, 1992. As of September 1997, 158 hospitals were qualified as referral centers. Although referral centers loose some of the benefit of their classification status because of the equalization of the other urban and rural payment rates in fiscal year 1995, referral centers continue to be entitled to preferential consideration before the Medicare Geographic Classification Review Board (see below). The Balanced Budget Act of 1997 provides that hospitals designated as RRCs since fiscal year 1991 are permanently classified as RRCs. The Balanced Budget Act of 1997 also provides that any hospital ever classified as an RRC cannot be denied a request for geographic reclassification on the basis of any comparison of its average hourly wage with the average hourly wage of hospitals in the area where the RRC is located. Hospitals in Rural Counties Treated as Urban Counties Public Law 100-203 provided for the reclassification of rural hospitals as urban if the county in which the hospital was located was adjacent to two or more MSAs and met criteria regarding commuting patterns of its residents to the central counties of the adjacent MSAs. OBRA 1989 (Public Law 101-239) established the Medicare Geographic Classification Review Board to consider appeals by hospitals for a change in classification from rural to urban, or from one urban area to another urban area. The Board was created to determine whether a hospital should be redesignated to an area with which it has close proximity for purposes of using the other area's standardized amount, wage index, or both. For geographic reclassifications effective for discharges in fiscal year 1994 and subsequent years, a hospital may seek reclassification to only one area. Urban hospitals must be no more than 15 miles from the area to which they seek reassignment, and rural hospitals must be no more than 35 miles from such an area. A hospital may qualify for the payment rate of another area if it proves that its incurred costs are comparable to those of hospitals in that area. To use an area's wage index, a hospital must demonstrate that: (1) its average hourly wage is equal to at least 84 percent of the average hourly wage of hospitals in the area to which it seeks redesignation; and (2) its average hourly wage weighted for occupational categories is at least 90 percent of the average hourly wage of hospitals in the area to which its seeks redesignation. For geographic reclassifications effective for discharges in fiscal year 1994 and subsequent years, the wage index guidelines were revised to specify, in addition, that a hospital cannot be reclassified unless its average hourly wage is at least 108 percent of the average hourly wage of the area in which it is located. Effective for fiscal year 1996 and subsequent years, a hospital may not be reclassified for purposes of using another area's standardized amount if the area to which the hospital seeks reclassification does not have a higher standardized amount than that currently received by the hospital. In addition, a hospital that seeks reclassification for the purpose of using another area's wage index may apply for reclassification only to an area that has a higher pre- reclassified average hourly wage than that of the hospital's original geographic area. For fiscal year 1998, 313 rural hospitals (14.1 percent) and 109 (4 percent) urban hospitals have been reclassified by the Board. The Balanced Budget Act of 1997 provides that hospitals can request geographic reclassification for the purposes of receiving additional DSH payments for the period ending 30 months after enactment. HOSPITALS EXCLUDED FROM THE PROSPECTIVE PAYMENT SYSTEM PPS-Exempt Hospitals The following hospitals are by law excluded from the prospective payment system and are paid on the basis of reasonable costs, subject to the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) rate of increase limits: psychiatric hospitals, rehabilitation hospitals, psychiatric or rehabilitation units which are distinct parts of a hospital, alcohol and drug abuse hospitals and such distinct units of hospitals (for cost reporting periods beginning before October 1, 1987), children's hospitals (with patients averaging under 18 years of age), long-term hospitals (with an average inpatient length of stay greater than 25 days), and cancer hospitals (hospitals extensively involved in treatment for and research on cancer) classified as such before December 31, 1990. In addition, the act provides an exemption for any hospital classified as a cancer hospital before December 31, 1991, that is located in a State that has a PPS waiver under section 1814(b). In addition, there are special cases in which the prospective payment system is not applied, such as emergency services provided to Medicare beneficiaries in hospitals not participating in Medicare. OBRA 1990 increased the cost limits imposed on hospitals exempt from PPS. Under prior law, hospitals with costs in excess of the cost limits imposed by the Tax Equity and Fiscal Responsibility Act (TEFRA) would be reimbursed for their cost up to the TEFRA limit. Under OBRA 1990, hospitals with costs in excess of the cost limits imposed by TEFRA receive 50 percent of the costs that are in excess of the limit, up to a maximum of 110 percent of the limit. In addition, the Secretary is directed to develop a new prospective payment methodology for exempt hospitals, or to substantially modify the current target-rate system. OBRA 1993 provided for an update factor to the cost limits of market basket minus 1.0 percentage point for fiscal years 1994 through 1997. Hospitals with operating costs in fiscal year 1990 that exceeded the target amount by more than 10 percent are exempt from the update reduction, with partial reductions applied to hospitals near the threshold. Hospitals reimbursed under approved State cost control systems are also excluded from the prospective rates. For PPS-exempt facilities, the Balanced Budget Act of 1997 sets the fiscal year 1998 update at 0 percent, and for fiscal years 1999-2002, the update factor will vary depending on a hospital's target amount and costs. For hospitals (1) with costs that equal or exceed their target amounts by 10 percent or more, the update will be equal to the market basket; (2) that exceed their target, but by less than 10 percent, the update factor will be equal to zero or, if greater, the market basket minus 0.25 percentage points for each percentage point by which costs are less than 10 percent over the target; (3) that are either at their target, or below (but not below \2/3\ of the target amount for the hospital), the update factor will be equal to zero or, if greater, the market basket percentage minus 2.5 percentage points; or (4) that do not exceed \2/3\ of their target amount, the update factor will be equal to 0 percent. In addition, the Balanced Budget Act of 1997 includes several provisions affecting Medicare payments to PPS-exempt hospitals and units. The Balanced Budget Act of 1997 reduces the capital payment update amount for PPS-exempt hospitals and units by 15 percent for fiscal years 1998-2002. The Balanced Budget Act of 1997 establishes a cap on PPS-exempt TEFRA limits, also known as target amounts, for PPS-exempt hospitals or units for cost reporting periods beginning on or after October 1, 1997 and before October 1, 2002. The Secretary is required to estimate the 75th percentile of the target amounts for hospitals for cost reporting periods ending during fiscal year 1996, and then update the amount up to the first cost reporting period beginning on or after October 1, 1997, by a factor equal to the market basket percentage increase. For cost reporting periods beginning during each of fiscal years 1999- 2002, the Secretary is required to update the amount by a factor equal to the market basket increase. The Balanced Budget Act of 1997 provides for changing bonus payments to PPS-exempt facilities to equal the lesser of: (1) 15 percent of the amount by which the target amount exceeds the amount of operating costs, or (2) 2 percent of the target amount. In addition, for cost reporting periods beginning on or after October 1, 1997, the Balanced Budget Act of 1997 provides for continuous improvement bonus payments for certain eligible hospitals. The Balanced Budget Act of 1997 establishes different payment and target amount rules for new PPS-exempt hospitals or distinct-part units within hospitals that first received Medicare payments on or after October 1, 1997. The Balanced Budget Act of 1997 provides PPS-exempt hospitals and distinct units of hospitals that received Medicare payments for services furnished before January 1, 1990, with the option of rebasing the hospital's target amount for the 12-month cost reporting period beginning during fiscal year 1998. The Balanced Budget Act of 1997 also requires the Secretary to establish a case-mix adjusted PPS for rehabilitation hospitals and distinct-part units, effective beginning in fiscal year 2001. The Secretary is required to establish: (1) classes of discharges of rehabilitation facilities by patient case-mix groups based on impairment, age, related prior hospitalization, comorbidities, and functional capability of the discharged individual and other appropriate factors; and (2) a method of classifying specific discharges from rehabilitation facilities within these groups. The Secretary is further required to collect data to develop, establish, administer, and evaluate a case-mix adjusted prospective payment system for long-term care hospitals. State Systems Section 1886(c) of the Social Security Act (as added by TEFRA) gave the HHS Secretary discretion to reimburse hospitals in a State according to the State's hospital reimbursement control system rather than according to Medicare's reimbursement methods if the State requests this change and if HHS determines that the State system meets certain requirements. Currently, only Maryland has a waiver to operate its own system. New York has a waiver covering four counties participating in the Finger Lakes Area Hospital Corporation rural hospital payment demonstration. Public Laws 98-21 and 98-369 added several more requirements for State systems. According to final regulations published by HHS on April 24, 1986 (51 F.R. 15481) implementing these legislative changes, HHS has the discretion to allow Medicare hospital reimbursement to be made in accordance with a State reimbursement control system if the chief executive officer of the State requests approval of the State system, and provided that the State system: 1. Applies to substantially all non-Federal acute care hospitals in the State; 2. Applies to at least 75 percent of all inpatient revenues or expenses for the State; 3. Provides assurances that payers, hospital employees and patients in the State will be treated equitably under its system; 4. Provides assurances that its system will not result in greater Medicare expenditures over 36-month periods; 5. Does not preclude health maintenance organizations (HMOs) or competitive medical plans (CMPs) from negotiating directly with hospitals concerning payment for inpatient services; 6. Limits hospital charges to Medicare beneficiaries to deductibles, coinsurance, and services for which the beneficiary would not be entitled to have payment made under Medicare part A; and prohibits payment under part B of Medicare for nonphysician services provided to hospital inpatients unless this prohibition is waived. Public Law 101-239 (OBRA 1989) required the Secretary's test of effectiveness of a State cost containment system to be based on the aggregate rate of increase from October 1, 1984, to the most recent date for which annual data are available. This provision also extended the waiver for the New York rural hospital payment demonstration. Special provisions apply to States that have existing demonstration projects approved by HCFA under section 402 of the Social Security Amendments of 1967 or section 222(a) of the Social Security Amendment of 1972 for the operation of State reimbursement control systems. HHS approval of a State's application to continue the operation of a system upon expiration of the demonstration project is mandatory if, and for so long as, the system meets the minimum requirements described in the six items listed above. Public Law 101-508 revised the Secretary's test of effectiveness of a State cost containment system to be based on the rate of increase in costs per hospital inpatient admission as compared to the rate of increase in such costs with respect to all hospitals between January 1, 1981, and the present. In addition, OBRA 1990 provided that a State no longer qualifying for a PPS waiver be provided with a reasonable period, not to exceed 2 years, for transition from the State system to the national payment system, and required restoration of the waiver if the State returned to compliance during the transition period. ADMINISTRATION Prospective Payment Assessment Commission/Medicare Payment Advisory Commission The Prospective Payment Assessment Commission (ProPAC) was a commission composed of 17 independent experts charged with advising the Congress on PPS and Medicare payment policies. The Balanced Budget Act of 1997 replaces ProPAC and the Physician Payment Review Commission with a 15-member Medicare Payment Advisory Commission (MedPAC). MedPAC is required to submit annual reports to Congress on March 1 and June 1 concerning the Medicare Program. Administrative and Judicial Review Administrative and judicial appeals are allowed under procedures and authorities already established under the Medicare Program. However, the law precludes administrative and judicial review of: (1) the ``budget neutrality'' adjustment (see above), and (2) the DRG payment amounts, including the establishment of DRGs, the methodology for classifying discharges within DRGs, and the DRG weighting factors. Review Activities Public Law 97-248, the Tax Equity and Fiscal Responsibility Act of 1982 (known as TEFRA), replaced the existing Professional Standards Review Organization (PSRO) Program with the Utilization and Quality Control Peer Review Program. The Secretary of the Department of Health and Human Services was required to enter into performance-based contracts with physician-sponsored or physician-access organizations known as peer review organizations (PROs). As a condition of receiving payments under the prospective payment system, hospitals are required to enter into an agreement with a PRO under which the PRO reviews the validity of diagnostic and procedural information provided by the hospitals; the completeness, adequacy and quality of care provided; and the appropriateness of admissions patterns, discharges, lengths of stay, transfers, and services furnished in outlier cases. Since 1982, the statute governing the PRO Program has been amended numerous times, and as of October 1996 the PROs are operating under the fifth ``scope of work.'' HISTORICAL TRENDS IN PPS PAYMENTS, COSTS, AND MARGINS Medicare Payments to Hospitals In fiscal year 1997, hospitals will be paid an estimated $124.7 billion for Medicare-covered services, as shown in table D-8. The largest share of this amount, $78.9 billion, will be for PPS inpatient operating costs. The Medicare Program will provide about 90 percent of these payments and the other 10 percent will come from beneficiaries for deductibles and coinsurance. PPS hospitals will also receive some $8.0 billion in capital payments. Another $13.2 billion will be paid for operating and capital costs related to services provided in PPS-excluded facilities, which include psychiatric and rehabilitation hospitals and distinct-part units as well as long-term and children's hospitals. Payments for Medicare- covered hospital outpatient services will be $20.9 billion, with almost 40 percent coming from beneficiaries. Hospitals will also receive $2.5 billion for the direct costs of training programs, including those for interns and residents and for nursing and allied health personnel. Hospital-based postacute care facilities will be paid an estimated $9.2 billion. Policy Changes and PPS Operating Payments Since the implementation of PPS, the distribution of Medicare payments to hospitals has changed. Some redistribution has resulted from changes in hospital behavior, but much of it is attributable to policy decisions. These include the transition to national average payment rates, reductions in teaching hospital payments, the addition of a disproportionate share adjustment and increases in the size of that adjustment for many hospitals, and larger update factors for rural hospitals in recent years. Table D-9 shows the factors affecting the PPS payment rate for different types of hospitals. The average standardized amount is somewhat higher for hospitals in large urban areas than other hospitals; the first column of data in this table shows the variation in payments if hospitals were paid only based on the standardized amount for the area in which they are located. The wage index reflects the average hourly wage for hospitals located there; if hospitals' payments were adjusted by the wage index for the area in which they were located, their payments would be adjusted as indicated in the second column of the table. TABLE D-8.--TOTAL MEDICARE PAYMENTS TO HOSPITALS BY PAYMENT TYPE, FISCAL YEAR 1997 ------------------------------------------------------------------------ Amount Payment category (in billions) ------------------------------------------------------------------------ PPS......................................................... $78.9 Program................................................. 72.0 Operating........................................... 