The U.S. Health Care Financing Administration (HCFA) published its final rule for FY 2001 Medicare hospital inpatient reimbursement rates in the Federal Register on August 1. The significant payment parameters, including a new cut in direct graduate medical education (DGME) payments made on behalf of Medicare+Choice enrollees, appear below.
Wage Indices: The wage index for the New York, NY metropolitan statistical area (MSA) increased from 1.4517 in FY 2000 to 1.4651 in the FY 2001 final rule, while the wage index for the Nassau-Suffolk MSA decreased slightly from 1.4074 in FY 2000 to 1.3932 in FY 2001.
DGME: FY 2000 per resident amounts (PRAs) below the FY 2001 minimum will be increased to the minimum; FY 2000 PRAs above the FY 2001 high-end threshold will not be increased for inflation in FY 2001; and FY 2000 PRAs between the minimum and the high-end threshold will increase by the urban consumer price index in FY 2001. Comparisons will be made separately for hospital-specific primary care and non-primary care PRAs.
GME Payments and Medicare+Choice: For FY 2001, indirect medical education (IME) and DGME payments increase to 80% of the fee-for-service equivalents. In addition, the Balanced Budget Refinement Act of 1999 required HCFA to reduce DGME payments to finance payments to hospitals operating nursing schools and paramedical training programs. For calendar year 2000, the cut will be 10.5%, or $26 million. GNYHA estimates that NYS hospitals will lose $2.9 million in aggregate from this provision, of which $2.7 million will come from GNYHA member hospitals.
Hospitals with Nursing Schools and Paramedical Training: The $26 million financed by a cut in DGME payments associated with Medicare+Choice enrollees will go to hospitals based on each one's share of total U.S. expenditures on nursing schools and paramedical training programs. The distribution is not based on the hospitals' volume of patients in a Medicare+Choice plan, although the impetus for the distribution is the assumption that hospitals have lost part of their pass-through payments because of the Medicare+Choice program. GNYHA estimates that NYS hospitals will get $2.4 million in aggregate from this provision, of which $1.1 million will accrue to GNYHA hospitals.
| Proposed FY 2001 Medicare Inpatient Payment Parameters |
FY 2001 |
| |
FY 2000 |
Proposed |
Final |
| Prospective Payment System |
Operating PPS
Standardized amount, large urban areas |
| Labor portion |
$2,809.18 |
$2,856.71 |
$2,864.19 |
| Nonlabor portion |
$1,141.85 |
$1,161.17 |
$1,164.21 |
| Total |
$3,951.03 |
$4,017.88 |
$4,028.40 |
| Wage index |
| New York, NY MSA |
1.4517 |
1.4445 |
1.4651 |
| Nassau-Suffolk MSA |
1.4074 |
1.3089 |
1.3932 |
| IME adjustment |
6.5 |
6.24 |
6.24 |
| DSH adjustment cut* |
3% |
3% |
3% |
| Capital PPS |
| Standardized amount |
$377.03 |
$383.06 |
$382.03 |
| Geographic adjustment factor |
|
|
|
| New York, NY MSA |
1.2908 |
1.2864 |
1.2989 |
| Nassau-Suffolk MSA |
1.2637 |
1.2024 |
1.2549 |
Outliers
Threshold |
| U.S. |
$14,050 |
$17,250 |
$17,550 |
| New York, NY MSA |
$18,562 |
$22,702 |
$23,354 |
| Nassau-Suffolk MSA |
$18,120 |
$21,039 |
$22,456 |
| Psychiatric |
| |
|
|
|
| U.S. |
$10,989 |
$11,329 |
$11,364 |
| New York, NY MSA |
$14,541 |
$14,932 |
$15,146 |
| Nassau-Suffolk MSA |
$14,192 |
$13,833 |
$14,561 |
| Rehabilitation |
| U.S. |
$20,497 |
$21,115 |
$21,193 |
| |
|
|
|
| Nassau-Suffolk MSA |
$26,472 |
$25,782 |
$27,155 |
| DGME Per Resident Amounts for FY 2001 |
| U.S. Average |
Minimum=70% |
Mean |
High-end
Threshold=140% |
| $53,215 |
$76,021 |
$106,430 |
| Manhattan |
$65,295 |
$93,278 |
$130,589 |
| Queens |
$62,102 |
$88,717 |
$124,204 |
| Other NYC counties, Long Island, and northern suburbs |
$62,634 |
$89,477 |
$125,268 |