Why are Transfer DRGs important to equity analysts, hedge fund managers, and hospital executives?
The new Transfer DRGs directly, immediately, and adversely impact every hospitals revenue and bottom line. CMS has estimated an overall reduction in payments of 0.9% in FY2006. The effects will vary greatly from hospital to hospital, depending on their casemix, treatment protocols, and other factors. Hospital equity analysts and hedge fund managers are now preoccupied with the financial damage from Hurricane Katrina. The Transfer DRGs will definitely get their attention in hospitals Q4-CY05 and Q1-CY06 earnings reports, even though its not yet on their radar screens. • What is a simple, concrete example for a single Medicare patient? Show me the money. Suppose a hospital treated a Medicare patient in September, 2005 (FY2005) in DRG 148 (Major Bowel Procedures) and discharged that patient to a rehab unit after a 5-day length of stay. A typical hospital would be paid $18,420 in FY05. A hospital treating that patient in October, 2005 (FY06) would be paid 40% less for this caseonly $12,384