64.0 Capital............................................. 8.0 Beneficiary copayments.................................. 6.9 PPS-excluded................................................ 13.2 Program................................................. 12.0 Operating........................................... 11.2 Capital............................................. 0.8 Beneficiary copayments.................................. 1.2 Outpatient.................................................. 20.9 Program................................................. 12.6 Beneficiary copayments.................................. 8.3 Postacute \1\................................................ 9.2 Program \1\............................................. 9.0 Beneficiary copayments \1\.............................. 0.2 Direct medical education.................................... 2.5 Interns and residents................................... 2.2 Nursing and allied health................................ 0.3 ---------- Total........................................... 124.7 ------------------------------------------------------------------------ \1\ Estimate based on Prospective Payment Assessment Commission analysis of data from the Health Care Financing Administration and the Congressional Budget Office. Source: Prospective Payment Assessment Commission analysis of Congressional Budget Office March 1997 estimates. Certain hospitals receive other adjustments to their base payment rates under PPS. Hospitals in Alaska and Hawaii have a cost-of-living adjustment to recognize the higher cost of nonlabor input there. In addition, sole community hospitals have the option of payments based on their own updated base- year costs or the PPS rate. Hospitals also can be reclassified into areas where they are not located for the purpose of qualifying for a higher standardized payment amount or wage index. These factors may substantially increase payments to some hospitals, although by definition they have no impact on total PPS payments. PPS payments also depend on the mix of cases treated by the hospital; this can vary widely across hospitals and groups of hospitals. Moreover, additional payments are made for cases that are exceptionally costly relative to others in the same category; these cases and these payments are not distributed evenly across hospitals. Finally, the PPS payment is adjusted for teaching hospitals and hospitals that treat a disproportionate share of low-income patients; these two adjustments substantially affect the distribution of payments. TABLE D-9.--FACTORS AFFECTING FISCAL YEAR 1997 PPS OPERATING PAYMENTS PER CASE, BY HOSPITAL GROUP, FISCAL YEAR 1995 ---------------------------------------------------------------------------------------------------------------- PPS Average Average Other Base Average payments Hospital group standardized wage payment payment case- Outlier IME/DSH per case amount (in index rate rate (in mix factor factor (in dollars) factors dollars) index dollars) ---------------------------------------------------------------------------------------------------------------- Urban......................... $3,882 1.02 1.00 $3,935 1.50 1.06 1.17 $7,281 Rural......................... 3,847 0.79 1.04 3,416 1.21 1.03 1.02 4,392 Large urban................... 3,908 1.09 1.00 4,137 1.50 1.06 1.19 7,836 Other urban................... 3,847 0.93 1.00 3,671 1.50 1.06 1.13 6,550 Rural referral................ 3,847 0.79 1.07 3,510 1.37 1.03 1.04 5,261 Sole community................ 3,847 0.80 1.09 3,631 1.16 1.01 1.02 4,476 Other rural................... 3,847 0.78 1.01 3,294 1.18 1.03 1.02 4,081 Major teaching................ 3,895 1.12 1.00 4,208 1.66 1.07 1.49 11,083 Other teaching................ 3,879 1.00 1.00 3,880 1.55 1.06 1.14 7,225 Nonteaching................... 3,868 0.93 1.01 3,746 1.33 1.04 1.05 5,474 DSH: Large urban............... 3,908 1.10 1.00 4,168 1.52 1.06 1.31 8,747 Other urban............... 3,847 0.92 1.00 3,645 1.52 1.06 1.18 6,919 Rural..................... 3,847 0.76 1.03 3,324 1.21 1.03 1.07 4,504 Non-DSH....................... 3,874 0.96 1.01 3,833 1.39 1.05 1.04 5,810 Teaching and DSH.............. 3,883 1.03 1.00 3,963 1.59 1.06 1.32 8,817 Teaching only................. 3,885 1.04 1.01 4,004 1.56 1.06 1.10 7,283 DSH only...................... 3,867 0.94 1.00 3,719 1.37 1.05 1.11 5,960 No teaching or DSH............ 3,869 0.93 1.01 3,741 1.31 1.04 1.00 5,125 Urban <100 beds............... 3,877 1.00 0.99 3,861 1.21 1.04 1.01 4,915 Urban 100-199 beds............ 3,881 1.03 1.00 3,938 1.36 1.04 1.11 6,198 Urban 200-299 beds............ 3,880 1.02 1.00 3,931 1.47 1.05 1.11 6,752 Urban 300-399 beds............ 3,880 1.01 1.00 3,902 1.55 1.06 1.16 7,451 Urban 400-499 beds............ 3,884 1.02 1.00 3,945 1.59 1.06 1.23 8,210 Urban 500+ beds............... 3,887 1.04 1.00 3,994 1.70 1.07 1.30 9,438 Rural <50 beds................ 3,847 0.79 1.01 3,304 1.06 1.01 1.01 3,605 Rural 50-99 beds.............. 3,847 0.79 1.03 3,383 1.16 1.02 1.01 4,079 Rural 100-149 beds............ 3,847 0.79 1.05 3,437 1.26 1.03 1.02 4,581 Rural 150-199 beds............ 3,847 0.79 1.05 3,433 1.27 1.04 1.03 4,712 Rural 200+ beds............... 3,847 0.78 1.08 3,528 1.39 1.04 1.06 5,511 New England................... 3,887 1.14 1.00 4,299 1.42 1.04 1.17 7,439 Middle Atlantic............... 3,888 1.10 1.00 4,197 1.42 1.07 1.21 7,704 South Atlantic................ 3,868 0.91 1.01 3,654 1.46 1.05 1.13 6,342 East North Central............ 3,876 0.96 1.01 3,813 1.43 1.05 1.13 6,479 East South Central............ 3,855 0.81 1.01 3,377 1.38 1.06 1.11 5,490 West North Central............ 3,865 0.86 1.02 3,568 1.44 1.04 1.10 5,901 West South Central............ 3,867 0.85 1.01 3,494 1.45 1.06 1.13 6,080 Mountain...................... 3,873 0.94 1.02 3,795 1.48 1.04 1.09 6,400 Pacific....................... 3,887 1.20 1.00 4,453 1.49 1.04 1.16 8,063 Voluntary..................... 3,877 1.00 1.01 3,905 1.46 1.05 1.14 6,852 Proprietary................... 3,875 0.95 1.01 3,770 1.44 1.05 1.09 6,254 Urban government.............. 3,874 0.99 1.00 3,837 1.48 1.06 1.32 7,995 Rural government.............. 3,847 0.77 1.02 3,306 1.15 1.03 1.02 4,030 All hospitals......... 3,875 0.98 1.01 3,856 1.44 1.05 1.15 6,709 ---------------------------------------------------------------------------------------------------------------- Note.--PPS payments are estimated using rules in effect on October 1, 1996. Excludes hospitals in Maryland. Averages are weighted by the number of Medicare cases in each hospital. The other factors category is the combined effect of cost-of-living adjustments for hospitals in Alaska and Hawaii, geographic reclassification, and payment adjustments for sole community hospitals. IME = indirect medical education. DSH = disproportionate share. Source: ProPAC PPS payment model and MedPAR data for fiscal year 1995 from the Health Care Financing Administration. Distribution of PPS Hospitals, Cases, and Operating Payments Table D-10 shows estimated PPS operating payments by hospital group for fiscal year 1997. The distribution of payments varies widely across hospital groups. For example, although 56 percent of all PPS hospitals are located in urban areas, these hospitals account for 80 percent of all PPS discharges and receive 87 percent of all PPS operating payments. By contrast, rural hospitals account for 44 percent of PPS hospitals, but only 20 percent of PPS discharges and 13 percent of PPS operating payments. The indirect medical education (IME) adjustment is intended to recognize hospitals' indirect costs of operating approved graduate medical education programs. The disproportionate share (DSH) adjustment is intended to compensate hospitals that treat large proportions of low-income patients. These two adjustments account for $9.1 billion in 1997. Almost all of these payments go to hospitals located in urban areas. Outlier payments are intended to protect hospitals from the risk of financial losses due to cases with exceptionally long stays or high costs. Large urban hospitals and teaching hospitals and those located in the Middle Atlantic region receive the highest proportion of outlier payments. Small urban hospitals and all rural hospitals receive the lowest percentage of outlier payments. For all PPS hospitals, the basic DRG payment is estimated to account for 83 percent of fiscal year 1997 PPS operating payments. IME, DSH, and outlier payments are expected to account for 17 percent of the total, or about $12.2 billion. Rural hospitals receive only 5 percent of their total PPS operating payments through these provisions, while urban hospitals count on these mechanisms for 19 percent of their PPS operating payments. This is because teaching and disproportionate share hospitals are much more likely to be located in cities and urban hospitals are much more likely to treat more complex cases that become outliers. Trends in PPS Operating Payments and Costs The increase in PPS operating payments per case has differed from the update factor in every year, as shown in table D-11. In the first 2 years of prospective payment, payments per discharge rose sharply, by 18.5 percent and 10.5 percent, respectively. This is attributable to two factors: overestimation of the base year hospital costs upon which the initial PPS rates were set due to the use of unaudited Medicare Cost Reports, and a large increase in the aggregate CMI in the early years because of more emphasis on accurate DRG coding and complete documentation of the medical record. TABLE D-10.--DISTRIBUTION OF PPS HOSPITALS AND DISCHARGES AND ESTIMATED FISCAL YEAR 1997 PPS OPERATING PAYMENTS BY HOSPITAL GROUP -------------------------------------------------------------------------------------------------------------------------------------------------------- PPS operating payments (in billions of dollars) Number of Percent of Percent of -------------------------------------------------------- Hospital group PPS PPS PPS Indirect hospitals discharges operating Total Outlier medical Disproportionate payments education share hospitals -------------------------------------------------------------------------------------------------------------------------------------------------------- Urban................................................... 2,832 80 87 $61.7 $2.8 $4.5 $4.3 Rural................................................... 2,243 20 13 9.2 0.2 0.1 0.2 Large urban............................................. 1,567 46 53 37.7 1.7 3.3 2.8 Other urban............................................. 1,265 35 34 24.0 1.1 1.1 1.5 Rural referral.......................................... 130 4 3 2.1 0.1 0.0 (\1\) Sole community.......................................... 648 4 3 2.0 (\1\) (\1\) (\1\) Other rural............................................. 1,465 12 7 5.1 0.1 (\1\) 0.1 Major teaching.......................................... 263 12 20 14.1 0.6 3.1 1.5 Other teaching.......................................... 811 32 34 24.3 1.1 1.5 1.5 Nonteaching............................................. 4,001 56 46 32.5 1.3 0.0 1.5 Disproportionate share large urban...................... 786 25 32 22.8 0.9 2.5 2.8 Disproportionate share other urban...................... 679 22 23 16.2 0.8 0.9 1.5 Disproportionate share rural............................ 448 5 4 2.6 0.1 (\1\) 0.2 Nondisproportionate share............................... 3,162 48 41 29.4 1.3 1.1 0.0 Teaching and disproportionate share..................... 701 29 38 26.8 1.1 3.5 3.0 Teaching only........................................... 373 15 16 11.7 0.6 1.1 0.0 Disproportionate share only............................. 1,212 23 21 14.8 0.6 0.0 1.5 Nonteaching nondisproportionate share................... 2,789 33 25 17.7 0.7 0.0 0.0 Urban <100 beds......................................... 700 4 3 2.3 0.1 (\1\) (\1\) Urban 100-199 beds...................................... 925 18 16 11.5 0.4 0.2 0.9 Urban 200-299 beds...................................... 567 20 20 14.5 0.6 0.6 0.9 Urban 300-399 beds...................................... 316 15 17 12.0 0.6 0.8 0.8 Urban 400-499 beds...................................... 157 9 11 7.7 0.4 0.8 0.6 Urban 500+ beds......................................... 167 14 19 13.6 0.7 2.0 1.1 Rural <50 beds.......................................... 1,175 4 2 1.5 (\1\) (\1\) (\1\) Rural 50-99 beds........................................ 656 6 4 2.6 0.1 (\1\) (\1\) Rural 100-149 beds...................................... 240 4 3 2.1 0.1 (\1\) (\1\) Rural 150-199 beds...................................... 97 3 2 1.3 (\1\) (\1\) (\1\) Rural 200+ beds......................................... 75 3 2 1.7 0.1 (\1\) (\1\) New England............................................. 213 6 6 4.4 0.1 0.5 0.1 Middle Atlantic......................................... 519 17 20 13.9 0.7 1.4 1.0 South Atlantic.......................................... 719 18 17 12.0 0.5 0.5 0.8 East North Central...................................... 796 18 17 12.2 0.5 0.9 0.5 East South Central...................................... 441 8 7 4.9 0.2 0.1 0.3 West North Central...................................... 704 8 7 4.9 0.2 0.3 0.1 West South Central...................................... 726 11 10 6.8 0.3 0.2 0.6 Mountain................................................ 338 4 4 2.9 0.1 0.1 0.1 Pacific................................................. 619 10 13 8.9 0.3 0.4 0.9 Voluntary............................................... 2,946 74 76 53.7 2.3 3.7 2.9 Proprietary............................................. 692 11 10 7.4 0.3 0.1 0.5 Urban government........................................ 420 9 10 7.2 0.3 0.8 1.0 Rural government........................................ 966 6 4 2.6 0.1 (\1\) 0.1 All hospitals..................................... 5,075 100 100 70.9 3.1 4.6 4.5 -------------------------------------------------------------------------------------------------------------------------------------------------------- \1\ Less than $0.05 billion. Note.--PPS payments are estimated using rules in effect as of October 1, 1996. Excludes hospitals in Maryland. Source: Prospective Payment Assessment Commission PPS payment model, MedPAR data for fiscal year 1995 from the Health Care Financing Administration and Congressional Budget Office March 1997 estimates. TABLE D-11.--ANNUAL CHANGE IN PPS OPERATING COSTS AND PAYMENTS, FIRST 12 YEARS OF PPS [In percent] ---------------------------------------------------------------------------------------------------------------- PPS costs and payments --------------------------------------------------------------------- Year \1\ Operating Operating Market Update Operating Operating costs per payments basket factor \3\ costs payments case per case forecast \2\ ---------------------------------------------------------------------------------------------------------------- 1984...................................... -4.6 11.1 1.8 18.5 4.9 4.7 1985...................................... 4.7 4.2 11.0 10.5 3.9 4.5 1986...................................... 5.6 -0.6 9.6 3.2 3.9 0.5 1987...................................... 7.4 3.8 9.1 5.4 3.5 1.2 1988...................................... 9.8 6.7 9.0 6.0 4.7 1.5 1989...................................... 10.4 7.7 9.2 6.6 5.5 3.3 1990...................................... 10.7 8.2 8.9 6.5 4.6 4.7 1991...................................... 9.1 8.0 7.0 5.9 4.3 3.4 1992...................................... 6.9 7.4 4.7 5.2 3.1 3.0 1993...................................... 3.5 6.1 1.2 3.8 3.0 2.7 1994...................................... 0.4 5.2 -1.1 3.6 2.4 2.0 1995...................................... 0.1 5.2 -1.1 4.0 3.0 2.0 ---------------------------------------------------------------------------------------------------------------- \1\ Data on PPS operating costs and payments are for hospital accounting years beginning during each Federal fiscal year. Data on the market basket and update factor are for the corresponding Federal fiscal year. \2\ As of September 1 of the previous year. \3\ Update factor for 1990 adjusted for 1.22 percent across-the-board reduction in diagnosis-related group weights. Note.