Inpatient Prospective Payment System (IPPS) Help Reference¶

The IPPS is used to reimburse acute care hospitals for inpatient stays under Medicare Part A.

[!NOTE] This content is sourced from the official CMS Web Pricer.

Actual geographic MSA¶

Actual Geographic Metropolitan Statistical Area (MSA), indicates where a provider is located. The Actual Geographic MSA is entered as a 4-digit value, that ranges from 0040-9965. In a rural area, the Actual Geographic MSA is entered as '00' followed by the 2-digit numeric state code. For example, Ohio with state code 36 would be entered as '0036'.

Add-on visit amount¶

The add-on amount to be applied to the earliest line item date with the corresponding revenue code.

Admit date¶

This field requires the date the patient was admitted to the facility (the ADMIT date in FL 12 of the UB 04).

AIDS Add-on Indicator¶

Flag indicating if an AIDS adjustment is applicable.

Bed size¶

The facility bed size is equal to the number of adult hospital beds and pediatric beds available to inpatient lodging. This field must be greater than zero.

Beneficiary CBSA¶

Enter the Core-Based Statistical Area code representing the beneficiary’s site of service, if services were provided in the home. This is the value code 61 amount from the claim.A residence can be an inpatient facility if an individual uses that facility as a place of residence. It is the level of care that is required and not the location where services are provided that determines payment. In other words, if an individual resides in a freestanding facility and requires routine home care, then claims are submitted for routine home care.

Bundle adjustment¶

Bundle Adjustment Amount represents the adjustment amount for hospitals participating in the Bundled Payments for Care Improvement Initiative.

Bundle percent¶

The field used to identify the discount percentage that will be applied to the payment for all of the hospitals' DRG over the lifetime of the initiative. The hospital must be participating in the Model 1 Bundled Payments for Care Improvement initiative.

Capital cost-to-charge ratio¶

The capital cost-to-charge ratio is derived from the latest cost report and corresponding charge data from the billing file.For hospitals for which the MAC is unable to compute a reasonable cost-to-charge ratio, it uses the appropriate statewide average cost-to-charge ratio calculated annually by CMS and published in the Federal Register. A provider may submit evidence to justify a capital cost-to-charge ratio that lies outside a 3 standard deviation band. The MAC uses the hospital's ratio rather than the statewide average if it agrees the hospital's rate is justified.

Capital disproportionate share hospital¶

A hospital qualifies for a capital DSH adjustment if it is located in a large urban or other urban area, has at least 100 beds and has a disproportionate share (DSH) percentage greater than 0.

Capital disproportionate share hospital percent¶

The Capital DSH is the capital disproportionate share adjustment percentage.

Capital exception payment¶

Exception payments are provided for hospitals with inordinately high levels of capital obligations. The capital exception payment rate is the per discharge exception payment to which a hospital is entitled.

Capital federal specific portion¶

The capital IPPS payment based on the Federal rate.

Capital hospital-specific rate¶

The hospital-specific capital rate is the hospital's allowable adjusted base year inpatient capital costs per discharge. This must be present unless a "Y" is entered in the Capital Indirect Medical Education Ratio field; or a "08" is entered in the Provider type field; or a termination date is present in Termination Date field. This field is not used as of October 1, 2002.

Capital indirect medical¶

An adjustment is provided to the Federal rate for indirect costs of medical education of interns and residents. The capital indirect medical education ratio field is the ratio of interns and residents to the hospital's average daily census. It is calculated by dividing the hospital's full-time equivalent total of residents during the fiscal year by the hospital's total inpatient days. This field is relevant for IPPS hospitals and IRFs.

Capital indirect medical education¶

The ratio of residents/interns to the hospital's average daily census. Calculate by dividing the hospital's full-time equivalent total of residents during the fiscal year by the hospital's total inpatient days. (See §20.4.1 for inpatient acute hospital and §§140.2.4.3 and 140.2.4.5.1 for IRFs.) Zero-fill for a non-teaching hospital.

Capital new harmless ratio¶

The new capital hold harmless ratio is the ratio of the hospital's allowable inpatient costs for new capital to the hospital's total allowable inpatient capital costs. This field is updated annually.

