IPPS changes affect hospital compliance, reimbursement

CMS implemented new hospital inpatient prospective payment system (IPPS) rules in October 2007 in an effort to improve the accuracy of Medicare payments and enhance quality-improvement efforts.

The new system represents a major change in the capturing of complications and comorbidities (CC) via coding.

"Hospital finance and reimbursement specialists need to understand the impact that the IPPS changes will have on the entire system," says Gloryanne Bryant, RHIA, RHIT, CCS, corporate senior director of Coding HIM Compliance for Catholic Healthcare West in San Francisco.

The IPPS change created 745 new severity-adjusted DRGs (Medicare Severity DRGs, also known as MS-DRGs) to replace the previous 538 DRGs. It revises the CC list of ICD-9-CM codes.