--Changes based on cohorts of hospitals with Medicare Cost Reports in two consecutive years. Hospitals in Massachusetts and New York excluded from data in 1984 and 1985; hospitals in New Jersey excluded from data in 1984 through 1988; hospitals in Maryland excluded from data in all years. Source: Prospective Payment Assessment Commission analysis of Medicare Cost Report data from the Health Care Financing Administration. After an increase of 3.2 percent in 1986, payments per case grew at an annual rate of 5.9 percent from 1987 through 1992, as a result of large increases in both the PPS market basket index and the aggregate Medicare case-mix index. From 1993 through 1995, the PPS update was lower, resulting in the smallest 3-year increase in payments per case since the beginning of PPS. Despite this better control over payment rates in recent years, chart D-1 indicates that the increase in operating payments per case during the first 12 years of PPS is almost three times as great as the cumulative value of the annual update factor. Following an increase of only 1.8 percent in the first year of PPS, PPS operating costs per discharge rose by about 11 percent in the second year, and about 9 percent from 1986 through 1990. However, the 7.0-percent growth in operating costs per case in 1991 was the smallest since the first year of PPS, and the rise of 1.2 percent in 1993 was below general inflation. Costs per case actually decreased in 1994 and 1995. Cost growth experience has not been uniform across hospitals, as shown in table D-12. Through 1990, urban and rural hospitals had about the same rate of increase. In the first year, both groups reacted to prospective payment by holding their cost growth far below the rates prevailing before PPS, while annual cost increases in the following 6 years were much higher for both groups. From 1991 through 1995, however, urban hospitals held their cost growth to 1.9 percent annually, while rural hospital costs rose at a 3.4-percent rate. CHART D-1. CUMULATIVE INCREASES IN PPS MARKET BASKET, UPDATE FACTOR, AND PAYMENTS AND COSTS PER CASE, FIRST 12 YEARS OF PPS (IN PERCENT) Source: Prospective Payment Assessment Commission analysis of Medicare Cost Report data from the Health Care Financing Administration. The recent low rate of cost growth among hospitals in large urban areas may reflect the fact that the most rapid changes in the health care system appear to be occurring in the largest cities. From 1991 through 1995, these hospitals' costs per discharge rose at a rate 0.9 percentage points below that for other urban hospitals and 1.9 percentage points below that for rural hospitals. The pattern of cost increases also varies substantially by ownership. In the first year of PPS, when hospitals perceived potential pressure to control costs, proprietary facilities had by far the smallest increase of any group. Once this pressure lessened, costs increased sharply through 1990 for all groups, including the proprietaries. However, from 1991 on, proprietary hospitals reined in their costs to a far greater extent than the other groups. TABLE D-12.--ANNUAL RATE OF CHANGE IN PPS OPERATING COSTS PER CASE BY HOSPITAL GROUP AND PERIOD, 1984-95 [In percent] ------------------------------------------------------------------------ Period Hospital group ----------------------------- 1984 1985-90 1991-95 ------------------------------------------------------------------------ Urban..................................... 1.6 9.4 1.9 Rural..................................... 1.5 9.2 3.4 Large urban............................... 0.6 9.2 1.5 Other urban............................... 3.2 9.8 2.4 Rural referral............................ 1.5 9.7 3.4 Sole community............................ 1.3 8.6 3.6 Other rural............................... 1.4 9.2 3.3 Major teaching............................ 1.3 9.1 1.7 Other teaching............................ 1.3 9.4 2.2 Nonteaching............................... 1.9 9.5 2.0 Disproportionate share large urban........ 0.0 9.0 1.4 Disproportionate share other urban........ 3.2 9.7 2.6 Disproportionate share rural.............. 0.3 9.7 3.4 Nondisproportionate share................. 2.4 9.6 2.2 Teaching and disproportionate share....... 0.7 9.2 2.0 Teaching only............................. 2.6 9.7 2.4 Disproportionate share only............... 1.8 9.5 1.8 Nonteaching nondisproportionate share..... 2.0 9.4 2.1 Voluntary................................. 1.8 9.3 2.2 Proprietary............................... 0.7 10.0 0.3 Urban government.......................... 2.4 9.6 2.1 Rural government.......................... 1.5 9.3 3.9 All hospitals....................... 1.8 9.5 2.1 ------------------------------------------------------------------------ Note.--Data on PPS operating costs and payments are for hospital accounting years beginning during each Federal fiscal year. Changes based on cohorts of hospitals with Medicare Cost Reports in two consecutive years. Hospitals in Massachusetts and New York excluded from data in 1984 and 1985; hospitals in New Jersey excluded from data in 1984 through 1988; hospitals in Maryland excluded from data in all years. Source: Prospective Payment Assessment Commission analysis of Medicare Cost Report data from the Health Care Financing Administration. PPS Inpatient Margins The PPS inpatient margin compares combined Medicare operating and capital payments with the corresponding costs. In 1995, the aggregate PPS margin rose for the fourth consecutive year to 10.0 percent, as shown in table D-13. This contrasts with a declining trend through the first 8 years of prospective payment, during which the margin fell to a low of -2.4 percent. The turnaround is attributable to the sharp slowdown in hospital cost growth. If current trends continue, the aggregate PPS inpatient margin for 1997 would be 14.2 percent. This would be the highest PPS inpatient margin in the 14 years of prospective payment. TABLE D-13.--PPS INPATIENT (OPERATING PLUS CAPITAL) MARGINS, BY HOSPITAL GROUP, FIRST 12 YEARS OF PPS [In percent] -------------------------------------------------------------------------------------------------------------------------------------------------------- Hospital group 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 -------------------------------------------------------------------------------------------------------------------------------------------------------- Urban................................................... 14.5 13.9 9.8 6.8 3.3 0.8 -1.2 -2.2 -0.9 1.3 5.7 10.7 Rural................................................... 7.7 7.4 2.2 0.2 -1.2 -2.9 -3.7 -3.7 -1.4 -0.7 0.2 5.1 Large urban............................................. 15.0 13.9 10.0 6.8 3.1 0.7 -0.7 -1.4 0.4 2.8 7.8 12.7 Other urban............................................. 13.8 14.0 9.4 6.8 3.7 0.9 -1.9 -3.4 -2.9 -1.0 2.5 7.8 Rural referral.......................................... 9.9 12.9 7.9 6.1 3.9 1.2 0.0 -0.6 2.9 2.6 2.8 6.1 Sole community.......................................... 8.0 6.4 2.1 0.3 -1.2 -2.6 -1.2 -0.8 2.5 3.8 4.4 7.3 Other rural............................................. 7.0 6.0 0.3 -1.9 -3.2 -4.5 -6.0 -6.0 -4.8 -3.8 -2.5 3.7 Major teaching.......................................... 18.6 19.9 15.2 12.9 10.0 7.9 7.2 7.5 9.3 10.9 16.4 20.5 Other teaching.......................................... 14.9 14.5 10.5 7.2 3.9 1.4 -1.0 -2.2 -1.2 0.8 4.6 9.3 Nonteaching............................................. 11.2 10.0 5.2 2.5 -0.7 -3.3 -5.2 -6.4 -5.0 -3.0 0.4 6.0 Disproportionate share large urban...................... 15.3 14.2 10.8 8.3 5.5 3.5 3.0 2.8 5.0 7.8 13.1 17.6 Disproportionate share other urban...................... 13.5 14.2 10.0 7.8 5.0 2.4 0.0 -1.3 -1.0 0.9 4.5 10.0 Disproportionate share rural............................ 8.5 8.2 2.8 0.4 -0.5 -2.1 -2.2 -1.8 0.2 0.5 2.2 7.6 Nondisproportionate share............................... 12.6 11.9 7.0 3.6 -0.3 -2.9 -5.5 -6.7 -5.5 -4.0 -0.7 4.4 Teaching and disproportionate share..................... 15.8 15.9 12.4 10.0 7.6 5.3 4.1 3.6 5.0 7.3 11.8 16.2 Teaching only........................................... 16.1 16.3 11.3 7.0 2.2 -0.1 -3.2 -4.0 -2.9 -1.7 2.2 7.0 Disproportionate share only............................. 11.6 10.7 6.1 3.6 0.6 -1.6 -3.0 -3.7 -2.3 -0.1 3.9 10.0 Nonteaching nondisproportionate share................... 10.8 9.5 4.5 1.5 -1.8 -4.6 -6.9 -8.4 -7.2 -5.4 -2.5 2.7 Voluntary............................................... 14.0 13.7 9.6 6.5 3.1 0.7 -1.3 -2.5 -1.1 0.6 4.3 9.0 Proprietary............................................. 12.9 11.0 6.3 3.4 0.0 -3.9 -5.7 -4.4 -2.2 1.8 8.6 15.6 Urban government........................................ 13.5 14.1 9.1 7.6 4.8 3.6 2.7 1.4 2.2 4.9 9.7 14.5 Rural government........................................ 6.6 5.1 -0.6 -2.3 -2.3 -3.7 -4.0 -4.4 -2.6 -2.0 -2.6 2.5 All hospitals..................................... 13.4 13.0 8.7 5.9 2.7 0.3 -1.5 -2.4 -1.0 1.0 5.0 10.0 -------------------------------------------------------------------------------------------------------------------------------------------------------- Note.--Data on PPS operating and capital costs and payments are for hospital accounting years beginning during each Federal fiscal year. Hospitals in Massachusetts and New York excluded from data in 1984 and 1985; hospitals in New Jersey excluded from data in 1984 through 1988; hospitals in Maryland excluded from data in all years. Source: Prospective Payment Assessment Commission analysis of Medicare Cost Report data from the Health Care Financing Administration. Table D-14 shows that, even with the high aggregate PPS inpatient margin in 1995, more than a third of all PPS hospitals have negative PPS inpatient margins. The PPS margin, however, does not represent the bottom line for the hospital industry. The total margin, which includes expenses and revenues related to Medicare and other inpatient and outpatient care as well as other facility activities, increased steadily from the early 1970s to the early 1980s, peaking in 1984. In subsequent years--as Medicare tightened its control over inpatient payment rate increases--the total margin began to fall. In the late 1980s, however, this decline leveled off at 3.3 percent, and by 1991 the total margin had risen to 4.4 percent. It remained steady through 1993, and then increased to 5.0 percent in 1994 and 5.8 percent in 1995, the highest level since 1986 and above levels experienced before PPS began. Margins by Hospital Type PPS inpatient margins vary by hospital group. The margin for urban hospitals was 14.5 percent in the first year-- exceeding that for rural hospitals by 6.8 percentage points. Beginning in fiscal year 1986, the Congress enacted a series of policy changes designed to increase payment for rural hospitals. By 1988, although the difference between the two groups had decreased to 3.7 percentage points, rural hospitals had negative margins while urban ones were still receiving payments that exceeded their costs. The disparity narrowed to 0.5 percentage points by 1992, but has widened as urban hospitals have constrained their costs more than rural hospitals. Major teaching hospitals consistently have had the highest aggregate inpatient margin of any hospital group. Moreover, the difference in the margins for major teaching and nonteaching hospitals has grown. For major teaching hospitals, the inpatient margin fell from 19.9 percent in the second year of PPS to a low of 7.2 percent in 1990, while the drop for other teaching and nonteaching hospitals was much sharper. By 1995, all three groups had higher margins than in the early years of the decade, with the largest increase seen in the major teaching group. Their margin was 20.5 percent--11.2 percentage points higher than for other teaching hospitals and 14.5 percentage points higher than for the nonteaching group. These differences had been 3.7 percentage points and 7.4 percentage points, respectively, in the first PPS year. The trend in inpatient margins by ownership category also reflects changes in payment policy and degree of success in controlling costs. In the first year, voluntary, proprietary, and urban government hospitals all had inpatient margins around 13-14 percent, while rural government hospitals lagged behind. In 1990, the inpatient margin for the proprietary group, which had fallen by more than 18 percentage points since the beginning of PPS to -5.7 percent, was the lowest of the four groups. However, as these hospitals held down their cost growth, their margin increased by more than 20 percentage points, to 15.6 percent in 1995. TABLE D-14.--DISTRIBUTION OF PPS INPATIENT (OPERATING PLUS CAPITAL) MARGINS AND PERCENT OF HOSPITALS WITH NEGATIVE MARGIN, FIRST 12 YEARS OF PPS [In Percent] -------------------------------------------------------------------------------------------------------------------------------------------------------- PPS margin Percentile \1\ --------------------------------------------------------------------------------------------------------- 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 -------------------------------------------------------------------------------------------------------------------------------------------------------- 10th.......................................... -5.8 -8.2 -15.6 -18.5 -22.6 -24.7 -26.1 -27.3 -26.6 -23.6 -22.4 -16.8 25th.......................................... 3.1 1.3 -4.2 -6.8 -9.7 -11.9 -13.6 -15.4 -14.3 -12.1 -9.9 -4.6 Median........................................ 10.3 9.2 4.5 2.6 0.6 -1.7 -3.3 -4.4 -2.7 -0.7 1.6 6.5 75th.......................................... 16.2 16.0 11.8 10.4 9.4 7.9 6.6 5.9 7.7 9.5 12.2 17.1 90th.......................................... 21.5 22.3 18.1 17.4 17.5 16.3 15.8 15.0 16.9 19.3 22.9 27.4 Percent with negative PPS inpatient margin.... 18.2 21.8 35.6 42.2 48.3 54.7 59.0 61.2 57.1 51.8 45.8 34.1 -------------------------------------------------------------------------------------------------------------------------------------------------------- \1\ Table entries are the margins of hospitals at the 10th percentile, 25th percentile, median, 75th percentile, and 90th percentile. Note.--Data on PPS operating and capital costs and payments are for hospital accounting years beginning during each Federal fiscal year. Hospitals in Massachusetts and New York excluded from data in 1984 and 1985; hospitals in New Jersey excluded from data in 1984 through 1988; hospitals in Maryland excluded from data in all years. Source: Prospective Payment Assessment Commission analysis of Medicare Cost Report data from the Health Care Financing Administration. TABLE D-15.--TOTAL MARGINS BY HOSPITAL GROUP, 1984-95 ---------------------------------------------------------------------------------------------------------------- Hospital group 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 ---------------------------------------------------------------------------------------------------------------- Urban....................... 7.7 6.9 4.5 3.7 3.6 3.5 3.5 4.3 4.2 4.4 4.9 5.7 Rural....................... 5.0 4.7 3.0 2.9 3.3 4.2 4.7 5.1 5.3 5.1 5.5 6.6 Large urban................. 7.5 6.6 4.0 3.2 3.0 2.9 2.4 3.6 3.5 3.8 4.2 4.9 Other urban................. 8.1 7.2 5.4 4.6 4.5 4.7 5.2 5.6 5.3 5.2 6.1 6.9 Rural referral.............. 7.4 8.4 5.7 5.7 5.1 6.5 6.5 6.5 6.7 6.8 7.1 8.6 Sole community.............. 4.8 4.1 2.7 2.3 2.7 3.3 4.3 5.4 5.6 5.6 5.9 6.3 Other rural................. 4.4 3.7 2.2 2.1 3.0 3.7 4.2 4.5 4.6 4.3 4.7 5.9 Major teaching.............. 5.2 5.7 2.2 2.1 2.4 1.8 0.9 3.5 3.2 3.3 3.1 4.2 Other teaching.............. 8.4 7.3 5.6 4.4 4.3 4.5 4.4 4.7 4.4 4.7 5.3 6.2 Nonteaching................. 7.3 6.4 4.5 3.8 3.6 3.9 4.4 4.8 4.9 4.9 5.9 6.4 Disproportionate share: Large urban............. 6.6 5.7 3.2 2.4 2.2 2.0 1.3 3.1 3.0 3.5 3.7 4.3 Other urban............. 7.9 7.1 5.4 4.7 4.6 4.7 5.3 5.9 5.8 5.4 6.2 7.0 Rural................... 5.8 5.7 2.5 2.8 3.5 4.4 5.7 7.4 7.7 6.0 6.0 7.8 Nondisproportionate share... 7.7 7.0 4.9 4.2 4.2 4.4 4.5 4.6 4.4 4.6 5.4 8.2 Teaching and DSH............ 6.7 6.1 3.6 3.0 2.9 3.0 2.4 4.0 3.9 4.0 4.1 4.9 Teaching only............... 9.0 8.5 5.9 4.7 5.0 4.6 4.5 4.7 3.9 4.4 5.1 6.5 DSH only.................... 7.7 6.5 4.6 3.7 3.5 3.4 4.2 5.1 5.2 5.1 6.3 6.8 No teaching or DSH.......... 7.0 6.2 4.4 4.0 3.7 4.3 4.5 4.5 4.7 4.7 5.5 6.1 Voluntary................... 7.7 7.0 4.9 3.8 3.8 3.9 3.9 4.3 4.0 4.1 4.8 5.7 Proprietary................. 8.8 7.5 5.6 4.6 3.6 2.9 3.9 5.2 6.6 7.2 9.6 9.3 Urban government............ 4.4 4.4 0.9 2.3 2.2 2.5 1.7 4.4 4.2 4.4 3.4 4.4 Rural government............ 4.6 2.9 2.0 1.5 2.4 3.3 4.0 4.8 5.2 4.5 4.7 5.7 All hospitals......... 7.3 6.6 4.3 3.6 3.5 3.6 3.6 4.4 4.3 4.5 5.0 5.8 ---------------------------------------------------------------------------------------------------------------- Note.--Data are percentages. Data on total revenues and expenses are for hospital accounting years beginning during each Federal fiscal year. Hospitals in Massachusetts and New York excluded from data in 1984 and 1985; hospitals in New Jersey excluded from data in 1984-88; hospitals in Maryland excluded from data in all years. Source: ProPAC analysis of Medicare Cost Report data from the Health Care Financing Administration. Additional Hospital Data Table D-16 displays summary characteristics of hospitals participating in the Medicare prospective payment system. These data are derived from PPS payment simulations by CBO. Table D- 17 provides historical trends in factors affecting PPS rates and average payments per case, based on data and estimates provided by HCFA's Office of the Actuary. TABLE D-16.--FACTORS AFFECTING FISCAL YEAR 1997 PPS OPERATING PAYMENTS PER CASE, BY HOSPITAL GROUP -------------------------------------------------------------------------------------------------------------------------------------------------------- Other Average Number of Number of Average Average payment Base case- Outlier IME/ PPS Hospital group PPS PPS standardized wage rate payment mix factor DSH payments hospitals discharges amount index factors rate index factor per case -------------------------------------------------------------------------------------------------------------------------------------------------------- Urban............................................. 2,832 8,662,319 $3,882 1.02 1.00 $3,935 1.50 1.06 1.17 $7,281 Rural............................................. 2,243 2,139,471 3,847 0.79 1.04 3,416 1.21 1.03 1.02 4,392 Large urban....................................... 1,567 4,923,543 3,908 1.09 1.00 4,137 1.50 1.06 1.19 7,836 Other urban....................................... 1,265 3,738,776 3,847 0.93 1.00 3,671 1.50 1.06 1.13 6,550 Rural referral.................................... 130 407,577 3,847 0.79 1.07 3,510 1.37 1.03 1.04 5,261 Sole community.................................... 648 465,468 3,847 0.80 1.09 3,631 1.16 1.01 1.02 4,476 Other rural....................................... 1,465 1,266,426 3,847 0.78 1.01 3,294 1.18 1.03 1.02 4,081 Major teaching.................................... 263 1,304,199 3,895 1.12 1.00 4,208 1.66 1.07 1.49 11,083 Other teaching.................................... 