Last spring, CMS proposed the most significant changes to the Inpatient Prospective Payment System since its implementation in 1983. Their proposal was two-pronged and called for the introduction of cost-based weights in FY 2007 and severity-adjusted DRGs in FY 2008. CMS proposed a new set of "consolidated-severity adjusted DRGs" (CSA-DRGs), which were based on 3M's proprietary APR-DRGs. Based on an overwhelming response from the industry (over 2,100 comment letters), CMS refined its proposed weight methodology and contracted with RAND to do an objective analysis of available severity-adjustment alternatives. CMS's response to industry comments highlight just how important it is for all stakeholders to monitor what is happening and to comment on all proposals. Last year's industry response to the IPPS proposed rule is a case-study in how your opinion really does matter and how you can influence what CMS does.

With this in mind, here are some key dates to put on your calendar.
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There is much to learn from Maryland's hospitals, which for more than a year have been using the All-Patient Refined (APR-DRG) severity-adjustment system from 3M Health Information Systems. APR-DRGs form the foundation of the system that the Centers for Medicare & Medicaid Services (CMS) initially proposed to use in its nationwide roll-out of a severity-adjustment system.

Although CMS is now evaluating alternative severity-adjustment systems (including Ingenix's APS-DRG system), APR-DRGs remain in contention for CMS' selection. Therefore, there is value in evaluating the experience that Maryland's hospitals have had with the system. Specifically, health information managers there have made several compliance-related observations:
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