Capital old harmless rate¶

The old capital hold harmless rate shows the hospital's allowable inpatient "old" capital costs per discharge incurred for assets acquired before December 31, 1990, for capital PPS.

Capital outlier¶

Outlier payments are granted for extremely costly cases. Cases are identified by comparing estimated operating and capital costs to a fixed-loss threshold. The fixed-loss threshold is set annually and adjust to reflect labor costs in the hospital's local market. Total Federal PPS payments are reduced by an amount equal to anticipated outlier payments for the year to fund capital and operating outlier payments.A capital or operating cost outlier is paid only if both capital and operating costs related to an admission exceed the combined outlier threshold. The outlier computation methodology is contained in the A/B MAC (A) Pricer installation guide.

Capital PPS pay code¶

The capital PPS payment code indicates the type of capital payment methodology for hospitals. "A" indicates hold harmless, cost payment for old capital. "B" indicates hold harmless, 100% federal rate. "C" indicates fully prospective blended rate.

Case-mix-index¶

A hospital's case-mix-index (CMI) represents the average diagnosis-related group (DRG) relative weight for that hospital. It is calculated by summing the DRG weights for all Medicare discharges and dividing by the number of discharges. CMIs are calculated using both transfer-adjusted cases and unadjusted cases.

Change code for reclass¶

When this field is active, "Y" indicates that the provider's wage index location has been reclassified for the year. "N" indicates that the provider has not been reclassified for the year.

Condition code¶

Condition codes are used to report conditions during the beneficiary's stay on the claim and are used in ways similar to National drug codes, Procedure codes, ect.

Core-based statistical area (CBSA)¶

A Core-Based Statistical Area (CBSA) is a geographic area defined by the Office of Management and Budget (OMB). The CBSA designation is used to adjust for geographic differences in wages.The term refers collectively to metropolitan and micropolitan statistical areas, which consist of one or more counties (or equivalents) anchored by an urban center of at least 10,000 people plus adjacent counties that are tied to the urban center.

Core-based statistical area / Geographic CBSA¶

A Core-Based Statistical Area (CBSA) is a labor market area definition adopted by CMS based on the delineations defined by the Office of Management and Budget (OMB). A hospital's geographic CBSA is based on its geographic location, irrespective of any reclassification.

Cost¶

The dollar amount determined by the Pricer to be the payment for the visits in each discipline if the claim is paid as a Low Utilization Payment Adjustment (LUPA).

Cost of living adjustment¶

The cost of living adjustment (COLA) factor accounts for a higher cost of living in Alaska and Hawaii. The COLA factor provided to facilities is published annually in the final rule for the prospective payment systems.

Cost outlier threshold¶

N/A for IHS/CHS. Select 'N' if the cost outlier threshold is not applicable for the claim. Select 'Y' if you want to know the cost outlier threshold if you are trying to price an outlier claim where Medicare benefits have exhausted (i.e., occurrence code A3).

Cost outlier threshold amount¶

To qualify for outlier payments, a case must have costs above a fixed-loss cost threshold amount (a dollar amount by which the costs of a case must exceed payments in order to qualify for outliers). Hospital-specific cost-to-charge ratios are applied to the covered charges for a case to determine whether the costs of the case exceed the fixed-loss outlier threshold. Payments for eligible cases are then made based on a marginal cost factor, which is a percentage of the costs above the threshold.

Cost outlier threshold results summary¶

The cost outlier threshold value selected in the input form.

Cost-to-charge ratio¶

The cost-to-charge ratio is derived from the latest settled facility cost report and corresponding charge data from the billing file. It is calculated by dividing the Medicare operating costs by Medicare covered charges.Medicare operating costs can be obtained from the Medicare cost report form CMS-2552-96, Supplemental Worksheet D-1, Part II, Line 53. Medicare covered charges can be obtained from the MAC billing file, i.e., PS&R record. For hospitals for which the MAC is unable to compute a reasonable cost-to-charge ratio, they use the appropriate urban or rural statewide average cost-to-charge ratio calculated annually by CMS and published in the Federal Register. These average ratios are used to calculate cost outlier payments for those hospitals where computed cost-to-charge ratios are not within the limits published in the Federal Register. For IRF and LTCH PPS, a combined operating and capital cost-to-charge ratio is entered here.

