FY 2021 IPPS final rule: Review MS-DRG payment factors and other adjustments

September 29th, 2020

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Note:  The following article synopsis was NOT provided by HCPro. It was created by Find-A-Code/innoviHealth.

Article Overview

This article explains the FY 2021 IPPS final rule at a high level, focusing on how hospital reimbursement is shaped by MS-DRG updates, operating and capital payment factors, wage index-related adjustments, and selected Medicare payment program changes. It is intended for hospital coders, revenue cycle staff, compliance professionals, and others who need a broad understanding of the annual IPPS changes discussed in the rule.

Why This Topic Matters

The article helps readers understand which FY 2021 IPPS changes may affect hospital payment calculations, reimbursement adjustments, and related reporting or program requirements.

Article Sections

  1. MS-DRG review

    Introduces the MS-DRG framework used under IPPS and summarizes the broad factors that affect case assignment and reimbursement.

  2. Significant MS-DRG/reimbursement changes

    Summarizes selected FY 2021 MS-DRG updates and related reimbursement changes described in the final rule, including changes tied to specific inpatient services and payment treatment in certain circumstances.

  3. Additional payment factors

    Provides an overview of the payment components and adjustments that can affect the total MS-DRG payment.

  4. OSA

    Reviews operating standardized amounts and the general factors used to determine operating payment updates for FY 2021.

  5. Operating adjustments

    Summarizes major operating payment adjustments discussed in the article, including quality, documentation, wage index, and disproportionate share-related factors.

  6. Capital standard federal rate

    Describes the FY 2021 capital rate update and the revised capital standard federal rate.

  7. Capital adjustments

    Outlines the broad categories of capital payment adjustments that may apply under IPPS.

  8. Outlier threshold

    Explains the FY 2021 outlier threshold update and the types of payment amounts considered in the threshold calculation.

What You Will Learn

  • How FY 2021 IPPS payment factors relate to hospital reimbursement
  • Which broad categories of MS-DRG updates are highlighted in the final rule
  • What types of operating and capital adjustments are discussed
  • How wage index and quality program participation can affect payment updates
  • Which general Medicare payment factors contribute to the outlier threshold

Who Should Read This

  • Hospital coders
  • Inpatient reimbursement specialists
  • Revenue cycle staff
  • Compliance professionals
  • Medicare payment analysts
  • Health care administrators

Codes Discussed

  • MS-DRG: 018
  • MS-DRG: 016
  • MS-DRG: 019
  • MS-DRG: 650
  • MS-DRG: 651
  • MS-DRG: 652
  • ICD-10-PCS: XW033C3
  • ICD-10-PCS: XW043C3
  • ICD-10-CM: Z00.6

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