Recalibrating Medicare Payments for Inpatient Care

On August 1, 2006, the Centers for Medicare and Medicaid Services (CMS) took a small but important step toward improving the accuracy of Medicare payment rates for inpatient hospital care. Some media accounts downplayed the move, noting that the final changes to the payment rates were much more modest than those proposed in April. Nonetheless, the final rule starts a process that — if it is followed through in 2007 and 2008 — could lead to the most important modifications since Medicare instituted the inpatient prospective payment system more than 20 years ago. The changes are meant to better align . . .