811 3,437,521 3,879 1.00 1.00 3,880 1.55 1.06 1.14 7,225 Nonteaching....................................... 4,001 6,060,070 3,868 0.93 1.01 3,746 1.33 1.04 1.05 5,474 Disproportionate share: Large urban................................... 786 2,659,569 3,908 1.10 1.00 4,168 1.52 1.06 1.31 8,747 Other urban................................... 679 2,396,608 3,847 0.92 1.00 3,645 1.52 1.06 1.18 6,919 Rural......................................... 448 582,226 3,847 0.76 1.03 3,324 1.21 1.03 1.07 4,504 Nondisproportionate share......................... 3,162 5,163,387 3,874 0.96 1.01 3,833 1.39 1.05 1.04 5,810 Teaching and DSH.................................. 701 3,102,055 3,883 1.03 1.00 3,963 1.59 1.06 1.32 8,817 Teaching only..................................... 373 1,639,665 3,885 1.04 1.01 4,004 1.56 1.06 1.10 7,283 DSH only.......................................... 1,212 2,536,348 3,867 0.94 1.00 3,719 1.37 1.05 1.11 5,960 No teaching or DSH................................ 2,789 3,523,722 3,869 0.93 1.01 3,741 1.31 1.04 1.00 5,125 Urban, less than 100 beds......................... 700 481,873 3,877 1.00 0.99 3,861 1.21 1.04 1.01 4,915 Urban, 100-199.................................... 925 1,898,324 3,881 1.03 1.00 3,938 1.36 1.04 1.11 6,198 Urban, 200-299.................................... 567 2,195,938 3,880 1.02 1.00 3,931 1.47 1.05 1.11 6,752 Urban, 300-399.................................... 316 1,645,493 3,880 1.01 1.00 3,902 1.55 1.06 1.16 7,451 Urban, 400-499.................................... 157 964,132 3,884 1.02 1.00 3,945 1.59 1.06 1.23 8,210 Urban, 500+ beds.................................. 167 1,476,559 3,887 1.04 1.00 3,994 1.70 1.07 1.30 9,438 Rural, less than 50 beds.......................... 1,175 422,328 3,847 0.79 1.01 3,304 1.06 1.01 1.01 3,605 Rural, 50-99...................................... 656 653,095 3,847 0.79 1.03 3,383 1.16 1.02 1.01 4,079 Rural, 100-149.................................... 240 466,878 3,847 0.79 1.05 3,437 1.26 1.03 1.02 4,581 Rural, 150-199.................................... 97 274,834 3,847 0.79 1.05 3,433 1.27 1.04 1.03 4,712 Rural, 200+ beds.................................. 75 322,336 3,847 0.78 1.08 3,528 1.39 1.04 1.06 5,511 New England....................................... 213 600,267 3,887 1.14 1.00 4,299 1.42 1.04 1.17 7,439 Middle Atlantic................................... 519 1,849,999 3,888 1.10 1.00 4,197 1.42 1.07 1.21 7,704 South Atlantic.................................... 719 1,936,834 3,868 0.91 1.01 3,654 1.46 1.05 1.13 6,342 East North Central................................ 796 1,919,107 3,876 0.96 1.01 3,813 1.43 1.05 1.13 6,479 East South Central................................ 441 914,371 3,855 0.81 1.01 3,377 1.38 1.06 1.11 5,490 West North Central................................ 704 844,212 3,865 0.86 1.02 3,568 1.44 1.04 1.10 5,901 West South Central................................ 726 1,147,927 3,867 0.85 1.01 3,494 1.45 1.06 1.13 6,080 Mountain.......................................... 338 458,342 3,873 0.94 1.02 3,795 1.48 1.04 1.09 6,400 Pacific........................................... 619 1,130,731 3,887 1.20 1.00 4,453 1.49 1.04 1.16 8,063 Voluntary......................................... 2,946 8,004,924 3,877 1.00 1.01 3,905 1.46 1.05 1.14 6,852 Proprietary....................................... 692 1,206,343 3,875 0.95 1.01 3,770 1.44 1.05 1.09 6,254 Urban government.................................. 420 920,619 3,874 0.99 1.00 3,837 1.48 1.06 1.32 7,995 Rural government.................................. 966 657,913 3,847 0.77 1.02 3,306 1.15 1.03 1.02 4,030 All hospitals............................... 5,075 10,801,790 3,875 0.98 1.01 3,856 1.44 1.05 1.15 6,709 -------------------------------------------------------------------------------------------------------------------------------------------------------- Source: Congressional Budget Office estimates based on data from the Health Care Financing Administration. TABLE D-17.--TRENDS IN FACTORS AFFECTING PPS RATES AND AVERAGE PAYMENTS PER CASE, FISCAL YEARS 1983-98 [Percentage change from previous year] ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Fiscal year Rate impact factor ------------------------------------------------------------------------------------------------------------------------------- 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Market basket index \1\......................................... 5.5 4.9 4.1 2.9 3.2 4.7 5.4 5.5 5.2 \2\ 4. 4 \3\ 4. 1 4.3 \4\ 3. 6 \5\ 3. 5 2.5 2.8 Annual update factor \6\........................................ ...... ...... ...... ...... ...... 1.7 3.33 5.71 2.83 2.90 2.75 2.11 1.89 1.64 2.0 3.1 Case-mix index \7\.............................................. ...... ...... 3.1 2.5 2.1 3.2 2.5 0.85 2.5 1.5 0.85 0.85 1.00 1.50 1.50 1.0 Average payments per discharge \8\.............................. 10.2 10.8 15.0 8.0 3.6 5.0 10.1 8.4 7.2 8.9 4.6 2.5 6.1 6.7 2.9 4.8 Average payments per beneficiary \8\............................ 11.4 7.8 6.6 1.5 -0.3 3.9 6.5 8.0 5.9 11.5 4.0 5.9 4.3 7.4 3.9 5.9 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ \1\ Estimates as published in the Federal Register for fiscal years 1983-97; fiscal year 1998 President's Budget assumptions shown for fiscal year 1998. \2\ 4.7 for hospitals excluded from the prospective payment system. \3\ 4.2 for hospitals excluded from the prospective payment system. \4\ 3.7 for hospitals excluded from the prospective payment system. \5\ 3.4 for hospitals excluded from the prospective payment system. \6\ Estimates as published in the Federal Register for fiscal years 1989-97; fiscal year 1997 President's Budget assumptions used for fiscal year 1998. \7\ Estimates based on historical data for fiscal years 1985-97; fiscal year 1998 President's Budget assumptions shown for fiscal years 1996-98. \8\ Estimates based on historical data and fiscal year 1997 President's Budget assumptions; estimates for fiscal years 1989 and 1990 include the effect of provisions of the Medicare Catastrophic Coverage Act of 1988. Source: Health Care Financing Administration, Office of the Actuary. TABLE D-18.--WAGE INDEX FOR URBAN AREAS, FISCAL YEAR 1996 ------------------------------------------------------------------------ Urban area (constituent counties or county equivalents) Wage index ------------------------------------------------------------------------ Abilene, TX (Taylor, TX)................................... 0.8287 Aguadilla, PR (Aquada, PR, Aguadilla, PR, Moca, PR)........ 0.4224 Akron, OH (Portage, OH, Summit, OH)........................ 0.9728 Albany, GA (Dougherty, GA, Lee, GA)........................ 0.7914 Albany-Schenectady-Troy, NY (Albany, NY, Montgomery, NY, Rensselaer, NY, Saratoga, NY, Schenectady, NY, Schoharie, NY)....................................................... 0.8480 Albuquerque, NM (Bernalillo, NM, Sandoval, NM, Valencia, NM)....................................................... 0.9329 Alexandria, LA (Rapides, LA)............................... 0.8269 Allentown-Bethlehem-Easton, PA (Carbon, PA, Lehigh, PA, Northampton, PA).......................................... 1.0086 Altoona, PA (Blair, PA).................................... 0.9137 Amarillo, TX (Potter, TX, Randall, TX)..................... 0.9425 Anchorage, AK (Anchorage, AK).............................. 1.2998 Ann Arbor, MI (Lenawee, MI, Livingston, MI, Washtenaw, MI). 1.1785 Anniston, AL (Calhourn, AL)................................ 0.8266 Appleton-Oshkosh-Neenah, WI (Calumet, WI, Outagami, WI, Winnebago, WI)............................................ 0.8996 Arecibo, PR (Arecibo, PR, Camuy, PR, Hatillo, PR).......... 0.4224 Asheville, NC (Buncombie, NC, Madison, NC)................. 0.9072 Athens, GA (Clarke, GA, Madison, GA, Oconee, GA)........... 0.9087 Atlanta, GA (Barrow, GA, Bartow, GA, Carroll, GA, Cherokee, GA, Clayton, GA, Cobb, GA, Coweta, GA, DeKalb, GA, Douglas, GA, Fayette, GA, Forsyth, GA, Fulton, GA, Gwinnett, GA, Henry, GA, Newton, GA, Paulding, GA, Pickens, GA, Rockdale, GA, Spalding, GA, Walton, GA)...... 0.9823 Atlantic City-Cape May, NJ (Atlantic City, NJ, Cape May, NJ)....................................................... 1.0724 Augusta-Aiken, GA-SC (Columbia, GA, McDuffie, GA, Richmond, GA, Aiken, SC, Edgefield, SC)............................. 0.9333 Austin-San Marcos, TX (Bastrop, TX, Caldwell, TX, Hays, TX, Travis, TX, Williamson, TX)............................... 0.9133 Bakersfield, CA (Kern, CA)................................. 1.0014 Baltimore, MD (Anne Arundel, MD, Baltimore, MD, Baltimore City, MD, Carroll, MD, Harford, MD, Howard, MD, Queen Annes, MD)................................................ 0.9689 Bangor, ME (Penobscot, ME)................................. 0.9478 Barnstable-Yarmouth, MA (Barnstable, MA)................... 1.4291 Baton Rouge, LA (Ascension, LA, East Baton Rouge, LA, Livingston, LA, West Baton Rouge, LA)..................... 0.8382 Beaumont-Port Arthur, TX (Hardin, TX, Jefferson, TX, Orange, TX)............................................... 0.8593 Bellingham, WA (Whatcom, WA)............................... 1.1221 Benton Harbor, MI (Berrien, MI)............................ 0.8923 Bergen-Passaic, NJ (Bergen, NJ, Passaic, NJ)............... 1.1570 Billings, MT (Yellowstone, MT)............................. 0.9783 Biloxi-Gulfport-Pascagoula, MS (Hancock, MS, Harrison, MS, Jackson, MS).............................................. 0.8415 Binghamton, NY (Broome, NY, Tioga, NY)..................... 0.8914 Birmingham, AL (Blount, AL, Jefferson, AL, St. Clair, AL, Shelby, AL)............................................... 0.9005 Bismark, ND (Burleigh, ND, Morton, ND)..................... 0.7859 Bloomington, IN (Monroe, IN)............................... 0.9128 Bloomington-Normal, IL (McLean, IL)........................ 0.8733 Boise City, ID (Ada, ID, Canyon, ID)....................... 0.8887 Boston-Brockton-Nashua, MA-NH (Bristol, MA, Essex, MA, Middlesex, MA, Norfolk, MA, Plymouth, MA, Suffolk, MA, Worcester, MA, Hillsborough, NH, Merrimack, NH, Rockingham, NH, Strafford, NH)............................ 1.1436 Boulder-Longmont, CO (Boulder, CO)......................... 1.0015 Brazoria, TX (Brazoria, TX)................................ 0.9129 Bremerton, WA (Kitsap, WA)................................. 1.0999 Brownsville-Harlingen-San Benito, TX (Cameron, TX)......... 0.8740 Bryan-College Station, TX (Brazos, TX)..................... 0.8571 Buffalo-Niagara Falls, NY (Erie, NY, Niagara, NY).......... 0.9272 Burlington, VT (Chittenden, VT, Franklin, VT, Grand Isle, VT)....................................................... 1.0142 Caguas, PR (Caguas, PR, Cayey, PR, Cidra, PR, Gurabo, PR, San Lorenzo, PR).......................................... 0.4508 Canton-Massilon, OH (Carroll, OH, Stark, OH)............... 0.8961 Casper, WY (Natrona, WY)................................... 0.9013 Cedar Rapids, IA (Linn, IA)................................ 0.8529 Champaign-Urbana, IL (Champaign, IL)....................... 0.8824 Charleston-North Charleston, SC (Berkeley, SC, Charleston, SC, Dorchester, SC)....................................... 0.8807 Charleston, WV (Kanawha, WV, Putnam, WV)................... 0.9142 Charlotte-Gastonia-Rock Hill, NC-SC (Cabarrus, NC, Gaston, NC, Lincoln, NC, Mecklenburg, NC, Rowan, NC, Stanly, NC, Union, NC, York, SC)...................................... 0.9710 Charlottesville, VA (Albemarle, VA, Charlottesville City, VA, Fluvanna, VA, Greene, VA)............................. 0.9051 Chattanooga, TN-GA (Catoosa, GA, Dade, GA, Walker, GA, Hamilton, TN, Marion, TN)................................. 0.8658 Cheyenne, WY (Laramie, WY)................................. 0.8247 Chicago, IL (Cook, IL, DeKalb, IL, Du Page, IL, Grundy, IL, Kane, IL, Kendall, IL, Lake, IL, McHenry, IL, Will, IL)... 1.0860 Chico-Paradise, CA (Butte, CA)............................. 1.0429 Cincinnati, OH-KY-IN (Dearborn, IN, Ohio, IN, Boone, KY, Campbell, KY, Gallatin, KY, Grant, KY, Kenton, KY, Pendleton, KY, Brown, OH, Clermont, OH, Hamilton, OH, Warren, OH)............................................... 0.9521 Clarksville-Hopkinsville, TN-KY (Christian, KY, Montgomery, TN)....................................................... 0.7852 Cleveland-Lorain-Elyria, OH (Ashtabula, OH, Cuyahoga, OH, Geauga, OH, Lake, OH, Lorain, OH, Medina, OH)............. 0.9804 Colorado Springs, CO (El Paso, CO)......................... 0.9316 Columbia, MO (Boone, MO)................................... 0.9001 Columbia, SC (Lexington, SC, Richland, SC)................. 0.9192 Columbus, GA-AL (Russell, AL, Chattahoochee, GA, Harris, GA, Muscogee GA).......................................... 0.8288 Columbus, OH (Delaware, OH, Fairfield, OH, Franklin, OH, Licking, OH, Madison, OH, Pickaway, OH)................... 0.9793 Corpus Christi, TX (Nueces, TX, San Patricio, TX).......... 0.8945 Cumberland, MD-WV (Allegany, MD, Mineral, WV).............. 0.8822 Dallas, TX (Collin, TX, Dallas, TX, Denton, TX, Ellis, TX, Henderson, TX, Hunt, TX, Kaufman, TX, Rockwall, TX)....... 0.9674 Danville, VA (Danville City, VA, Pittsylvania, VA)......... 0.8146 Davenport-Rock Island-Moline, IA-IL (Scott, IA, Henry, IL, Rock Island, IL).......................................... 0.8405 Dayton-Springfield, OH (Clark, OH, Greene, OH, Miami, OH, Montgomery, OH)........................................... 0.9279 Daytona Beach, FL (Flagler, FL, Volusia, FL)............... 0.8838 Decatur, AL (Lawrence, AL, Morgan, AL)..................... 0.8286 Decatur, IL (Macon, IL).................................... 0.7915 Denver, CO (Adams, CO, Arapahoe, CO, Denver, CO, Douglas, CO, Jefferson, CO)........................................ 1.0386 Des Moines, IA (Dallas, IA, Polk, IA, Warren, IA).......... 0.8837 Detroit, MI (Lapeer, MI, Macomb, MI, Monroe, MI, Oakland, MI, St. Clair, MI, Wayne, MI)............................. 1.0840 Dothan, AL (Dale, AL, Houston, AL)......................... 0.8070 Dover, DE (Kent, DE)....................................... 0.9303 Dubuque, IA (Dubuque, IA).................................. 0.8088 Duluth-Superior, MN-WI (St. Louis, MN, Douglas, WI)........ 0.9779 Dutchess County, NY (Dutchess, NY)......................... 1.0632 Eau Claire, WI (Chippewa, WI, Eau Claire, WI).............. 0.8764 El Paso, TX (El Paso, TX).................................. 1.0123 Elkhart-Goshen, IN (Elkhart, IN)........................... 0.9081 Elmira, NY (Chemung, NY)................................... 0.8401 Enid, OK (Garfield, OK).................................... 0.7962 Erie, PA (Erie, PA)........................................ 0.8862 Eugene-Springfield, OR (Lane, OR).......................... 1.1659 Evansville, IN-KY (Posey, IN, Vanderburgh, IN, Warrick, IN, Henderson, KY)............................................ 0.8641 Fargo-Moorhead, ND-MN (Clay, MN, Cass, ND)................. 0.8837 Fayetteville, NC (Cumberland, NC).......................... 0.8734 Fayetteville-Springdale-Rogers, AR (Benton, AR, Washington, AR)....................................................... 0.7461 Flagstaff, AZ-UT (Coconino, AZ, Kane, UT).................. 0.9115 Flint, MI (Genesee, MI).................................... 1.1171 Florence, AL (Colbert, AL, Lauderdale, AL)................. 0.7716 Florence, SC (Florence, SC)................................ 0.8711 Fort Collins-Loveland, CO (Larimer, CO).................... 1.0248 Fort Lauderdale, FL (Broward, FL).......................... 1.0487 Fort Myers-Cape Coral, FL (Lee, FL)........................ 0.8838 Fort Pierce-Port St. Lucie, FL (Martin, FL, St. Lucie, FL). 1.0257 Fort Smith, AR-OK (Crawford, AR, Sebastian, AR, Sequoyah, OK)....................................................... 0.7769 Fort Walton Beach, FL (Okaloosa, FL)....................... 0.8838 Fort Wayne, IN (Adams, IN, Allen, IN, De Kalb, IN, Huntington, IN, Wells, IN, Whitley, IN)................... 0.8901 Fort Worth-Arlington, TX (Hood, TX, Johnson, TX, Parker, TX, Tarrant, TX).......................................... 0.9997 Fresno, CA (Fresno, CA, Madera, CA)........................ 1.0607 Gadsden, AL (Etowah, AL)................................... 0.8815 Gainesville, FL (Alachua, FL).............................. 0.9616 Galveston-Texas City, TX (Galveston, TX)................... 1.0564 Gary, IN (Lake, IN, Porter, IN)............................ 0.9270 Glens Falls, NY (Warren, NY, Washington, NY)............... 0.8401 Goldsboro, NC (Wayne, NC).................................. 0.8443 Grand Forks, ND-MN (Polk, MN, Grand Forks, ND)............. 0.8815 Grand Junction, CO (Mesa, CO).............................. 0.9491 Grand Rapids-Muskegon-Holland, MI (Allegan, MI, Kent, MI, Muskegon, MI, Ottawa, MI)................................. 1.0147 Great Falls, MT (Cascade, MT).............................. 0.9306 Greeley, CO (Weld, CO)..................................... 1.0097 Green Bay, WI (Brown, WI).................................. 0.9585 Greensboro-Winston-Salem-High Point, NC (Alamance, NC, Davidson, NC, Davie, NC, Forsyth, NC, Guilford, NC, Randolph, NC Stokes, NC, Yadkin, NC)...................... 0.9351 Greenville, NC (Pitt, NC).................................. 0.9064 Greenville-Spartanburg-Andersen, SC (Anderson, SC, Cherokee, SC, Greenville, SC, Pickens, SC, Spartanburg, SC)....................................................... 0.9059 Hagerstown, MD (Washington, MD)............................ 0.9681 Hamilton-Middletown, OH (Butler, OH)....................... 0.8767 Harrisburg-Lebanon-Carlisle, PA (Cumberland, PA, Dauphin, PA, Lebanon, PA, Perry, PA)............................... 1.0187 Hartford, CT (Hartford, CT, Litchfield, CT, Middlesex, CT, Tolland, CT).............................................. 