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HHS/CMS RIN: 0938-AH55 Publication ID: Fall 1996 
Title: ●Changes to the Hospital Inpatient Prospective Payment System and Fiscal Year 1998 Rates (BPD-878-P) 
Abstract: Medicare pays for hospital inpatient services under a prospective payment system (PPS) in which payment is made at a predetermined specific rate for the operating and capital-related costs associated with each discharge. These rules would announce the prospective payment rates for operating and capital-related costs for FY 1998. We would also revise the Medicare hospital inpatient prospective payment systems for operating costs and capital-related costs to implement necessary changes arising from our continuing experience with the systems. In addition, we would set forth rate-of-increase limits as well as policy changes for hospitals and hospital units excluded from the prospective payment systems. These changes would be applicable to discharges occurring on or after October 1, 1997. 
Agency: Department of Health and Human Services(HHS)  Priority: Other Significant 
RIN Status: First time published in the Unified Agenda Agenda Stage of Rulemaking: Proposed Rule Stage 
Major: Yes  Unfunded Mandates: No 
CFR Citation: 42 CFR 412    42 CFR 413   
Legal Authority: 42 USC 1395ww   
Legal Deadline:
Action Source Description Date
Final  Statutory    09/01/1997 
NPRM  Statutory    05/01/1997 

Statement of Need: Section 1886(e)(5) of the Social Security Act requires the Secretary to publish a proposed rule on prospective payment system policies and payment rates in the Federal Register by May 1 and a final rule by September 1.

Summary of the Legal Basis: As noted above, publication of proposed and final rules concerning hospital PPS policies and payment rates is required by law. The statute sets forth several specific requirements concerning what must be included in the PPS proposed and final rules (See sections 1886(b)(3)(B), 1886(d)(1)(A), 1886(d)(2)(H), 1886(d)(3)(A), 1886(d)(3)(E), 1886(d)(4)(C), 1886(e)(4), 1886(e)(5), and 1886(g)(1)(A) of the Act.)

Alternatives: Publication of these rules is not discretionary. Thus, no alternatives exist.

Anticipated Costs and Benefits: We are unable to estimate at this time the costs and benefits associated with these rules.

Risks: Not applicable.

Action Date FR Cite
NPRM  05/00/1997    
Final Action  09/00/1997    
Additional Information: BPD-878
Regulatory Flexibility Analysis Required: Yes  Government Levels Affected: Federal, State 
Small Entities Affected: Businesses, Organizations 
Included in the Regulatory Plan: Yes 
Agency Contact:
Charles Booth
Director, Office of Hospital Policy, Bureau of Policy Development
Department of Health and Human Services
Centers for Medicare & Medicaid Services
C5-02-23, 7500 Security Boulevard,
Baltimore, MD 21244-1850
Phone:410 786-4487