title: Medicare program; Medicare hospital reimbursement reforms: limitations on reimbursable costs and the rate of hospital cost increases--HCFA. Interim final rule with comment period.
abstract: These rules implement section 1886 of the Social Security Act (established by section 101 of the Tax Equity and Fiscal Responsibility Act of 1982). These rules amend current regulations on hospital cost limits, providing for new exemptions and exceptions. These amendments make exceptions available to hospitals consistent with the new cost limits published elsewhere in this issue of the Federal Register, and specifically exempt from those cost limits rural hospitals with less than 50 beds in existence as of the enactment of the law. These rules also set forth new regulations establishing a three-year ceiling on the allowable annual rate of increase in operating costs per case for inpatient hospital services. This ceiling takes the form of a target amount of cost per case against which a hospital's incurred cost per case will be compared. Hospitals are provided incentives to keep their cost increases below the target rate. A hospital that has costs per case less than the target amount will be paid a portion of the difference between actual cost and the target amount. A hospital that has costs per case that are greater than the target amount will be paid the target amount plus 25 percent of its costs in excess of the target for the first two years of the ceiling, and none of the excess in the third year. However, payment to a hospital under these new target rate regulations will not be greater than the amount determined under the new schedule of limits on hospital inpatient operating costs published elsewhere in this issue of the Federal Register.
mesh_terms: D003365:Costs and Cost Analysis; D003953:Diagnosis-Related Groups; D006761:Hospitals; D006278:Medicare / Q000331:legislation & jurisprudence*; D011445:Prospective Payment System / Q000331:legislation & jurisprudence*; D011907:Rate Setting and Review / Q000331:legislation & jurisprudence*; D012051:Reimbursement Mechanisms / Q000331:legislation & jurisprudence*; D014481:United States