(a) OWCP will pay for inpatient medical services according to pre-
determined, condition-specific rates based on the Prospective Payment
System (PPS) devised by HCFA (42 CFR parts 412, 413, 424, 485, and 489).
Using this system, payment is derived by multiplying the diagnosis-
related group (DRG) weight assigned to the hospital discharge by the
provider-specific factors.
(1) All hospital discharges will be classified according to the DRGs
prescribed by the HCFA in the form of the DRG Grouper software program.
On this list, each DRG represents the average resources necessary to
provide care in a case in that DRG relative to the national average of
resources consumed per case.
(2) The provider-specific factors will be provided by HCFA in the
form of their PPS Pricer software program. The software takes into
consideration the type of facility, census division, actual geographic
location (MSA) of the hospital, case mix cost per discharge, number of
hospital beds, intern/beds ratio, operating cost to charge ratio, and
other factors used by HCFA to determine the specific rate for a hospital
discharge under their PPS. The Director may devise price adjustment
factors as appropriate using OWCP's processing experience and internal
data.
(3) OWCP will base payments to facilities excluded from HCFA's PPS
on consideration of detailed medical reports and other evidence.
(4) The Director shall review the pre-determined hospital rates at
least once a year, and may adjust any or all components when he or she
deems it necessary or appropriate.
(b) The Director shall review the schedule of fees at least once a
year, and may adjust the schedule or any of its components when he or
she deems it necessary or appropriate.
