Final Inpatient PPS Rule Increases Access to High Quality Hospital Care Through Financial Relief to Hospitals

August 5, 2004

Final Inpatient PPS Rule Increases Access to High Quality Hospital Care Through Financial Relief to Hospitals

The Centers for Medicare and Medicaid Services (CMS) issued the FY 2005 hospital inpatient prospective payment system (PPS) regulation, which provides for greater access to high-quality care in USA hospitals. The final rule increases payments to acute care hospitals, provides financial relief to rural hospitals, and, for the first time in the history of the Medicare program, creates a link between the quality of services to Medicare beneficiaries and payment for those services.

Under the final rule, the combined impact of the inflation update and other proposed changes will yield an average 5.7 percent increase in payments for urban hospitals in fiscal year 2005, while rural hospitals will see an average increase of 6.2 percent. In FY 2005, Medicare payments to approximately 3,900 acute care hospitals under the hospital inpatient PPS are projected to be $105 billion, up from a projected $100 billion in fiscal year 2004...

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