The key measurements in this section provide a convenient summary of
adjustments to Medicare revenue that are reported on a hospital's annual cost
report. The cost report contains information such as facility characteristics,
utilization data, cost and charges by cost center (in total and for Medicare),
Medicare settlement data, and financial statement data. CMS maintains the cost
report data in the Healthcare Provider Cost Reporting Information System
(HCRIS) which is updated quarterly and is based on a hospital's fiscal year
- HIT Payment
- CMS developed an Electronic Health Records (EHR) Incentive Program to
encourage eligible hospitals to adopt certified EHR technology. These
incentives included payments to hospitals for qualifying Health Information
Technology (HIT). These payments are reported on Worksheet E-1, part II of a
hospital's cost report.
- VBP Adjustment
- CMS developed a Value Based Purchasing (VBP) program to provide hospitals
with financial incentives for IPPS patients based on selected quality metrics.
These incentives are given as adjustments to the DRG payment amount each fiscal
year. The adjustment amount is reported on Worksheet E, part A, line 70.93 of
a hospital's cost report.
- DSH Ratio
- Hospitals that treat relatively high numbers of low income patients are
designated as Disproportionate Share Hospitals (DSH) and are eligible for
additional Medicare payment. A DSH ratio is calculated in determining whether
a hospital is designated. In general, it is the sum of the percentage of SSI
recipient patient days to total inpatient days plus the percentage of Medicaid
days to total inpatient days. The ratio is reported on Worksheet E, part A,
line 33 of a hospital's cost report.
- DSH Amount
- Hospitals that treat relatively high numbers of low income patients are
designated as Disproportionate Share Hospitals (DSH) and are eligible for
additional Medicare payment. The DSH Amount is reported on Worksheet E, part A,
line 44 of a hospital's cost report.
- Uncompensated Care
- Beginning in 2015, CMS has been publishing rulings that effect DSH Payments
(above) and Uncompensated Care. Additional payment for Uncompensated Care is
reported on Worksheet E, part A, line 36 of a hospital's cost report.
- IME Amount
- IPPS hospitals that have residents in an approved graduate medical
education (GME) program receive an additional payment for a Medicare discharge
to reflect the higher patient care costs of teaching hospitals relative to
non-teaching hospitals. The amount of this adjustment is reported on Worksheet
E, part A, line 29 of a hospital's cost report.
- Readmission Adjustment
- CMS developed a Hospital Readmission Reduction program that reduces
payments to hospitals with excessive 30-day readmission rates. As defined, a
readmission may be to the same hospital or to a different hospital or acute
care facility. Patients may be readmitted for the same condition that
necessitated his or her recent hospital stay, or for a different reason. The
Readmission Reduction amount is reported on Worksheet E, part A, line 70.94 of
a hospital's cost report.
- HAC Adjustment
- Beginning in FY15, CMS has begun reducing Medicare payments for Inpatient
Prospective Payment System hospitals with a high rate of complications
occurring after admission. Hospital-Acquired Conditions (HACs) are a group of
reasonably preventable conditions that patients did not have upon admission to
a hospital, but which developed during the hospital stay. Hospital performance
under the HAC Reduction Program is determined based on a hospital's Total HAC
Score, which can range from 1 to 10. Hospitals in the highest quartile receive
a 1% payment reduction. The HAC Adjustment amount is reported on Worksheet E,
part A, line 70.99 of a hospital's cost report.