Adjustment of Inpatient Care Reimbursement for Nursing Intensity

Abstract

The Centers for Medicare and Medicaid Services has begun an ambitious recalibration of the inpatient prospective payment system, the first since its introduction in 1983. Unfortunately, inpatient nursing care has been overlooked in the new payment system and continues to be treated as a fixed cost and billed at a set per-diem “room and board” fee despite the known variability of nursing intensity across different care settings and diagnoses. This article outlines the historical influences regarding costing, billing, and reimbursement of inpatient nursing care and provides contemporary evidence about the variability of nursing intensity and costs at acute care hospitals in the United States. A remedy is proposed to overcome the existing limitations of the Inpatient Prospective Payment System by creating a new nursing cost center and nursing intensity adjustment by DRG for each routine-and intensive-care day of stay to allow independent costing, billing, and reimbursement of inpatient nursing care.