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Application Exercise 4 - Calculating Inpatient Reimbursements I. Inpatient Acute Care: Payment Calculation Steps Step 1: MS-DRG Assignment: MS-DRG assigned according to CMS specifications. CMS provides a relative weight for each DRG. This is the MS-DRG RW. Step 2: Initial Facility Payment Rate Adjustment a. Adjust the CMS base rate ($5,500) by facility specific adjustments (wage adjustment, COLA adjustment, and then Disproportionate Share Hospital Adjustment, Indirect Medical Education Adjustment). This is the hospital specific (or fully loaded) base rate. b. For Wage/COLA Adjustments remember that the wage index adjusts only the LABOR Oortion of the facility rate; COLA only adjusts the non labor portion. For this assignment, the LABOR portion is 60% and non labor portion is 40% Step 3: MS-DRG RW * Fully Loaded Based Rate = Payment Exercises: 1. For each hospital, calculate the hospital's wage adjusted rate and hospital specific base rate (fully loaded base rate). CMS base Rate is $5,500 MS DRG MS DRG RW Patient #1 Knee Replacement 470 2.0866 Patient #2 Hysterectomy 743 0.9306 Patient #3 Gastric Bypass 621 1.4835 Patient #4 CABG 236 3.7720 DSH IME Hospital Specific Base Rate Hospital A Hospital B Hospital C Hospital D Hospital E Wage COLA? Wage Index? (40%) Adjusted (60%) Rate .8 NO 1.8 NO 1.2 NO 1.5 NO 1.0 NO 1.03 NO 1.087 1.0576 NO NO 1.15 1.05 1.02 NO 2. Now, using the hospital specific base rate for Hospital C, calculate actual payments for the four patients provided. a. Knee Replacement b. Hysterectomy c. Gastric Bypass d. CABG