Chapter 6 Medicare-Medicaid Prospective
Payment Systems for Inpatients Questions &
Answers Already Passed
add-on - ANSWERSpayment adjustment in a federal system that increases
reimbursement; often temporarily authorized
Arithmetic mean length of stay AMLOS - ANSWERSSum of all lengths of stay in a set of
cases divided by the number of cases. The national average number of day patients
within a given diagnosis related group DRG hospitalized.
case-mix - ANSWERSset of categories of patients (type and volume) treated by a
healthcare organization and representing the complexity of the organization's caseload.
code range - ANSWERSapplicable set of diagnosis or procedure codes
complication/comorbidity CC - ANSWERS1. a medical condition that arises during an
inpatient hospitalization. 2. a condition that arises during the hospital stay that prolongs
the length of stay at least one day in approximately 75% of the cases
cost-of-living adjustment COLA - ANSWERSAlteration that reflects a change in the
consumer price index CPI, which measures purchasing power between time periods.
The CPI is based on a market basket of goods and services that a typical consumer
buys.
diagnosis-related group DRG - ANSWERSinpatient classification that categorizes
patients who are similar in terms of diagnoses and treatments, age, resources used,
and length of stay. Under the prospective payment system PPS, hospitals are paid a set
fee for treating patients in a single DRG category, regardless of the actual cost of care
for the individual.
disproportionate share hospital DSH - ANSWERShealthcare organizations meeting
governmental criteria for percentages of indigent patients. Hospital with an unequally
large share of low income patients. Federal payments to these hospitals are increased
to adjust for the financial burden.
encounter - ANSWERSprofessional, direct personal contact between a patient and a
provider who delivers services or is professionally responsible for services delivered to
a patient. face to face contact between a patient and a provider who has primary
responsibility for assessing and treating the condition of the patient at a given contact
and exercises independent judgment in the care of the patient.
, Federal Register - ANSWERSthe daily publication of the US Government Printing Office
that reports all regulations (rules); legal notices of federal administrative agencies, of
departments of the executive branch, and of the president; and federally mandated
standards, including Healthcare common Procedure Coding System (HCPCS) and ICD-
9-CM
Final rule - ANSWERSregulation published by an agency, commented on by public
comment, and published in its official form in the Federal Register. Has the force of law
on its effective date.
Fiscal intermediary FI - ANSWERSlocal payment branch of the Medicare program.
Intermediaries are public or private insurance companies that contract with the Centers
for Medicare and Medicaid Services to act as agents of the federal government in
dealing directly with participating providers of Medicare. An intermediary is usually, but
necessarily, an insurance company, such as Blue Cross. FIs reimburse for inpatient or
hospital services (Part A Medicare) and some Part B services.
Fiscal year FY - ANSWERSYearly accounting period; the 12 month period on which a
budget is planned. the federal fiscal year is October 1 through September 30 of the next
year. Some state fiscal years are July 1 through June 30 of the next year. Often,
agencies and companies match their fiscal years to the state and federal governments
with which they contract.
geometric mean length of stay GMLOS - ANSWERSstatistically adjusted value of all
cases of a given diagnosis-related group DRG, allowing for the outliers, transfer cases,
and negative outlier cases that would normally skew the data. The GMLOS is used to
compute hospital reimbursement for transfer cases.
grouper - ANSWERScomputer program using specific data elements to assign patients,
clients, or residents to groups, categories, or classes
indirect medical education adjustment IME - ANSWERSPercentage increase in
Medicare reimbursement to offset the costs of medical education that a teaching
hospital incurs.
inpatient psychiatric facility IPF - ANSWERSa hospital or hospital unit that provides
psychiatric care for patients
Labor-related share - ANSWERSsum of facilities' relative proportion of wages and
salaries, employee benefits, professional fees, postal services, other labor-intensive
services, and the labor-related share of capital costs from the appropriate market
basket. Labor-related share is typically 70-75% of healthcare facilities' costs. Adjusted
annually and published in the Federal Register.
major complication/comorbidity MCC - ANSWERSDiagnosis codes classified as MCCs
reflect the highest level of severity.
