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Payment Reform Reality

The Centers for Medicare and Medicaid Services today made good on its promise to significantly change the way Medicare pays for acute inpatient care at hospitals. The final rule for the inpatient prospective payment system creates 745 new Medicare severity-adjusted diagnosis-related groups. CMS says the reforms will result in increased payments overall and fairer reimbursement for more than 3,500 acute care hospitals. Providers I spoke with after the proposed rule came out were leery of the changes that CMS claims will increase hospital payments by an average of 3.5 percent for FY 2008.
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