CMS issues multiple corrections to IPPS final rule due to incorrect calculations

October 9, 2017
Medicare Web

On October 4, CMS issued a notice in the Federal Register containing numerous corrections to the 2018 IPPS final rule, including significant recalculations of MS-DRG relative weights and all budget neutrality factors.

CMS stated that there were several technical errors made regarding calculation of Factor 3 of the uncompensated care payment methodology, which is used to determine the total amount of uncompensated care payments a hospital receives per fiscal year. This number is used to help calculate all budget neutrality factors within the rule as well as the final outlier threshold. CMS also used incorrect wage data from Medicare cost reports from six hospitals to determine wage indexes. As a result, CMS was forced to recalculate the following for the 2018 fiscal year:

  • all budget neutrality adjustment factors
  • capital federal rate
  • final wage indexes
  • fixed-loss cost threshold
  • geographic adjustment factors
  • national average hourly wages
  • national operating standardized amounts

CMS also revised a list of 28 ICD-10-PCS codes describing procedures involving the percutaneous insertion of intraluminal and monitoring devices into central nervous system and other cardiovascular body parts. Ten of the 28 codes were duplicative and were included erroneously, and three of those codes received a change in destination. 

The full CMS notice containing all changes can be found here. An updated version of the MS-DRG Definitions Manual files can be found here