1.2617 Hattiesburg, MS (Forrest, MS, Lamar, MS)................... 0.7192 Hickory-Morganton-Lenoir, NC (Alexander, NC, Burke, NC, Caldwell, NC, Catawba, NC)................................ 0.8285 Honolulu, HI (Honolulu, HI)................................ 1.1817 Houma, LA (Lafourche, LA, Terrebonne, LA).................. 0.7854 Houston, TX (Chambers, TX, Fort Bend, TX, Harris, TX, Liberty, TX, Montgomery, TX, Waller, TX).................. 0.9855 Huntington-Ashland, WV-KY-OH (Boyd, KY, Carter, KY, Greenup, KY, Lawrence, OH, Cabell, WV, Wayne, WV)......... 0.9160 Huntsville, AL (Limestone, AL, Madison, AL)................ 0.8485 Indianapolis, IN (Boone, IN, Hamilton, IN, Hancock, IN, Hendricks, IN, Johnson, IN, Madison, IN, Marion, IN, Morgan, IN, Shelby, IN)................................... 0.9848 Iowa City, IA (Johnson, IA)................................ 0.9401 Jackson, MI (Jackson, MI).................................. 0.9052 Jackson, MS (Hinds, MS, Madison, MS, Rankin, MS)........... 0.7790 Jackson, TN (Madison, TN).................................. 0.8522 Jacksonville, FL (Clay, FL, Duval, FL, Nassau, FL, St. Johns, FL)................................................ 0.8969 Jacksonville, NC (Onslow, NC).............................. 0.7939 Jamestown, NY (Chautauqua, NY)............................. 0.8401 Janesville-Beloit, WI (Rock, WI)........................... 0.8824 Jersey City, NJ (Hudson, NJ)............................... 1.1412 Johnson City-Kingsport-Bristol, TN-VA (Carter, TN, Hawkins, TN, Sullivan, TN, Unicoi, TN, Washington, TN, Bristol City, VA, Scott, VA, Washington, VA)...................... 0.9114 Johnstown, PA (Cambria, PA, Somerset, PA).................. 0.8421 Jonesboro, AR (Craighead, AR).............................. 0.7443 Joplin, MO (Jasper, MO, Newton, MO)........................ 0.7541 Kalamazoo-Battlecreek, MI (Calhoun, MI, Kalamazoo, MI, Van Buren, MI)................................................ 1.0668 Kankakee, IL (Kankakee, IL)................................ 0.8653 Kansas City, KS-MO (Johnson, KS, Leavenworth, KS, Miami, KS, Wyandotte, KS, Cass, MO, Clay, MO, Clinton, MO, Jackson, MO, Lafayette, MO, Platte, MO, Ray, MO).......... 0.9564 Kenosha, WI (Kenosha, WI).................................. 0.9196 Killeen-Temple, TX (Bell, TX, Coryell, TX)................. 1.0252 Knoxville, TN (Anderson, TN, Blount, TN, Knox, TN, Loudon, TN, Sevier, TN, Union, TN)................................ 0.8831 Kokomo, IN (Howard, IN, Tipton, IN)........................ 0.8416 La Crosse, WI-MN (Houston, MN, La Crosse, WI).............. 0.8749 LaFayette, LA (Acadia, LA, Lafayette, LA, St. Landry, LA, St. Martin, LA)........................................... 0.8227 LaFayette, IN (Clinton, IN, Tippecanoe, IN)................ 0.9174 Lake Charles, LA (Calcasieu, LA)........................... 0.7776 Lakeland-Winter Haven, FL (Polk, FL)....................... 0.8838 Lancaster, PA (Lancaster, PA).............................. 0.9481 Lansing-East Lansing, MI (Clinton, MI, Eaton, MI, Ingham, MI)....................................................... 1.0088 Laredo, TX (Webb, TX)...................................... 0.7404 Las Cruces, NM (Dona Ana, NM).............................. 0.8658 Las Vegas, NV-AZ (Mohave, AZ, Clark, NV, Nye, NV).......... 1.0592 Lawrence, KS (Douglas, KS)................................. 0.8608 Lawton, OK (Comanche, OK).................................. 0.9045 Lewiston-Auburn, ME (Androscoggin, ME)..................... 0.9536 Lexington, KY (Bourbon, KY, Clark, KY, Fayett, KY, Jessamine, KY, Madison, KY, Scott, KY, Woodford, KY)...... 0.8416 Lima, OH (Allen, OH, Auglaize, OH)......................... 0.9185 Lincoln, NE (Lancaster, NE)................................ 0.9231 Little Rock-North Little Rock, AR (Faulkner, AR, Lonoke, AR, Pulaski, AR, Saline, AR).............................. 0.8490 Longview-Marshall, TX (Gregg, TX, Harrison, TX, Upshur, TX) 0.8613 Los Angeles-Long Beach, CA (Los Angeles, CA)............... 1.2268 Louisville, KY-IN (Clark, IN, Floyd, IN, Harrison, IN, Scott, IN, Bullitt, KY, Jefferson, KY, Oldham, KY)........ 0.9507 Lubbock, TX (Lubbock, TX).................................. 0.8400 Lynchburg, VA (Amherst, VA, Bedford City, VA, Bedford, VA, Campbell, VA, Lynchburg City, VA)......................... 0.8228 Macon, GA (Bibb, GA, Houston, GA, Jones, GA, Peach, GA, Twiggs, GA)............................................... 0.9227 Madison, WI (Dane, WI)..................................... 1.0055 Mansfield, OH (Crawford, OH, Richfield, OH)................ 0.8639 Mayaguez, PR (Anasco, PR, Cabo Rojo, PR, Hormigueros, PR, Mayaguez, PR, Sabana Grande, PR, San German, PR).......... 0.4475 McAllen-Edinburg-Mission, TX (Hidalgo, TX)................. 0.8371 Medford-Ashland, OR (Jackson, OR).......................... 1.0354 Melbourne-Titusville-Palm Bay, FL (Brevard, FL)............ 0.8838 Memphis, TN-AR-MS (Crittenden, AR, De Soto, MS, Fayette, TN, Shelby, TN, Tipton, TN)............................... 0.8589 Merced, CA (Merced, CA).................................... 1.0947 Miami, FL (Dade, FL)....................................... 0.9859 Middlesex-Somerset-Hunterdon, NJ (Hunterdon, NJ, Middlesex, NJ, Somerset, NJ)......................................... 1.0875 Milwaukee, WI (Milwaukee, WI, Ozaukee, WI, Washington, WI, Waukesha, WI)............................................. 0.9819 Minneapolis-St. Paul, MN-WI (Anoka, MN, Carver, MN, Chisago, MN, Dakota, MN, Hennepin, MN, Isanti, MN, Ramsey, MN, Scott, MN, Sherburne, MN, Washington, MN, Wright, MN, Pierce, WI, St. Croix, WI)................................ 1.0733 Mobile, AL (Baldwin, AL, Mobile, AL)....................... 0.8455 Modesto, CA (Stanislaus, CA)............................... 1.0377 Monmouth-Ocean, NJ (Monmouth, NJ, Ocean, NJ)............... 1.0934 Monroe, LA (Ouachita, LA).................................. 0.8414 Montgomery, AL (Autauga, AL, Elmore, AL, Montgomery, AL)... 0.7813 Muncie, IN (Delaware, IN).................................. 0.9173 Myrtle Beach, SC (Horry, SC)............................... 0.8072 Naples, FL (Collier, FL)................................... 1.0109 Nashville, TN (Cheatham, TN, Davidson, TN, Dickson, TN, Robertson, TN, Rutherford, TN, Sumner, TN, Williamson, TN, Wilson, TN)............................................... 0.9182 Nassau-Suffolk, NY (Nassau, NY, Suffolk, NY)............... 1.3807 New Haven-Bridgeport-Stamford-Danbury-Waterbury, CT (Fairfield, CT, New Haven, CT)............................ 1.2619 New London-Norwich, CT (New London, CT).................... 1.2617 New Orleans, LA (Jefferson, LA, Orleans, LA, Plaquemines, LA, St. Bernard, LA, St. Charles, LA, St. James, LA, St. John the Baptist, LA, St. Tammany, LA).................... 0.9566 New York, NY (Bronx, NY, Kings, NY, New York, NY, Putnam, NY, Queens, NY, Richmond, NY, Rockland, NY, Westchester, NY)....................................................... 1.3982 Newark, NJ (Essex, NJ, Morris, NJ, Sussex, NJ, Union, NJ, Warren, NJ)............................................... 1.1111 Newburgh, NY-PA (Orange, NY, Pike, PA)..................... 1.1283 Norfolk-Virginia Beach-Newport News, VA-NC (Currituck, NC, Chesapeake City, VA, Gloucester, VA, Hampton City, VA, Isle of Wight, VA, James City, VA, Mathews, VA, Newport News City, VA, Norfolk City, VA, Poquoson City, VA, Portsmouth City, VA, Suffolk City, VA, Virginia Beach City, VA, Williamsburg City, VA, York, VA)................ 0.8316 Oakland, CA (Alameda, CA, Contra Costa, CA)................ 1.5158 Ocala, FL (Marion, FL)..................................... 0.9032 Odessa-Midland, TX (Ector, TX, Midland, TX)................ 0.8660 Oklahoma City, OK (Canadian, OK, Cleveland, OK, Logan, OK, McClain, OK, Oklahoma, OK, Pottawatomie, OK).............. 0.8481 Olympia, WA (Thurston, WA)................................. 1.0901 Omaha, NE-IA (Pottawattamie, IA, Cass, NE, Douglas, NE, Sarpy, NE, Washington, NE)................................ 0.9421 Orange County, CA (Orange, CA)............................. 1.1532 Orlando, FL, (Lake, FL, Orange, FL, Osceola, FL, Seminole, FL)....................................................... 0.9397 Owensboro, KY (Daviess, KY)................................ 0.7772 Panama City, FL (Bay, FL).................................. 0.8838 Parkersburg-Marietta, WV-OH (Washington, OH, Wood, WV)..... 0.8046 Pensacola, FL (Escambia, FL, Santa Rosa, FL)............... 0.8838 Peoria-Pekin, IL (Peoria, IL, Tazewell, IL, Woodford, IL).. 0.8586 Philadelphia, PA-NJ (Burlington, NJ, Camden, NJ, Gloucester, NJ, Salem, NJ, Bucks, PA, Chester, PA, Delaware, PA, Montgomery, PA, Philadelphia, PA)........... 1.1379 Phoenix-Mesa, AZ (Maricopa, AZ, Pinal, AZ)................. 0.9606 Pine Bluff, AR (Jefferson, AR)............................. 0.7826 Pittsburgh, PA (Allegheny, PA, Beaver, PA, Butler, PA, Fayette, PA, Washington, PA, Westmoreland, PA)............ 0.9725 Pittsfield, MA (Berkshire, MA)............................ 1.0960 Pocatello, ID (Bannock, ID)................................ 0.9586 Ponce, PR (Guayanilla, PR, Juana Diaz, PR, Penuelas, PR, Ponce, PR, Villalba, PR, Yauco, PR)....................... 0.4589 Portland, ME (Cumberland, ME, Sagadahoc, ME, York, ME).... 0.9627 Portland-Vancouver, OR-WA (Clackamas, OR, Columbia, OR, Multnomah, OR, Washington, OR, Yamhill, OR, Clark, WA).... 1.1344 Providence-Warwick, RI (Bristol, RI, Kent, RI, Newport, RI, Providence, RI, Washington, RI)....................... 1.1049 Provo-Orem, UT (Utah, UT)................................. 1.0073 Pueblo, CO (Pueblo, CO).................................... 0.8450 Punta Gorda, FL (Charlotte, FL)............................ 0.8838 Racine, WI (Racine, WI).................................... 0.8934 Raleigh-Durham-Chapel Hill, NC (Chatham, NC, Durham, NC, Franklin, NC, Johnston, NC, Orange, NC, Wake, NC)......... 0.9818 Rapid City, SD (Pennington, SD)............................ 0.8345 Reading, PA (Berks, PA).................................... 0.9516 Redding, CA (Shasta, CA)................................... 1.1790 Reno, NV (Washoe, NV)...................................... 1.0768 Richland-Kennewick-Pasco, WA (Benton, WA, Franklin, WA).... 1.0221 Richmond-Petersburg, VA (Charles City County, VA, Chesterfield, VA, Colonial Heights City, VA, Dinwiddie, VA, Goochland, VA, Hanover, VA, Henrico, VA, Hopewell City, VA, New Kent, VA, Petersburg City, VA, Powhatan, VA, Prince George, VA, Richmond City, VA)..................... 0.9152 Riverside-San Bernardino, CA (Riverside, CA, San Bernardino, CA)........................................... 1.1145 Roanoke, VA (Botetourt, VA, Roanoke, VA, Roanoke City, VA, Salem City, VA)........................................... 0.8402 Rochester, MN (Olmstead, MN)............................... 1.0502 Rochester, NY (Genesee, NY, Livingston, NY, Monroe, NY, Ontario, NY, Orleans, NY, Wayne, NY)...................... 0.9524 Rockford, IL (Boone, IL, Ogle, IL, Winnebago, IL).......... 0.9081 Rocky Mount, NC (Edgecombe, NC, Nash, NC).................. 0.9029 Sacramento, CA (El Dorado, CA, Placer, CA, Sacramento, CA). 1.2202 Saginaw-Bay City-Midland, MI (Bay, MI, Midland, MI, Saginaw, MI).............................................. 0.9564 St. Cloud, MN (Benton, MN, Stearns, MN).................... 0.9544 St. Joseph, MO (Andrews, MO, Buchanan, MO)................. 0.8366 St. Louis, MO-IL (Clinton, IL, Jersey, IL, Madison, IL, Monroe, IL, St. Clair, IL, Franklin, MO, Jefferson, MO, Lincoln, MO, St. Charles, MO, St. Louis, MO, St. Louis City, MO, Warren, MO)..................................... 0.9130 Salem, OR (Marion, OR, Polk, OR)........................... 0.9976 Salinas, CA (Monterey, CA)................................. 1.4513 Salt Lake City-Ogden, UT (Davis, UT, Salt Lake, UT, Weber, UT)....................................................... 0.9862 San Angelo, TX (Tom Green, TX)............................. 0.7780 San Antonio, TX (Bexar, TX, Comal, TX, Guadalupe, TX, Wilson, TX)............................................... 0.8499 San Diego, CA (San Diego, CA).............................. 1.2225 San Francisco, CA (Marin, CA, San Francisco, CA, San Mateo, CA)....................................................... 1.4091 San Jose, CA (Santa Clara, CA)............................. 1.4332 San Juan-Bayamon, PR (Aguas Buenas, PR, Barceloneta, PR, Bayamon, PR, Canovanas, PR, Carolina, PR, Catano, PR, Ceiba, PR, Comerio, PR, Corozal, PR, Dorado, PR, Fajardo, PR, Florida, PR, Guaynabo, PR, Humacao, PR, Juncos, PR, Los Piedras, PR, Loiza, PR, Luguillo, PR, Manati, PR, Naranjito, PR, Rio Grande, PR, San Juan, PR, Toa Alta, PR, Toa Baja, PR, Trujillo Alto, PR, Vega Alta, PR, Vega Baja, PR, Yabucoa, PR).......................................... 0.4618 San Luis Obispo-Atascadero-Pasa Robles, CA (San Luis Obispo, CA)............................................... 1.1374 Santa Barbara-Santa Maria-Lompoc, CA (Santa Barbara, CA)... 1.0688 Santa Cruz-Watsonville, CA (Santa Cruz, CA)................ 1.4187 Santa Fe, NM (Los Alamos, NM, Santa Fe, NM)................ 1.0332 Santa Rosa, CA (Sonoma, CA)................................ 1.2267 Sarasota-Bradenton, FL (Manatee, FL, Sarasota, FL)......... 0.9757 Savannah, GA (Bryan, GA, Chatham, GA, Effingham, GA)....... 0.8638 Scranton-Wilkes Barre-Hazleton, PA (Columbia, PA, Lackawanna, PA, Luzerne, PA, Wyoming, PA)................. 0.8539 Seattle-Bellevue-Everett, WA (Island, WA, King, WA, Snohomish, WA)............................................ 1.1375 Sharon, PA (Mercer, PA).................................... 0.8783 Sheboygan, WI (Sheboygan, WI).............................. 0.8471 Sherman-Denison, TX (Grayson, TX).......................... 0.8499 Shreveport-Bossier City, LA (Bossier, LA, Caddo, LA, Webster, LA).............................................. 0.9381 Sioux City, IA-NE (Woodbury, IA, Dakota, NE)............... 0.8031 Sioux Falls, SD (Lincoln, SD, Minnehaha, SD)............... 0.8712 South Bend, IN (St. Joseph, IN)............................ 0.9880 Spokane, WA (Spokane, WA).................................. 1.0486 Springfield, IL (Menard, IL, Sangamon, IL)................. 0.8713 Springfield, MO (Christian, MO, Greene, MO, Webster, MO)... 0.8036 Springfield, MA (Hampden, MA, Hampshire, MA)............... 1.0718 State College, PA (Centre, PA)............................. 0.9635 Steubenville-Weirton, OH-WV (Jefferson, OH, Brook, WV, Hancock, WV).............................................. 0.8645 Stockton-Lodi, CA (San Joaquin, CA)........................ 1.1518 Sumter, SC (Sumter, SC).................................... 0.7921 Syracuse, NY (Cayuga, NY, Madison, NY, Onondaga, NY, Oswego, NY)............................................... 0.9480 Tacoma, WA (Pierce, WA).................................... 1.1016 Tallahassee, FL (Gadsden, FL, Leon, FL).................... 0.8838 Tampa-St. Petersburg-Clearwater, FL (Hernando, FL, Hillsborough, FL, Pasco, FL, Pinellas, FL)................ 0.9196 Terre-Haute, IN (Clay, IN, Vermillion, IN, Vigo, IN)....... 0.8614 Texarkana, AK-Texarkana, TX (Miller, AR, Bowie, TX)........ 0.8699 Toledo, OH (Fulton, OH, Lucas, OH, Wood, OH)............... 1.0140 Topeka, KS (Shawnee, KS)................................... 0.9438 Trenton, NJ (Mercer, NJ)................................... 1.0380 Tucson, AZ (Pima, AZ)...................................... 0.9180 Tulsa, OK (Creek, OK, Osage, OK, Rogers, OK, Tulsa, OK, Wagoner, OK).............................................. 0.8074 Tuscaloosa, AL (Tuscaloosa, AL)............................ 0.8187 Tyler, TX (Smith, TX)...................................... 0.9567 Utica-Rome, NY (Herkimer, NY, Oneida, NY).................. 0.8401 Vallejo-Fairfield-Napa, CA (Napa, CA, Solano, CA).......... 1.3528 Ventura, CA (Ventura, CA).................................. 1.0544 Victoria, TX (Victoria, TX)................................ 0.8474 Vineland-Millville-Bridgeton, NJ (Cumberland, NJ).......... 1.0110 Visalia-Tulare-Porterville, CA (Tulare, CA)................ 0.9977 Waco, TX (McLennan, TX).................................... 0.7696 Washington, DC-MD-VA-WV (District of Columbia, DC, Calvert, MD, Charles, MD, Frederick, MD, Montgomery, MD, Prince Georges, MD, Alexandria City, VA, Arlington, VA, Clarke, VA, Culpepper, VA, Fairfax, VA, Fairfax City, VA, Falls Church City, VA, Fauquier, VA, Fredericksburg City, VA, King George, VA, Loudoun, VA, Manassas City, VA, Manassas Park City, VA, Prince William, VA, Spotsylvania, VA, Stafford, VA, Warren, VA, Berkeley, WV, Jefferson, WV).... 1.0780 Waterloo-Cedar Falls, IA (Black Hawk, IA).................. 0.8643 Wausau, WI (Marathon, WI).................................. 1.0545 West Palm Beach-Boca Raton, FL (Palm Beach, FL)............ 1.0309 Wheeling, OH-WV (Belmont, OH, Marshall, WV, Ohio, WV)...... 0.7707 Wichita, KS (Butler, KS, Harvey, KS, Sedgwick, KS)......... 0.9403 Wichita Falls, TX (Archer, TX, Wichita, TX)................ 0.7646 Williamsport, PA (Lycoming, PA)............................ 0.8548 Wilmington-Newark, DE-MD (New Castle, DE, Cecil, MD)....... 1.1538 Wilmington, NC (New Hanover, NC, Brunswick, NC)............ 0.9322 Yakima, WA (Yakima, WA).................................... 1.0221 Yolo, CA (Yolo, CA)........................................ 1.1431 York, PA (York, PA)........................................ 0.9415 Youngstown-Warren, OH (Columbiana, OH, Mahoning, OH, Trumbull, OH)............................................. 0.9937 Yuba City, CA (Sutter, CA, Yuba, CA)....................... 1.0324 Yuma, AZ (Yuma, AZ)........................................ 0.9732 ------------------------------------------------------------------------ Source: Health Care Financing Administration. TABLE D-19.