One in every five Medicare beneficiaries is hospitalized one or more times each year. There are almost 5,000 inpatient acute-care hospitals nationwide that treat these beneficiaries. Of the approximately $300 billion dollars spent on the Medicare program each year, almost $100 billion is spent on inpatient services.
Over three-quarters of these hospitals are paid under the inpatient prospective payment system (IPPS), while nearly one quarter are paid based on costs and are called Critical Access Hospitals. The IPPS pays a flat rate based on the average charges across all hospitals for a specific diagnosis regardless of whether that particular patient costs more or less. Everything from an aspirin to an artificial hip is included in the package price to the hospital.
Under the IPPS, each case is categorized into a diagnosis-related group (DRG) to determine the base rate. Payment is also adjusted for differences in area wage costs -- and depending on the hospital and case -- teaching status, high percentage of low-income patients, the use of new technology and extremely costly cases.
This site contains member advisories, comment letters, and other educational tools to help you learn more about the IPPS.
- Sep 21, 2016 | House passes bill providing relief from 25% Rule
- Sep 8, 2016 | Reminder: Deadline to submit Worksheet S-10 revisions for FY 2014 cost report
- Sep 6, 2016 | AHA voices support for bill providing relief from 25% Rule
- Aug 24, 2016 | Deadline approaching to review Medicare DSH uncompensated care estimates
- Aug 22, 2016 | CMS: ICD-10 claims auditing/quality reporting flexibility expires Oct. 1
- Aug 10, 2016 | CMS: Comments on updated MOON due by Sept. 1
- Aug 2, 2016 | CMS issues inpatient PPS final rule for FY 2017
- Aug 2, 2016 | CMS issues LTCH PPS final rule for FY 2017
- Aug 2, 2016 | GAO: CMS should better align hospital uncompensated care payments with costs
- Jul 28, 2016 | CMS issues FY 2017 payment update for inpatient psychiatric facilities
- Aug 30, 2016 | AHA Comments to OMB on the Updated Medicare Outpatient Observation Notice (MOON)
- Aug 24, 2016 | Medicare Inpatient PPS: The Final Rule for FY 2017
- Aug 03, 2016 | CMS Releases FY 2017 Hospital Inpatient PPS Final Rule
- Aug 02, 2016 | Statement on Final FY 2017 Inpatient and LTCH Rule
- Jun 17, 2016 | AHA Comments on to CMS Re: Hospital IPPS Proposed Rule for FY 2017
- May 13, 2016 | Medicare Inpatient PPS: The Proposed Rule for FY 2017
- Apr 19, 2016 | CMS Issues Inpatient PPS (IPPS) Proposed Rule for FY 2017
- Feb 02, 2016 | AHA comments on CMS's Dec. 1, 2015 Notice about 0.2 percent reduction to Hospital IPPS payments
- Jan 11, 2016 | AHA Comments to MedPAC on draft payment recommendations for FY 2017
- Sep 22, 2015 | Court Sides with Hospitals: CMS Unlawfully Imposed 0.2% 'Two-midnight' Cut