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Medicare program; changes to the inpatient hospital prospective payment system and fiscal year 1986 rates--HCFA. Proposed rule.

We are proposing to modify the Medicare inpatient hospital prospective payment system in order to implement necessary changes arising from experience with the system and from certain recommendations of the Prospective Payment Assessment Commission provided under section 1886(d)(4)(D) of the Social Security Act (the Act). In addition, this proposal sets forth our first adjustment of the diagnosis-related group weights and classifications as required under section 1886(d)(4)(C) of the Act. In addition, in the addendum to this proposed rule, we are proposing changes in the methods, amounts, and factors necessary to determine prospective payment rates for Medicare inpatient hospital services. Changes proposed to the Federal portion of the payment would be applicable to discharges occurring on or after October 1, 1985. Proposed changes to the hospital specific portion would be effective with hospital cost reporting periods beginning on or after October 1, 1985. In effect, these changes would apply to the final year of the three-year transition period for the hospital prospective payment system. The addendum also sets forth our proposal for determining the rate-of-increase limits (target amounts) for hospitals excluded from the prospective payment system.