--WAGE INDEX FOR RURAL AREAS, FISCAL YEAR 1998 ------------------------------------------------------------------------ State Wage index State Wage index ------------------------------------------------------------------------ Alabama...................... 0.7260 Nebraska....... 0.7401 Alaska....................... 1.2302 Nevada......... 0.8914 Arizona...................... 0.7989 New Hampshire.. 0.9724 Arkansas..................... 0.6995 New Jersey..... (\1\) California................... 0.9977 New Mexico..... 0.8110 Colorado..................... 0.8129 New York....... 0.8401 Connecticut.................. 1.2617 North Carolina. 0.7939 Delaware..................... 0.8925 North Dakota... 0.7360 Florida...................... 0.8838 Ohio........... 0.8434 Georgia...................... 0.7761 Oklahoma....... 0.7072 Hawaii....................... 1.0229 Oregon......... 0.9976 Idaho........................ 0.8221 Pennsylvania... 0.8421 Illinois..................... 0.7644 Puerto Rico.... 0.4224 Indiana...................... 0.8161 Rhode Island... (\1\) Iowa......................... 0.7391 South Carolina. 0.7921 Kansas....................... 0.7203 South Dakota... 0.6983 Kentucky..................... 0.7772 Tennessee...... 0.7353 Louisiana.................... 0.7383 Texas.......... 0.7404 Maine........................ 0.8468 Utah........... 0.8926 Maryland..................... 0.8617 Vermont........ 0.9314 Massachusetts................ 1.0718 Virginia....... 0.7782 Michigan..................... 0.8923 Washington..... 1.0221 Minnesota.................... 0.8180 West Virginia.. 0.7966 Mississippi.................. 0.6911 Wisconsin...... 0.8471 Missouri..................... 0.7207 Wyoming........ 0.8247 Montana...................... 0.8302 ------------------------------------------------------------------------ \1\ All counties within this State are classified as urban. Source: Health Care Financing Administration. TABLE D-20.--WAGE INDEX FOR HOSPITALS THAT ARE RECLASSIFIED, FISCAL YEAR 1996 ------------------------------------------------------------------------ Area reclassified to Wage index ------------------------------------------------------------------------ Abilene, TX................................................ 0.8287 Albuquerque, NM............................................ 0.9329 Alexandria, LA............................................. 0.8269 Amarillo, TX............................................... 0.9277 Anchorage, AK.............................................. 1.2998 Asheville, NC.............................................. 0.9072 Athens, GA................................................. 0.9087 Atlanta, GA................................................ 0.9823 Austin-San Marcos, TX...................................... 0.9133 Bangor, ME................................................. 0.9478 Barnstable-Yarmouth, MA.................................... 1.3827 Baton Rouge, LA............................................ 0.8382 Benton Harbor, MI.......................................... 0.8923 Bergen-Passaic, NJ......................................... 1.1570 Billings, MT............................................... 0.9609 Birmingham, AL............................................. 0.9005 Bismarck, ND............................................... 0.7859 Boise City, ID............................................. 0.8887 Boston-Worcester-Lawrence-Lowel-Brockton, MA-NH............ 1.1436 Caguas, PR................................................. 0.4508 Casper, WY................................................. 0.9013 Champaign-Urbana, IL....................................... 0.8706 Charlotte-Gastonia-Rock Hill, NC........................... 0.9710 Charlottesville, VA........................................ 0.8885 Chattanooga, TN-GA......................................... 0.8658 Chicago, IL................................................ 1.0759 Cincinnati, OH-KY-IN....................................... 0.9521 Cleveland-Lorain-Elyria, OH................................ 0.9804 Columbia, MO............................................... 0.8759 Columbus, OH............................................... 0.9793 Dallas, TX................................................. 0.9674 Davenport-Rock Island-Moline, IA-IL........................ 0.8405 Denver, CO................................................. 1.0386 Des Moines, IA............................................. 0.8837 Detroit, MI................................................ 1.0840 Duluth-Superior, MN-WI..................................... 0.9779 Dutchess County, NY........................................ 1.0364 Eugene-Springfield, OR..................................... 1.1659 Fargo-Moorhead, ND-MN...................................... 0.8729 Fayetteville, NC........................................... 0.8491 Flint, MI.................................................. 1.1171 Florence, AL............................................... 0.7716 Florence, SC............................................... 0.8711 Fort Lauderdale, FL........................................ 1.0487 Fort Pierce-Port St. Lucie, FL............................. 1.0008 Fort Walton Beach, FL...................................... 0.8653 Fort Worth-Arlington, TX................................... 0.9997 Gadsden, AL................................................ 0.8815 Gainesville, FL............................................ 0.9616 Gary, IN................................................... 0.9114 Grand Forks, ND-MN......................................... 0.8815 Grand Junction, CO......................................... 0.9491 Great Falls, MT............................................ 0.9306 Greeley, CO................................................ 0.9791 Green Bay, WI.............................................. 0.9585 Greensboro-Winston-Salem-High Point, NC.................... 0.9351 Harrisburg-Lebanon-Carlisle, PA............................ 1.0076 Honolulu, HI............................................... 1.1817 Houma, LA.................................................. 0.7854 Houston, TX................................................ 0.9855 Huntington-Ashland, WV-KY-OH............................... 0.9160 Huntsville, AL............................................. 0.8485 Indianapolis, IN........................................... 0.9848 Iowa City.................................................. 0.9198 Jackson, MS................................................ 0.7790 Johnson City-Kingsport-Bristol, TN......................... 0.9114 Jonesboro, AR.............................................. 0.7443 Joplin, MO................................................. 0.7541 Kalamazoo-Battle Creek, MI................................. 1.0668 Kansas City, MO-KS......................................... 0.9564 Knoxville, TN.............................................. 0.8831 Lafayette, LA.............................................. 0.8227 Lafayette, IN.............................................. 0.9174 Lansing-East Lansing, MI................................... 1.0088 Las Cruces, NM............................................. 0.8658 Las Vegas, NV-AZ........................................... 1.0592 Lexington, KY.............................................. 0.8416 Lima, OH................................................... 0.9185 Lincoln, NE................................................ 0.9035 Little Rock-North Little Rock, AR.......................... 0.8490 Longview-Marshall, TX...................................... 0.8509 Los Angeles-Long Beach, CA................................. 1.2268 Louisville, KY-IN.......................................... 0.9507 Macon, GA.................................................. 0.9227 Madison, WI................................................ 1.0055 Mansfield, OH.............................................. 0.8639 Medford-Ashland, OR........................................ 1.0354 Memphis, TN-AR-MS.......................................... 0.8589 Milwaukee-Waukesha, WI..................................... 0.9819 Minneapolis-St. Paul, MN-WI................................ 1.0733 Monroe, LA................................................. 0.8414 Montgomery, AL............................................. 0.7813 Nashville, TN.............................................. 0.9182 New Haven-Bridgeport-Stamford-Waterbury-Danbury, CT........ 1.2619 New London-Norwich, CT..................................... 1.2258 New Orleans, LA............................................ 0.9566 New York-Newark, NY-NJ-PA.................................. 1.3982 Newark, NJ................................................. 1.1111 Newburgh, NY-PA............................................ 1.1283 Oakland, CA................................................ 1.5158 Odessa-Midland, TX......................................... 0.8516 Oklahoma City, OK.......................................... 0.8481 Omaha, NE-IA............................................... 0.9421 Orange County, CA.......................................... 1.1532 Peoria-Pekin, IL........................................... 0.8586 Philadelphia, PA-NJ........................................ 1.1379 Pittsburgh, PA............................................. 0.9583 Pocatello, ID.............................................. 0.9000 Portland, ME............................................... 0.9627 Portland-Vancouver, OR-WA.................................. 1.1344 Provo-Orem, UT............................................. 1.0073 Raleigh-Durham-Chapel Hill, NC............................. 0.9818 Rapid City, SD............................................. 0.8345 Rochester, MN.............................................. 1.0502 Rockford, IL............................................... 0.9081 Sacramento, CA............................................. 1.2202 Saginaw-Bay City-Midland, MI............................... 0.9564 St. Cloud, MN.............................................. 0.9544 St. Louis, MO-IL........................................... 0.9130 Salinas, CA................................................ 1.4299 Salt Lake City-Ogden, UT................................... 0.9862 San Diego, CA.............................................. 1.2225 San Francisco, CA.......................................... 1.4091 Santa Fe, NM............................................... 1.0007 Santa Rosa, CA............................................. 1.2146 Seattle-Bellevue-Everett, WA............................... 1.1375 Sherman-Denison, TX........................................ 0.8324 Sioux City, IA-NE.......................................... 0.8031 Sioux Falls, SD............................................ 0.8607 South Bend, IN............................................. 0.9880 Spokane, WA................................................ 1.0311 Springfield, IL............................................ 0.8610 Springfield, MO............................................ 0.8036 Stockton-Lodi, CA.......................................... 1.1518 Syracuse, NY............................................... 0.9480 Tampa-St. Petersburg-Clearwater, FL........................ 0.9196 Texarkana, TX-Texarkana, AR................................ 0.8699 Topeka, KS................................................. 0.9310 Tucson, AZ................................................. 0.9180 Tulsa, OK.................................................. 0.8074 Tyler, TX.................................................. 0.9421 Vallejo-Fairfield-Napa, CA................................. 1.3528 Washington, DC-MD-VA-WV.................................... 1.0780 Waterloo-Cedar Falls, IA................................... 0.8643 Wausau, WI................................................. 0.9845 Wichita, KS................................................ 0.9157 Wichita Falls, TX.......................................... 0.7646 Rural Florida.............................................. 0.8838 Rural Louisiana............................................ 0.7383 Rural Minnesota............................................ 0.8180 Rural Missouri............................................. 0.7207 Rural New Hampshire........................................ 0.9724 Rural New Mexico........................................... 0.8110 Rural North Carolina....................................... 0.7939 Rural Oregon............................................... 0.9976 Rural Washington........................................... 1.0221 Rural West Virginia........................................ 0.7966 Rural Wyoming.............................................. 0.8247 ------------------------------------------------------------------------ Source: Health Care Financing Administration. TABLE D-21.--DIAGNOSIS-RELATED GROUPS RELATIVE WEIGHTS, FISCAL YEARS 1997 AND 1998 ---------------------------------------------------------------------------------------------------------------- Percent DRG MDC Type Title 1997 1998 change ---------------------------------------------------------------------------------------------------------------- 1 1 SURG Craniotomy age >17 except for 3.0486 3.0907 1.4 trauma. 2 1 SURG Craniotomy for trauma age >17.. 3.0134 3.0511 1.3 3 1 SURG \1\ Craniotomy age 0-17............ 1.9167 1.9484 1.7 4 1 SURG Spinal procedures.............. 2.3399 2.3858 2.0 5 1 SURG Extracranial vascular 1.5143 1.5041 -0.7 procedures. 6 1 SURG Carpal tunnel release.......... 0.7419 0.7582 2.2 7 1 SURG Periph and cranial nerve and 2.4886 2.4717 -0.7 other nerv syst proc with CC. 8 1 SURG Periph and cranial nerve and 1.0962 1.2142 10.8 other nerv syst proc without CC. 9 1 MED Spinal disorders and injuries.. 1.2677 1.2646 -0.2 10 1 MED Nervous system neoplasms with 1.2196 1.2184 -0.1 CC. 11 1 MED Nervous system neoplasms 0.8000 0.7879 -1.5 without CC. 12 1 MED Degenerative nervous system 0.9457 0.9370 -0.9 disorders. 13 1 MED Multiple sclerosis and 0.7770 0.7832 0.8 cerebellar ataxia. 14 1 MED Specific cerebrovascular 1.1999 1.1889 -0.9 disorders except TIA. 15 1 MED Transient ischemic attack and 0.7231 0.7241 0.1 precerebral occlusions. 16 1 MED Nonspecific cerebrovascular 1.0371 1.0452 0.8 disorders with CC. 17 1 MED Nonspecific cerebrovascular 0.6331 0.6161 -2.7 disorders without CC. 18 1 MED Cranial and peripheral nerve 0.9319 0.9399 0.9 disorders with CC. 19 1 MED Cranial and peripheral nerve 0.6230 0.6293 1.0 disorders without CC. 20 1 MED Nervous system infection except 2.4854 2.5786 3.7 viral meningitis. 21 1 MED Viral meningitis............... 1.4910 1.4866 -0.3 22 1 MED Hypertensive encephalopathy.... 0.8353 0.8594 2.9 23 1 MED Nontraumatic stupor and coma... 0.8089 0.7777 -3.9 24 1 MED Seizure and headache age >17 0.9694 0.9578 -1.2 with CC. 25 1 MED Seizure and headache age >17 0.5793 0.5821 0.5 without CC. 26 1 MED Seizure and headache age 0-17.. 0.7387 0.9601 30.0 27 1 MED Traumatic stupor and coma, coma 1.3060 1.2670 -3.0 >1 HR. 28 1 MED Traumatic stupor and coma, coma 1.2033 1.1707 -2.7 <1 HR age >17 with CC. 29 1 MED Traumatic stupor and coma, coma 0.6371 0.6383 0.2 <1 HR age >17 without CC. 30 1 MED \1\ Traumatic stupor and coma, coma 0.3241 0.3295 1.7 <1 HR age 0-17. 31 1 MED Concussion age >17 with CC..... 0.8412 0.8369 -0.5 32 1 MED Concussion age >17 without CC.. 0.4861 0.5109 5.1 33 1 MED \1\ Concussion age 0-17............ 0.2037 0.2071 1.7 34 1 MED Other disorders of nervous 1.0673 1.0385 -2.7 system with CC. 35 1 MED Other disorders of nervous 0.6149 0.5941 -3.4 system, without CC. 36 2 SURG Retinal procedures............. 0.6134 0.6265 2.1 37 2 SURG Orbital procedures............. 0.9323 0.9725 4.3 38 2 SURG Primary iris procedures........ 0.4282 0.4826 12.7 39 2 SURG Lens procedures with or without 0.5184 0.5406 4.3 vitrectomy. 40 2 SURG Extraocular procedures except 0.7072 0.7341 3.8 orbit age >17. 41 2 SURG \1\ Extraocular procedures except 0.3299 0.3354 1.7 orbit age 0-17. 42 2 SURG Introcular procedures except 0.5816 0.5676 -2.4 retina, iris and lens. 43 2 MED Hyphema........................ 0.4520 0.4119 -8.9 44 2 MED Acute major eye infections..... 0.6237 0.6072 -2.6 45 2 MED Neurological eye disorders..... 0.6525 0.6730 3.1 46 2 MED Other disorders of the eye age 0.7656 0.7234 -5.5 >17 with CC. 47 2 MED Other disorders of the eye age 0.4664 0.4623 -0.9 >17 without CC. 48 2 MED \1\ Other disorders of the eye age 0.2907 0.2955 1.7 0-17. 49 3 SURG Major head and neck procedures. 1.7245 1.8074 4.8 50 3 SURG Sialoadenectomy................ 0.7686 0.8143 5.9 51 3 SURG Salivary gland procedures 0.7345 0.8367 13.9 except sialoadenectomy. 52 3 SURG Cleft lip and palate repair.... 1.0271 1.2768 24.3 53 3 SURG Sinus and mastoid procedures 1.0128 1.0682 5.5 age >17. 54 3 SURG \1\ Sinus and mastoid procedures 0.4712 0.4790 1.7 age 0-17. 55 3 SURG Miscellaneous ear, nose, mouth 0.7880 0.8366 6.2 and throat procedures. 56 3 SURG Rhinoplasty.................... 0.8283 0.8830 6.6 57 3 SURG T&A proc, except tonsillectomy 0.9325 1.0182 9.2 and/or adenoidectomy only age >17. 58 3 SURG \1\ T&A proc, except tonsillectomy 0.2676 0.2720 1.6 and/or adenoidectomy only age 0-17. 59 3 SURG Tonsillectomy and/or 0.7439 0.8238 10.7 adenoidectomy only age >17. 60 3 SURG \1\ Tonsillectomy and/or 0.2038 0.2072 1.7 adenoidectomy only age 0-17. 61 3 SURG Myringotomy with tube insertion 1.1960 1.1181 -6.5 age >17. 62 3 SURG \1\ Myringotomy with tube insertion 0.2885 0.2933 1.7 age 0-17. 63 3 SURG Other ear, nose, mouth and 1.2168 1.2444 2.3 throat O.R. procedures. 64 3 MED Ear, nose, mouth and throat 1.1737 1.1568 -1.4 malignancy. 65 3 MED Dysequilibrium................. 0.5195 0.5177 -0.3 66 3 MED Epistaxis...................... 