Payment Systems for Inpatients Questions &
Answers Already Passed
add-on - ANSWERSpayment adjustment in a federal system that increases
reimbursement; often temporarily authorized
Arithmetic mean length of stay AMLOS - ANSWERSSum of all lengths of stay in a set of
cases divided by the number of cases. The national average number of day patients
within a given diagnosis related group DRG hospitalized.
case-mix - ANSWERSset of categories of patients (type and volume) treated by a
healthcare organization and representing the complexity of the organization's caseload.
code range - ANSWERSapplicable set of diagnosis or procedure codes
complication/comorbidity CC - ANSWERS1. a medical condition that arises during an
inpatient hospitalization. 2. a condition that arises during the hospital stay that prolongs
the length of stay at least one day in approximately 75% of the cases
cost-of-living adjustment COLA - ANSWERSAlteration that reflects a change in the
consumer price index CPI, which measures purchasing power between time periods.
The CPI is based on a market basket of goods and services that a typical consumer
buys.
diagnosis-related group DRG - ANSWERSinpatient classification that categorizes
patients who are similar in terms of diagnoses and treatments, age, resources used,
and length of stay. Under the prospective payment system PPS, hospitals are paid a set
fee for treating patients in a single DRG category, regardless of the actual cost of care
for the individual.
disproportionate share hospital DSH - ANSWERShealthcare organizations meeting
governmental criteria for percentages of indigent patients. Hospital with an unequally
large share of low income patients. Federal payments to these hospitals are increased
to adjust for the financial burden.
encounter - ANSWERSprofessional, direct personal contact between a patient and a
provider who delivers services or is professionally responsible for services delivered to
a patient. face to face contact between a patient and a provider who has primary
responsibility for assessing and treating the condition of the patient at a given contact
and exercises independent judgment in the care of the patient.
, Federal Register - ANSWERSthe daily publication of the US Government Printing Office
that reports all regulations (rules); legal notices of federal administrative agencies, of
departments of the executive branch, and of the president; and federally mandated
standards, including Healthcare common Procedure Coding System (HCPCS) and ICD-
9-CM
Final rule - ANSWERSregulation published by an agency, commented on by public
comment, and published in its official form in the Federal Register. Has the force of law
on its effective date.
Fiscal intermediary FI - ANSWERSlocal payment branch of the Medicare program.
Intermediaries are public or private insurance companies that contract with the Centers
for Medicare and Medicaid Services to act as agents of the federal government in
dealing directly with participating providers of Medicare. An intermediary is usually, but
necessarily, an insurance company, such as Blue Cross. FIs reimburse for inpatient or
hospital services (Part A Medicare) and some Part B services.
Fiscal year FY - ANSWERSYearly accounting period; the 12 month period on which a
budget is planned. the federal fiscal year is October 1 through September 30 of the next
year. Some state fiscal years are July 1 through June 30 of the next year. Often,
agencies and companies match their fiscal years to the state and federal governments
with which they contract.
geometric mean length of stay GMLOS - ANSWERSstatistically adjusted value of all
cases of a given diagnosis-related group DRG, allowing for the outliers, transfer cases,
and negative outlier cases that would normally skew the data. The GMLOS is used to
compute hospital reimbursement for transfer cases.
grouper - ANSWERScomputer program using specific data elements to assign patients,
clients, or residents to groups, categories, or classes
indirect medical education adjustment IME - ANSWERSPercentage increase in
Medicare reimbursement to offset the costs of medical education that a teaching
hospital incurs.
inpatient psychiatric facility IPF - ANSWERSa hospital or hospital unit that provides
psychiatric care for patients
Labor-related share - ANSWERSsum of facilities' relative proportion of wages and
salaries, employee benefits, professional fees, postal services, other labor-intensive
services, and the labor-related share of capital costs from the appropriate market
basket. Labor-related share is typically 70-75% of healthcare facilities' costs. Adjusted
annually and published in the Federal Register.
major complication/comorbidity MCC - ANSWERSDiagnosis codes classified as MCCs
reflect the highest level of severity.
