Economics Seminar Series: Better Aligning Hospital Costs and Payments: Hospital Specific Relative Value Method for DRG Payments
This event is in the past.
Detroit, MI 48202
Department of Economics
Bowling Green University
Better Aligning Hospital Costs and Payments: Hospital Specific Relative Value Method for DRG Payments
The Center for Medicaid and Medicare Services (CMS) uses a DRG- based reimbursement system for inpatient hospitals stays. The method used by CMS to calculate Diagnosis Related Group (DRG) weights do not align payments and costs. We demonstrate an HSRV weighting system has two benefits: first it removes the financial incentives for hospitals to expand specialized services
and aligns costs with payments for more mundane illnesses. It also corrects for overpayment associated with indirect medical education to teaching hospitals and the subsequent underpayment to non-teaching hospitals.