0.5366 0.5605 4.5 67 3 MED Epiglottitis................... 0.8397 0.7866 -6.3 68 3 MED Otitis media and uri age >17 0.7098 0.6831 -3.8 with CC. 69 3 MED Otitis media and uri age >17 0.5239 0.5160 -1.5 without CC. 70 3 MED Otitis media and uri age 0-17.. 0.3727 0.3892 4.4 71 3 MED Laryngotracheitis.............. 0.7702 0.6688 -13.2 72 3 MED Nasal trauma and deformity..... 0.6532 0.6364 -2.6 73 3 MED Other ear, nose, mouth and 0.7505 0.7660 2.1 throat diagnoses age >17. 74 3 MED \1\ Other ear, nose, mouth and 0.3278 0.3332 1.6 throat diagnoses age 0-17. 75 4 SURG Major chest procedures......... 3.1951 3.1958 0.0 76 4 SURG Other resp system O.R. 2.6036 2.6427 1.5 procedures with CC. 77 4 SURG Other resp system O.R. 1.1593 1.1150 -3.8 procedures without CC. 78 4 MED Pulmonary embolism............. 1.4292 1.4264 -0.2 79 4 MED Respiratory infections and 1.6300 1.6258 -0.3 inflammations age 17 with CC. 80 4 MED Respiratory infections and 0.9436 0.9121 -3.3 inflammations age 17 without CC. 81 4 MED \1\ Respiratory infections and 1.4845 1.5091 1.7 inflammations age 0-17. 82 4 MED Respiratory neoplasms.......... 1.3319 1.3329 0.1 83 4 MED Major chest trauma with CC..... 0.9782 0.9716 -0.7 84 4 MED Major chest trauma without CC.. 0.5319 0.5260 -1.1 85 4 MED Pleural effusion with CC....... 1.2200 1.2212 0.1 86 4 MED Pleural effusion without CC.... 0.7117 0.6715 -5.6 87 4 MED Pulmonary edema and respiratory 1.3615 1.3639 0.2 failure. 88 4 MED Chronic obstructive pulmonary 0.9846 0.9705 -1.4 disease. 89 4 MED Simple pneumonia and pleurisy 1.1156 1.1006 -1.3 age >17 with CC. 90 4 MED Simple pneumonia and pleurisy 0.6978 0.6773 -2.9 age >17 without CC. 91 4 MED Simple pneumonia and pleurisy 0.7524 0.7940 5.5 age 0-17. 92 4 MED Interstitial lung diseases with 1.2029 1.1947 -0.7 CC. 93 4 MED Interstitial lung disease 0.7498 0.7423 -1.0 without CC. 94 4 MED Pneumothorax with CC........... 1.1780 1.1857 0.7 95 4 MED Pneumothorax without CC........ 0.5996 0.5974 -0.4 96 4 MED Bronchitis and asthma age >17 0.8272 0.8005 -3.2 with CC. 97 4 MED Bronchitis and asthma age >17 0.6035 0.5887 -2.5 without CC. 98 4 MED Bronchitis and asthma age 0-17. 0.7807 0.6298 -19.3 99 4 MED Respiratory signs and symptoms 0.6869 0.6710 -2.3 with CC. 100 4 MED Respiratory signs and symptoms 0.5113 0.5109 -0.1 without CC. 101 4 MED Other respiratory system 0.8748 0.8518 -2.6 diagnoses with CC. 102 4 MED Other respiratory system 0.5335 0.5295 -0.7 diagnoses without CC. 103 5 SURG Heart transplant............... 15.3358 16.5746 8.1 104 5 SURG Cardiac valve procedures with 7.3199 7.3563 0.5 cardiac cath. 105 5 SURG Cardiac valve procedures 5.5998 5.7109 2.0 without cardiac cath. 106 5 SURG Coronary bypass with cardiac 5.5564 5.5843 0.5 cath. 107 5 SURG Coronary bypass without cardiac 4.0685 4.0812 0.3 cath. 108 5 SURG Other cardiothoracic procedures 5.9135 6.1282 3.6 109 ..... ..................... No longer valid................ .......... .......... .......... 110 5 SURG Major cardiovascular procedures 4.1589 4.1964 0.9 with CC. 111 5 SURG Major cardiovascular procedures 2.2875 2.2409 -2.0 without CC. 112 5 SURG Percutaneous cardiovascular 2.0946 2.0025 -4.4 procedures. 113 5 SURG Amputation for circ system 2.6935 2.6579 -1.3 disorders except upper limb and toe. 114 5 SURG Upper limb and toe amputation 1.5152 1.5363 1.4 for circ system disorders. 115 5 SURG Perm cardiac pacemaker implant 3.6827 3.5476 -3.7 with ami, Heart failure or shock. 116 5 SURG Other perm cardiac pacemaker 2.4150 2.5321 4.8 implant or aicd lead or generator proc. 117 5 SURG Cardiac pacemaker revision 1.1764 1.1950 1.6 except device replacement. 118 5 SURG Cardiac pacemaker device 1.5825 1.5889 0.4 replacement. 119 5 SURG Vein ligation and stripping.... 1.1435 1.1997 4.9 120 5 SURG Other circulatory system O.R. 1.9318 1.9158 -0.8 procedures. 121 5 MED Circulatory disorders with ami 1.6482 1.6537 0.3 and c.v. comp disch alive. 122 5 MED Circulatory disorders with ami 1.1617 1.1446 -1.5 without c.v. comp disch alive. 123 5 MED Circulatory disorders with ami, 1.4555 1.4695 1.0 expired. 124 5 MED Circulatory disorders except 1.3258 1.3565 2.3 ami, with card cath and complex diag. 125 5 MED Circulatory disorders except 0.9246 0.9738 5.3 ami, with card cath without complex diag. 126 5 MED Acute and subacute endocarditis 2.5379 2.4879 -2.0 127 5 MED Heart failure and shock........ 1.0265 1.0199 -0.6 128 5 MED Deep vein thrombophlebitis..... 0.7861 0.7807 -0.7 129 5 MED Cardiac arrest, unexplained.... 1.1316 1.1414 0.9 130 5 MED Peripheral vascular disorders 0.9352 0.9410 0.6 with CC. 131 5 MED Peripheral vascular disorders 0.6038 0.6040 0.0 without CC. 132 5 MED Atherosclerosis with CC........ 0.6840 0.6749 -1.3 133 5 MED Atherosclerosis without CC..... 0.5537 0.5360 -3.2 134 5 MED Hypertension................... 0.5787 0.5760 -0.5 135 5 MED Cardiac congenital and valvular 0.8838 0.8336 -5.7 disorders age 17 with CC. 136 5 MED Cardiac congenital and valvular 0.5629 0.5709 1.4 disorders age 17 without CC. 137 5 MED \1\ Cardiac congenital and valvular 0.7999 0.8131 1.7 disorders age 0-17. 138 5 MED Cardiac arrhythmia and 0.8008 0.7962 -0.6 conduction disorders with CC. 139 5 MED Cardiac arrhythmia and 0.4971 0.4982 0.2 conduction disorders without CC. 140 5 MED Angina pectoris................ 0.6205 0.5993 -3.4 141 5 MED Syncope and collapse with CC... 0.7128 0.7005 -1.7 142 5 MED Syncope and collapse without CC 0.5288 0.5231 -1.1 143 5 MED Chest pain..................... 0.5223 0.5200 -0.4 144 5 MED Other circulatory system 1.0857 1.0904 0.4 diagnoses with CC. 145 5 MED Other circulatory system 0.6208 0.6401 3.1 diagnoses without CC. 146 6 SURG Rectal resection with CC....... 2.6363 2.7356 3.8 147 6 SURG Rectal resection without CC.... 1.6018 1.5885 -0.8 148 6 SURG Major small and large bowel 3.3710 3.3883 0.5 procedures with CC. 149 6 SURG Major small and large bowel 1.5999 1.5495 -3.2 procedures without CC. 150 6 SURG Peritoneal adhesiolysis with CC 2.6828 2.7109 1.0 151 6 SURG Peritoneal adhesiolysis without 1.2910 1.2645 -2.1 CC. 152 6 SURG Minor small and large bowel 1.9311 1.9139 -0.9 procedures with CC. 153 6 SURG Minor small and large bowel 1.1568 1.1634 0.6 procedures without CC. 154 6 SURG Stomach, esophageal and 4.1817 4.1851 0.1 duodenal procedures age >17 with CC. 155 6 SURG Stomach, esophageal and 1.4059 1.3350 -5.0 duodenal procedures age >17 without CC. 156 6 SURG \1\ Stomach, esophageal and 0.8238 0.8374 1.7 duodenal procedures age 0-17. 157 6 SURG Anal and stomal procedures with 1.1352 1.1824 4.2 CC. 158 6 SURG Anal and stomal procedures 0.6077 0.6272 3.2 without CC. 159 6 SURG Hernia procedures except 1.2268 1.2548 2.3 inguinal and femoral age >17 with CC. 160 6 SURG Hernia procedures except 0.7026 0.7177 2.1 inguinal and femoral age >17 without CC. 161 6 SURG Inguinal and femoral hernia 1.0066 1.0573 5.0 procedures age >17 with CC. 162 6 SURG Inguinal and femoral hernia 0.5707 0.5856 2.6 procedures age >17 without CC. 163 6 SURG Hernia procedures age 0-17..... 0.7706 0.8660 12.4 164 6 SURG Appendectomy with complicated 2.3386 2.3412 0.1 principal diag with CC. 165 6 SURG Appendectomy with complicated 1.2582 1.2270 -2.5 principal diag without CC. 166 6 SURG Appendectomy without 1.4497 1.4582 0.6 complicated principal diag with CC. 167 6 SURG Appendectomy without 0.8431 0.8373 -0.7 complicated principal diag without CC. 168 3 SURG Mouth procedures with CC....... 1.0929 1.1187 2.4 169 3 SURG Mouth procedures without CC.... 0.6717 0.6903 2.8 170 6 SURG Other digestive system O.R. 2.7453 2.7587 0.5 procedures with CC. 171 6 SURG Other digestive system O.R. 1.1202 1.1146 -0.5 procedures without CC. 172 6 MED Digestive malignancy with CC... 1.2920 1.2867 -0.4 173 6 MED Digestive malignancy without CC 0.6769 0.6744 -0.4 174 6 MED G.I. Hemorrhage with CC........ 0.9952 0.9925 -0.3 175 6 MED G.I. Hemorrhage without CC..... 0.5485 0.5366 -2.2 176 6 MED Complicated peptic ulcer....... 1.0856 1.1011 1.4 177 6 MED Uncomplicated peptic ulcer with 0.8335 0.8556 2.7 CC. 178 6 MED Uncomplicated peptic ulcer 0.6091 0.6241 2.5 without CC. 179 6 MED Inflammatory bowel disease..... 1.1188 1.1100 -0.8 180 6 MED G.I. obstruction with CC....... 0.9194 0.9153 -0.4 181 6 MED G.I. obstruction without CC.... 0.5338 0.5204 -2.5 182 6 MED Esophagitis, gastroent and misc 0.7789 0.7664 -1.6 digest disorders age >17 with CC. 183 6 MED Esophagitis, gastroent and misc 0.5553 0.5496 -1.0 digest disorders age >17 without CC. 184 6 MED Esophagitis, gastroent and misc 0.5414 0.5930 9.5 digest disorders age 0-17. 185 3 MED Dental and oral dis except 0.8424 0.8424 0.0 extractions and restorations age >17. 186 3 MED \1\ Dental and oral dis except 0.3140 0.3192 1.7 extractions and restorations age 0-17. 187 3 MED Dental extractions and 0.7104 0.7049 -0.8 restorations. 188 6 MED Other digestive system 1.0591 1.0727 1.3 diagnoses age >17 with CC. 189 6 MED Other digestive system 0.5640 0.5488 -2.7 diagnoses age >17 without CC. 190 6 MED Other digestive system 0.8769 0.8786 0.2 diagnoses age 0-17. 191 7 SURG Pancreas, liver and shunt 4.4543 4.3490 -2.4 procedures with CC. 192 7 SURG Pancreas, liver and shunt 1.7889 1.7057 -4.7 procedures without CC. 193 7 SURG Biliary tract proc except only 3.2878 3.2666 -0.6 cholecyst with or without C.D.E. with CC. 194 7 SURG Biliary tract proc except only 1.7549 1.6688 -4.9 cholecyst with or without C.D.E. without CC. 195 7 SURG Cholecystectomy with C.D.E. 2.6894 2.7112 0.8 with CC. 196 7 SURG Cholecystectomy with C.D.E. 1.6127 1.6075 -0.3 without CC. 197 7 SURG Cholecystectomy except by 2.2679 2.3085 1.8 laparoscope without C.D.E. with CC. 198 7 SURG Cholecystectomy except by 1.1738 1.1693 -0.4 laparoscope without C.D.E. without CC. 199 7 SURG Hepatobiliary diagnostic 2.3728 2.3523 -0.9 procedure for malignancy. 200 7 SURG Hepatobiliary diagnostic 3.1772 3.0210 -4.9 procedure for nonmalignancy. 201 7 SURG Other hepatobiliary or pancreas 3.7669 3.4752 -7.7 O.R. procedures. 202 7 MED Cirrhosis and alcoholic 1.3675 1.3255 -3.1 hepatitis. 203 7 MED Malignancy of hepatobiliary 1.2486 1.2605 1.0 system or pancreas. 204 7 MED Disorders of pancreas except 1.2004 1.2117 0.9 malignancy. 205 7 MED Disorders of liver except 1.2194 1.2144 -0.4 malig, cirr, alc hepa with CC. 206 7 MED Disorders of liver except 0.7159 0.6543 -8.6 malig, cirr, alc hepa without CC. 207 7 MED Disorders of the biliary tract 1.0508 1.0507 0.0 with CC. 208 7 MED Disorders of the biliary tract 0.6045 0.6039 -0.1 without CC. 209 8 SURG Major joint and limb 2.2606 2.2337 -1.2 reattachment procedures of lower extremity. 210 8 SURG Hip and femur procedures except 1.8460 1.8265 -1.1 major joint age >17 with CC. 211 8 SURG Hip and femur procedures except 1.2740 1.2541 -1.6 major joint age >17 without CC. 212 8 SURG Hip and femur procedures except 1.1487 1.1311 -1.5 major joint age 0-17. 213 8 SURG Amputation for musculoskeletal 1.7049 1.6513 -3.1 system and conn tissue disorders. 214 ..... ..................... No longer valid................ 1.9255 .......... .......... 215 ..... ..................... No longer valid................ 1.1119 .......... .......... 216 8 SURG Biopsies of musculoskeletal 2.0784 2.1082 1.4 system and connective tissue. 217 8 SURG WND debrid and skin graft 2.8812 2.8033 -2.7 except hand, for muscskelet and conn tiss dis. 218 8 SURG Lower extrem and humer proc 1.4574 1.4576 0.0 except hip, foot, femur age >17 with CC. 219 8 SURG Lower extrem and humer proc 0.9553 0.9631 0.8 except hip, foot, femur age >17 without CC. 220 8 SURG \1\ Lower extrem and humer proc 0.5706 0.5800 1.6 except hip, foot, femur age 0- 17. 221 ..... ..................... No longer valid................ .......... .......... .......... 222 ..... ..................... No longer valid................ .......... .......... .......... 223 8 SURG Major shoulder/elbow proc, or 0.8720 0.9007 3.3 other upper extremity proc with CC. 224 8 SURG Shoulder, elbow or forearm 0.7417 0.7466 0.7 proc, exc major joint proc, without CC. 225 8 SURG Foot procedures................ 1.0020 1.0124 1.0 226 8 SURG Soft tissue procedures with CC. 1.3831 1.4095 1.9 227 8 SURG Soft tissue procedures without 0.7449 0.7729 3.8 CC. 228 8 SURG Major thumb or joint proc, or 0.9349 0.9542 2.1 other hand or wrist proc with CC. 229 8 SURG Hand or wrist proc, except 0.6512 0.6706 3.0 major joint proc, without CC. 230 8 SURG Local excision and removal of 1.0567 1.1296 6.9 int fix devices of hip and femur. 231 8 SURG Local excision and removal of 1.2263 1.2727 3.8 int fix devices except hip and femur. 232 8 SURG Arthroscopy.................... 1.0884 1.0629 -2.3 233 8 SURG Other musculoskelet sys and 2.0170 2.0329 0.8 conn tiss O.R. proc without CC. 234 8 SURG Other musculoskelet sys and 1.0675 1.1126 4.2 conn tiss O.R. proc without CC. 235 8 MED Fractures of femur............. 0.8395 0.7710 -8.2 236 8 MED Fractures of hip and pelvis.... 0.7620 0.7338 -3.7 237 8 MED Sprains, strains and 0.5637 0.5952 5.6 dislocations of hip, pelvis and thigh. 238 8 MED Osteomyelitis.................. 1.3796 1.3250 -4.0 239 8 MED Pathological fractures and 1.0115 0.9865 -2.5 musculoskeletal and conn tiss malignancy. 240 8 MED Connective tissue disorders 1.2112 1.2098 -0.1 with CC. 241 8 MED Connective tissue disorders 0.6029 0.5862 -2.8 without CC. 242 8 MED Septic arthritis............... 1.0492 1.0501 0.1 243 8 MED Medical back problems.......... 0.7241 0.7158 -1.1 244 8 MED Bone disease and specific 0.7279 0.7199 -1.1 arthropathies with CC. 245 8 MED Bone disease and specific 0.4954 0.5002 1.0 arthropathies without CC. 246 8 MED Nonspecific arthropathies...... 0.5887 0.5713 -3.0 247 8 MED Signs and symptoms of 0.5523 0.5587 1.2 musculoskeletal system and conn tissue. 248 8 MED Tendonitis, myositis and 0.7325 0.7428 1.4 bursitis. 249 8 MED Aftercare, musculoskeletal 0.6522 0.6559 0.6 system and connective tissue. 250 8 MED FX, sprn, strn and disl of 0.6915 0.6995 1.2 forearm, hand, foot age >17 with CC. 251 8 MED FX, sprn, strn and disl of 0.4640 0.4517 -2.7 forearm, hand, foot age >17 without CC. 252 8 MED \1\ FX, sprn, strn and disl of 0.2479 0.2520 1.7 forearm, hand, foot age 0-17. 253 8 MED FX, sprn, strn and disl of 0.7438 0.7265 -2.3 uparm, lowleg ex foot age >17 with CC. 254 8 MED FX, sprn, strn, and disl of 0.4451 0.4350 -2.3 uparm, lowleg ex foot age >17 without CC. 255 8 MED \1\ FX, sprn, strn and disl of 0.2886 0.2934 1.7 uparm, lowleg ex foot age 0-17. 256 8 MED Other musculoskeletal system 0.7651 0.7826 2.3 and connective tissue diagnoses. 257 9 SURG Total mastectomy for malignancy 0.9015 0.9276 2.9 with CC. 258 9 SURG Total mastectomy for malignancy 0.7087 0.7162 1.1 without CC. 259 9 SURG Subtotal mastectomy for 0.8640 0.8874 2.7 malignancy with CC. 260 9 SURG Subtotal mastectomy for 0.6083 0.6092 0.1 malignancy without CC. 261 9 SURG Breast proc for nonmalignancy 0.8286 0.8961 8.1 except biopsy and local excision. 262 9 SURG Breast biopsy and local 0.7695 0.7820 1.6 excision for nonmalignancy. 263 9 SURG Skin graft and/or debrid for 2.1226 2.0221 -4.7 skn ulcer or cellulitis with CC. 264 9 SURG Skin graft and/or debrid for 1.1270 1.0773 -4.4 skin ulcer or cellulitis without CC. 265 9 SURG Skin graft and/or debrid except 1.4993 1.5166 1.2 skin ulcer or cellulitis with CC. 266 9 SURG Skin graft and/or debrid except 0.7629 0.7909 3.7 for skin ulcer or cellulitis without CC. 267 9 SURG Perianal and pilonidal 0.8330 0.8424 1.1 procedures. 268 9 SURG Skin, subcutaneous tissue and 0.9916 1.0090 1.8 breast plastic procedures. 269 9 SURG Other skin, subcut tiss and 1.6416 1.5733 -4.2 breast proc with CC. 270 9 SURG Other skin, subcut tiss and 0.7003 0.7061 0.8 breast proc without CC. 271 9 MED Skin ulcers.................... 1.0816 1.0259 -5.1 272 9 MED Major skin disorders with CC... 1.0158 0.9950 -2.0 273 9 MED Major skin disorders without CC 0.6346 0.6618 4.3 274 9 MED Malignant breast disorders with 1.0760 1.1229 4.4 CC. 275 9 MED Malignant breast disorders 0.5085 0.5882 15.7 without CC. 276 9 MED Nonmalignant breast disorders.. 0.6374 0.6122 -4.0 277 9 MED Cellulitis age >17 with CC..... 0.8526 0.8322 -2.4 278 9 MED Cellulitis age >17 without CC.. 0.5774 0.5574 -3.5 279 9 MED \1\ Cellulitis age 0-17............ 0.7190 0.7309 1.7 280 9 MED Trauma to the skin subcut tiss 0.6750 0.6757 0.1 & breast age >17 with CC. 281 9 MED Trauma to the skin subcut tiss 0.4560 0.4558 0.0 & breast age >17 without CC. 282 9 MED \1\ Trauma to the skin subcut tiss 0.2509 0.2551 1.7 & breast age 0-17. 283 9 MED Minor skin disorders with CC... 0.6990 0.6936 -0.8 284 9 MED Minor skin disorders without CC 0.4340 0.4371 0.7 285 10 SURG Amputat of lower limb for 2.2015 2.1556 -2.1 endocrine, nutrit and metabol disorders. 286 10 SURG Adrenal and pituitary 2.3775 2.2671 -4.6 procedures. 287 10 SURG Skin grafts and wound debrid 1.9765 1.8727 -5.3 for endoc, nutrit and metab disorders. 288 10 SURG O.R. procedures for obesity.... 2.0104 2.0255 0.8 289 10 SURG Parathyroid procedures......... 1.0198 0.9827 -3.6 290 10 SURG Thyroid procedures............. 0.8798 0.8970 2.0 291 10 SURG Thyroglossal procedures........ 0.5189 0.7372 42.1 292 10 SURG Other endocrine, nutrit and 2.6450 2.5483 -3.7 metab. O.R. proc with CC. 293 10 SURG Other endocrine, nutrit and 1.2671 1.2297 -3.0 metab. O.R. proc without CC. 294 10 MED Diabetes age >35............... 0.7594 0.7546 -0.6 295 10 MED Diabetes age 0-35.............. 0.7159 0.7359 2.8 296 10 MED Nutritional and misc metabolic 0.8929 0.8657 -3.0 disorders age >17 with CC. 297 10 MED Nutritional and misc metabolic 0.5364 0.5188 -3.3 disorders age >17 without CC. 298 10 MED Nutritional and misc metabolic 0.5221 0.4207 -19.4 disorders age age 0-17. 299 10 MED Inborn errors of metabolism.... 0.8330 0.8716 4.6 300 10 MED Endocrine disorders with CC.... 1.0950 1.0810 -1.3 301 10 MED Endocrine disorders without CC. 0.6182 0.5941 -3.9 302 11 SURG Kidney transplant.............. 3.9047 3.7570 -3.8 303 11 SURG Kidney, ureter and major 2.6409 2.6139 -1.0 bladder procedures for neoplasm. 304 11 SURG Kidney, ureter and major 2.3716 2.3982 1.1 bladder procedures for nonneopl with CC. 305 11 SURG Kidney, ureter and major 1.1776 1.1695 -0.7 bladder procedures for nonneopl without CC. 306 11 SURG Prostatectomy with CC.......... 1.2258 1.2168 -0.7 307 11 SURG Prostatectomy without CC....... 0.6708 0.6455 -3.8 308 11 SURG Minor bladder procedures with 1.5252 1.5120 -0.9 CC. 309 11 SURG Minor bladder procedures 0.8860 0.8760 -1.1 without CC. 310 11 SURG Transurethral procedures with 1.0015 1.0248 2.3 CC. 311 11 SURG Transurethral procedures 0.5670 0.5866 3.5 without CC. 312 11 SURG Urethral procedures age >17 0.9124 0.9732 6.7 with CC. 313 11 SURG Urethral procedures age >17 0.5223 0.5783 10.7 without CC. 314 11 SURG \1\ Urethral procedures age 0-17... 0.4836 0.4916 1.7 315 11 SURG Other kidney and urinary tract 2.0574 2.0601 0.1 O.R. procedures. 316 11 MED Renal failure.................. 1.3034 1.3089 0.4 317 11 MED Admit for renal dialysis....... 0.4845 0.5489 13.3 318 11 MED Kidney and urinary tract 1.1296 1.1594 2.6 neoplasms with CC. 319 11 MED Kidney and urinary tract 0.5772 0.5808 0.6 neoplasms without CC. 320 11 MED Kidney and urinary tract 0.9048 0.8782 -2.9 infections age 17W CC. 321 11 MED Kidney and urinary tract 0.6077 0.5838 -3.9 infections age >17 without CC. 322 11 MED Kidney and urinary tract 0.5133 0.5342 4.1 infections age 0-17. 323 11 MED Urinary stones with CC, and/or 0.7496 0.7555 0.8 ESW lithotripsy. 324 11 MED Urinary stones without CC...... 0.4159 0.4298 3.3 325 11 MED Kidney and urinary tract signs 0.6377 0.6207 -2.7 and symptoms age >17 with CC. 326 11 MED Kidney and urinary tract signs 0.4320 0.4188 -3.1 and symptoms age >17 without CC. 327 11 MED Kidney and urinary tract signs 0.2341 0.3516 50.2 and symptoms age 0-17. 328 11 MED Urethral stricture age >17 with 0.6886 0.6878 -0.1 CC. 329 11 MED Urethral stricture age >17 0.4567 0.5080 11.2 without CC. 330 11 MED \1\ Urethral stricture age 0-17.... 0.3115 0.3167 1.7 331 11 MED Other kidney and urinary tract 0.9914 1.0009 1.0 diagnoses age >17 with CC. 332 11 MED Other kidney and urinary tract 0.6070 0.5964 -1.7 diagnoses age >17 without CC. 333 11 MED Other kidney and urinary tract 0.8562 0.8389 -2.0 diagnoses age 0-17. 334 12 SURG Major male pelvic procedures 1.6653 1.6359 -1.8 with CC. 335 12 SURG Major male pelvic procedures 1.2610 1.2190 -3.3 without CC. 336 12 SURG Transurethral prostatectomy 0.8848 0.8870 0.2 with CC. 337 12 SURG Transurethral prostatectomy 0.6147 0.6129 -0.3 without CC. 338 12 SURG Testes procedures, for 1.0499 1.0950 4.3 malignancy. 339 12 SURG Testes procedures, 1.0194 1.0038 -1.5 nonmalignancy age >17. 340 12 SURG \1\ Testes procedures, 0.2769 0.2815 1.7 nonmalignancy age 0-17. 341 12 SURG Penis procedures............... 1.0745 1.1089 3.2 342 12 SURG Circumcision age >17........... 0.7578 0.8511 12.3 343 12 SURG \1\ Circumcision age 0-17.......... 0.1504 0.1529 1.7 344 12 SURG Other male reproductive system 1.0083 1.0298 2.1 O.R. procedures for malignancy. 345 12 SURG Other male reproductive system 0.8422 0.8552 1.5 O.R. proc except for malignancy. 346 12 MED Malignancy, male reproductive 0.9559 0.9573 0.1 system, with CC. 347 12 MED Malignancy, male reproductive 0.5096 0.4603 -9.7 system, without CC. 348 12 MED Benign prostatic hypertrophy 0.7107 0.6958 -2.1 with CC. 349 12 MED Benign prostatic hypertrophy 0.3974 0.4154 4.5 without CC. 350 12 MED Inflammation of the male 0.6611 0.6797 2.8 reproductive system. 351 12 MED \1\ Sterilization, male............ 0.2309 0.2347 1.6 352 12 MED Other male reproductive system 0.5877 0.6263 6.6 diagnoses. 353 13 SURG Pelvic evisceration, radical 1.9174 2.1179 10.5 hysterectomy and radical vulvectomy. 354 13 SURG Uterine, adnexa proc for 1.4643 1.4963 2.2 nonovarian/adnexal malig with CC. 355 13 SURG Uterine, adnexa proc for 0.9056 0.9180 1.4 nonovarian/adnexal malig without CC. 356 13 SURG Female reproductive system 0.7376 0.7701 4.4 reconstructive procedures. 357 13 SURG Uterine and adnexa proc for 2.3824 2.4309 2.0 ovarian or adnexal malignancy. 358 13 SURG Uterine and adnexa proc for 1.1713 1.2021 2.6 nonmalignancy with CC. 359 13 SURG Uterine and adnexa proc for 0.8285 0.8452 2.0 nonmalignancy without CC. 360 13 SURG Vagina, cervix and vulva 0.8459 0.8708 2.9 procedures. 361 13 SURG Laparoscopy and incisional 1.1148 1.1872 6.5 tubal interrruption. 362 13 SURG \1\ Endoscopic tubal interruption.. 0.2951 0.3000 1.7 363 13 SURG D&C, conization and radio- 0.6911 0.7485 8.3 implant for malignancy. 364 13 SURG D&C, conization except for 0.6739 0.6985 3.7 malignancy. 365 13 SURG Other female reproductive 1.7237 1.7085 -0.9 system O.R. procedures. 366 13 MED Malignancy, female reproductive 1.1941 1.1857 -0.7 system with CC. 367 13 MED Malignancy, female reproductive 0.5216 0.5309 1.8 system without CC. 368 13 MED Infections, female reproductive 1.0230 0.9698 -5.2 system. 369 13 MED Menstrual and other female 0.5454 0.5367 -1.6 reproductive system disorders. 370 14 SURG Cesarean section with CC....... 1.0401 1.0587 1.8 371 14 SURG Cesarean section without CC.... 0.6838 0.7054 3.2 372 14 MED Vaginal delivery with 0.5439 0.5590 2.8 complicating diagnoses. 373 14 MED Vaginal delivery without 0.3602 0.3987 10.7 complicating diagnoses. 374 14 SURG Vaginal delivery with 0.6775 0.7625 12.5 sterilization and diagnoses and/or D&C. 375 14 SURG \1\ Vaginal delivery with O.R. proc 0.6698 0.6809 1.7 except steril and/or D&C. 376 14 MED Postpartum and post abortion 0.5638 0.4822 -14.5 diagnoses without O.R. procedure. 377 14 SURG Postpartum and post abortion 0.8188 1.0517 28.4 diagnosis with O.R. procedure. 378 14 MED Ectopic pregnancy.............. 0.8054 0.8126 0.9 379 14 MED Threatened abortion............ 0.3591 0.4028 12.2 380 14 MED Abortion without D&C........... 0.4775 0.3501 -26.7 381 14 SURG Abortion with D&C, aspiration 0.5151 0.4809 -6.6 curettage or hysterotomy. 382 14 MED False labor.................... 0.2013 0.2086 3.6 383 14 MED Other antepartum diagnosis with 0.4655 0.4636 -0.4 medical complications. 384 14 MED Other antepartum diagnosis 0.3921 0.3539 -9.7 without medical complications. 385 15 (\1\) Neonates, died or transferred 1.3443 1.3665 1.7 to another acute care facility. 386 15 (\1\) Extreme immaturity or 4.4329 4.5063 1.7 respiratory distress syndrome, neonate. 387 15 (\1\) Prematurity with major problems 3.0276 3.0777 1.7 388 15 (\1\) Prematurity without major 1.8268 1.8570 1.7 problems. 389 15 ..................... Full term neonate with major 2.2451 1.4862 -33.8 problems. 390 15 (\1\) Neonate with other significant 1.2845 1.3058 1.7 problems. 391 15 (\1\) Normal newborn................. 0.1490 0.1515 1.7 392 16 SURG Splenectomy age >17............ 3.2443 3.1695 -2.3 393 16 SURG \1\ Splenectomy age 0-17........... 1.3168 1.3386 1.7 394 16 SURG Other O.R. procedures of the 1.5994 1.6479 3.0 blood and blood forming organs. 395 16 MED Red blood cell disorders age 0.8362 0.8181 -2.2 >17. 396 16 MED Red blood cell disorders age 0- 0.6966 0.6284 -9.8 17. 397 16 MED Coagulation disorders.......... 1.2612 1.2679 0.5 398 16 MED Reticuloendothelial and 1.2106 1.2242 1.1 immunity disorders with CC. 399 16 MED Reticuloendothelial and 0.7030 0.6836 -2.8 immunity disorders without CC. 400 17 SURG Lymphoma and leukemia with 2.5572 2.6402 3.2 major O.R. procedure. 401 17 SURG Lymphoma and nonacute leukemia 2.4834 2.5653 3.3 with other O.R. proc with CC. 402 17 SURG Lymphoma and nonacute leukemia 1.0255 1.0145 -1.1 with other O.R. proc without CC. 403 17 MED Lymphoma and nonacute leukemia 1.6925 1.6964 0.2 with CC. 404 17 MED Lymphoma and nonacute leukemia 0.8059 0.7917 -1.8 without CC. 405 17 (\1\) Acute leukemia without major 1.8669 1.8978 1.7 O.R. procedure age 0-17. 406 17 SURG Myeloprolif disord or poorly 2.6841 2.6147 -2.6 diff neopl with maj O.R. proc with CC. 407 17 SURG Myeloprolif disord or poorly 1.1787 1.1516 -2.3 diff neopl with maj O.R. proc without CC. 408 17 SURG Myeloprolif disord or poorly 1.7393 1.7294 -0.6 diff neopl with other O.R. proc. 409 17 MED Radiotherapy................... 0.9763 0.9534 -2.3 410 17 MED Chemotherapy without acute 0.7514 0.7968 6.0 leukemia as secondary diagnosis. 411 17 MED History of malignancy without 0.3837 0.4214 9.8 endoscopy. 412 17 MED History of malignancy with 0.4080 0.5175 26.8 endoscopy. 413 17 MED Other myeloprolif dis or poorly 1.3257 1.3777 3.9 diff neopl diag with CC. 414 17 MED Other myeloprolif dis or poorly 0.7337 0.7041 -4.0 diff neopl diag without CC. 415 18 SURG O.R. procedure for infectious 3.4430 3.5166 2.1 and parasitic diseases. 416 18 MED Septicemia age >17............. 1.4838 1.4797 -0.3 417 18 MED Septicemia age 0-17............ 0.8089 0.7688 -5.0 418 18 MED Postoperative and post- 0.9697 0.9679 -0.2 traumatic infections. 419 18 MED Fever of unknown origin age >17 0.8991 0.8831 -1.8 with CC. 420 18 MED Fever of unknown origin age >17 0.6264 0.6064 -3.2 without CC. 421 18 MED Viral illness age >17.......... 0.7153 0.7069 -1.2 422 18 MED Viral illness and fever of 0.5347 0.5347 0.0 unknown origin age 0-17. 423 18 MED Other infectious and parasitic 1.5947 1.5690 -1.6 diseases diagnoses. 424 19 SURG O.R. procedure with principal 2.3637 2.4581 4.0 diagnoses of mental illness. 425 19 MED Acute adjust react and 0.7051 0.6857 -2.8 disturbances of psychosocial dysfunction. 426 19 MED Depressive neuroses............ 0.5680 0.5648 -0.6 427 19 MED Neuroses except depressive..... 0.5495 0.5818 5.9 428 19 MED Disorders of personality and 0.7303 0.6975 -4.5 impulse control. 429 19 MED Organic disturbances and mental 0.9075 0.8728 -3.8 retardation. 430 19 MED Psychoses...................... 0.8391 0.8073 -3.8 431 19 MED Childhood mental disorders..... 0.6556 0.8371 27.7 432 19 MED Other mental disorder diagnoses 0.7363 0.7647 3.9 433 20 ..................... Alcohol/drug abuse or 0.2986 0.3053 2.2 dependence, left AMA. 434 20 ..................... Alc/drug abuse or depend, detox 0.7141 0.6865 -3.9 or oth sympt treat with CC. 435 20 ..................... Alc/drug abuse or depend, detox 0.4164 0.4015 -3.6 or oth sympt treat without CC. 436 20 ..................... Alc/drug dependence with 0.8183 0.8110 -0.9 rehabilitation therapy. 437 20 ..................... Alc/drug dependence, combined 0.7657 0.7343 -4.1 rehab and detox therapy. 438 ..... ..................... No longer valid................ .......... .......... .......... 439 21 SURG Skin grafts for injuries....... 1.6144 1.6391 1.5 440 21 SURG Wound debridements for injuries 1.7725 1.8456 4.1 441 21 SURG Hand procedures for injuries... 0.9294 0.9298 0.0 442 21 SURG Other O.R. procedures for 2.1653 2.1818 0.8 injuries with CC. 443 21 SURG Other O.R. procedures for 0.8849 0.9116 3.0 injuries without CC. 444 21 MED Traumatic injury age >17 with 0.7312 0.7007 -4.2 CC. 445 21 MED Traumatic injury age >17 0.4845 0.4842 -0.1 without CC. 446 21 MED \1\ Traumatic injury age 0-17...... 0.2894 0.2942 1.7 447 21 MED Allergic reactions age >17..... 0.4918 0.4927 0.2 448 21 MED Allergic reactions age 0-17.... 0.0777 0.0968 24.6 449 21 MED Poisoning and toxic effects of 0.7902 0.7860 -0.5 drugs age >17 with CC. 450 21 MED Poisoning and toxic effects of 0.4274 0.4406 3.1 drugs age >17 without CC. 451 21 MED \1\ Poisoning and toxic effects of 0.2570 0.2613 1.7 drugs age 0-17. 452 21 MED Complications of treatment with 0.9473 0.9476 0.0 CC. 453 21 MED Complications of treatment 0.4822 0.4960 2.9 without CC. 454 21 MED Other injury, poisoning and 0.8575 0.9035 5.4 toxic effect diag with CC. 455 21 MED Other injury, poisoning and 0.4467 0.4453 -0.3 toxic effect diag without CC. 456 22 ..................... Burns, transferred to another 1.8327 1.7396 -5.1 acute care facility. 457 22 MED Extensive burns without O.R. 1.4657 1.5860 8.2 procedure. 458 22 SURG Nonextensive burns with skin 3.4991 3.5746 2.2 graft. 459 22 SURG Nonextensive burns with wound 1.6538 1.5588 -5.7 debridement or other O.R. proc. 460 22 MED Nonextensive burns without O.R. 0.9547 0.9421 -1.3 procedure. 461 23 SURG O.R. proc with diagnoses of 0.9963 1.0123 1.6 other contact with health services. 462 23 MED Rehabilitation................. 1.4298 1.4041 -1.8 463 23 MED Signs and symptoms with CC..... 0.7101 0.6907 -2.7 464 23 MED Signs and symptoms without CC.. 0.5028 0.4872 -3.1 465 23 MED Aftercare with history of 0.5571 0.5858 5.2 malignancy as secondary diagnosis. 466 23 MED Aftercare without history of 0.5905 0.6336 7.3 malignancy as secondary diagnosis. 467 23 MED Other factors influencing 0.4588 0.4669 1.8 health status. 468 ..... ..................... Extensive O.R. procedure 3.6028 3.6202 0.5 unrelated to principal diagnosis. 469 ..... (\2\) Principal diagnosis invalid as .......... .......... .......... discharge diagnosis. 470 ..... (\2\) Ungroupable.................... .......... .......... .......... 471 8 SURG Bilateral or multiple major 3.5980 3.4771 -3.4 joint procs of lower extremity. 472 22 SURG Extensive burns with O.R. 10.9989 10.2429 -6.9 procedure. 473 17 ..................... Acute leukemia without major 3.5740 3.4853 -2.5 O.R. procedure age >17. 474 ..... ..................... No longer valid................ .......... .......... .......... 475 4 MED Respiratory system diagnosis 3.6765 3.7291 1.4 with ventilator support. 476 ..... SURG Prostatic O.R. procedure 2.2479 2.2234 -1.1 unrelated to principal diagnosis. 477 ..... SURG Nonextensive O.R. procedure 1.7266 1.7461 1.1 unrelated to principal diagnosis. 478 5 SURG Other vascular procedures with 2.2883 2.2981 0.4 CC. 479 5 SURG Other vascular procedures 1.4080 1.4113 0.2 without CC. 480 ..... SURG Liver transplant............... 13.9424 11.4672 -17.8 481 ..... SURG Bone marrow transplant......... 11.2299 11.2821 0.5 482 ..... SURG Tracheostomy for face, mouth 3.6578 3.5999 -1.6 and neck diagnoses. 483 ..... SURG Tracheostomy except for face, 16.0413 16.0451 0.0 mouth and neck diagnoses. 484 24 SURG Craniotomy for multiple 5.6821 5.7762 1.7 significant trauma. 485 24 SURG Limb reattachment, hip and 3.2058 3.1562 -1.5 femur proc for multiple significant TR. 486 24 SURG Other O.R. procedures for 4.7915 4.8882 2.0 multiple significant trauma. 487 24 MED Other multiple significant 2.0305 2.0229 -0.4 trauma. 488 25 SURG HIV with extensive O.R. 4.7905 4.5078 -5.9 procedure. 489 25 MED HIV with major related 1.8141 1.8009 -0.7 condition. 490 25 MED HIV with or without other 1.0116 0.9952 -1.6 related condition. 491 8 SURG Major joint and limb 1.6308 1.6579 1.7 reattachment procedures of upper extremity. 492 17 MED Chemotherapy with acute 4.0299 4.6393 15.1 leukemia as secondary diagnosis. 493 7 SURG Laparoscopic cholecystectomy 1.7100 1.7561 2.7 without C.D.E. with CC. 494 7 SURG Laparoscopic cholecystectomy 0.9169 0.9400 2.5 without C.D.E. without CC. 495 ..... SURG Lung transplant................ 9.2870 9.5171 2.5 496 8 SURG Combined anterior/posterior .......... 5.5214 .......... spinal fusion. 497 8 SURG Spinal fusion with CC.......... .......... 2.7692 .......... 498 8 SURG Spinal fusion without CC....... .......... 1.6171 .......... 499 8 SURG Back and neck procs except .......... 1.4827 .......... spinal fusion with CC. 500 8 SURG Back and neck procs except .......... 0.9708 .......... spinal fusion without CC. 501 8 SURG Knee proc with pdx of infection .......... 2.5660 .......... with CC. 502 8 SURG Knee proc with pdx of infection .......... 1.6004 .......... without CC. 503 8 SURG Knee procedures without pdx of .......... 1.2380 .......... infection. ---------------------------------------------------------------------------------------------------------------- \1\ Medicare data for low-volume DRGs have been supplemented by data for non-Medicare patients from 19 States. \2\ DRGs 469 and 470 contain cases that could not be assigned to valid DRGs. Note.--Abbreviations are as follows: aicd = automatic D&C = dilation & curettage gastroent = nutrit = nutritional implantable cardioverter debrid = debridement gastroenteritis OR = operating room defibrillator detox = detoxification G.I. = gastrointestinal pdx = principal diagnosis alc hepa = alcoholic diag. = diagnosis HIV = human proc = procedures hepatitis diff = differentiated immunodeficiency virus sprn = sprain AMA = against medical digest = digestive HR = hour strn = strain advice dis = diseases humer = humerus subcut = subcutaneous ami = anterior myocardial disch = discharge int = internal surg = surgical infarction disl = dislocation lowleg = lower leg syst = system amputat = amputation disord = disorder malig = malignancy T&A = tonsillectomy and/or cath = catheterization endoc = endocrine MDC = major diagnostic adenoidectomy CC = complication or ESW = extracorporeal shock category TIA = transient ischemic comorbidity wave med = medical attack C.D.E. = common duct extrem = extremity metabol = metabolic TR = trauma exploration fix = fixation muscskelet = uparm = upper arm cholecyst = cholecystectomy FX = fracture musculoskeletal WND = wound circ = circulatory myeloprolif = cirr = cirrhosis myeloproliferative comp = complication neopl = neoplasm conn = connective nonneopl = nonneoplasm c.v. = cardiovascular Source: Health Care Financing Administration. REFERENCES Prospective Payment Assessment Commission. (1997, March). Report and recommendations to the Secretary. Washington, DC. Prospective Payment Assessment Commission. (1997, June). Medicare prospective payment and the American health care system. Washington, DC. Federal Register. Medicare program; Changes to the hospital inpatient prospective payment systems and fiscal year 1998 rates, 62(168), pp. 45966-6140.