County code¶

The 5-digit county code where the provider is located.

Covered charges¶

This field requires the covered charges from the claim. “Covered charges” means the benefits that Medicare will reimburse on this claim.

Covered days¶

This field requires the number of covered days from the claim. “Covered days” means the number of days of inpatient stay in this facility that Medicare will reimburse on this claim.

Current census division¶

The current census division indicates the census division to which the facility belongs for payment purposes. The 9 census regions can be viewed at the U.S. Census Bureau website, here: https://www.census.gov/geographies/reference-maps/2010/geo/2010-census-regions-and-divisions-of-the-united-states.html

Device cost-to-charge ratio¶

Derived from the latest available cost report data. Does not apply to ESRD Facilities.

Diagnosis codes¶

The International Classification of Diseases, Tenth Revision, Clinical Modification (ICD-10-CM) code set used to report the beneficiary's principal diagnosis or and other diagnoses during the stay.For example, A49.02 can be entered as A4902 without decimals.

Diagnosis related group (DRG) code¶

Enter the Medicare Severity-Diagnosis Related Group (MS-DRG) for the claim. The MS-DRG is determined by the Grouper software or may be on the UB-04 claim form in FL 71.

Discharge date¶

This field requires the date the patient was discharged from the facility (the THROUGH date in FL 6 of the UB 04).

Dollar rate¶

The dollar rates used by the Web Pricer to calculate the payment for the visits in each discipline if the claim is paid as a Low Utilization Payment Adjustment (LUPA).

Effective date¶

The effective date is the date of the provider's first PPS period, or, for subsequent PPS periods, the effective date of a change to the provider specific file. Whenever the status of any element of the file changes, the Fiscal Intermediary (FI) prepares an additional record showing the effective date. For example, when a hospital's FY beginning date changes as a result of a change in ownership or other "good cause," the FI makes an additional record showing the effective date of the change.

Electronic health record (EHR) incentive program reduction indicator¶

Enter Y or N; or leave blank.

Electronic health record adjustment¶

Eligible hospitals that are not meaningful EHR users will be subject to a payment adjustment beginning on October 1, 2018. This payment adjustment is applied as a reduction to the applicable percentage increase to the Inpatient Prospective Payment System (IPPS) payment rate, thus reducing the update to the IPPS standardized amount for these hospitals. Hospitals must demonstrate meaningful use every year according to the timelines detailed by the program in order to avoid Medicare payment adjustments.

Electronic health record reduction indicator¶

Enter a 'Y' if the hospital is subject to a reduction due to NOT being an EHR meaningful user. Leave blank if the hospital is an Electronic Health Records meaningful user.

ESRD children hospital quality indicator¶

Children's Hospitals for End Stage Renal Disease (ESRD) Facilities. Enter the code applicable to the ESRD Quality Incentive Program (QIP). - Blank = no reduction

• 1 = ½ percent payment reduction

• 2 = 1 percent payment reduction

• 3 = 1½ percent payment reduction

• 4 = 2 percent payment reduction

Estimated total pass-through amount¶

When the "HMO Paid Claim" field equals "no," this amount is the product of the total pass-through & miscellaneous field and the length of stay.When the "HMO Paid Claim" field equals "yes," this amount is the product of the sum of the total pass-through amount & miscellaneous field, subtracting the pass-through amounts for Direct Medical Education, Organ Acquisition, and Allogeneic Stem Cell Acquisition, and the length of stay.

Facility specific rate¶

The PPS Facility Specific Rate or Case Mix Adjusted Cost Per Discharge is calculated for PPS hospitals and waiver state non-excluded hospitals as the base year cost per discharge divided by the case-mix-index. New providers are entered as zero.

Federal PPS blend indicator¶

The federal PPS blend indicator variable determines the blended payment rate. The percentage payment varies by provider type.

Fiscal year begin date¶

The fiscal year begin date is the date on which the provider's cost reporting period begins. This field must be equal to or less than the effective date. This date is updated annually in the provider specific file (PSF) by the MAC to show the current year for providers receiving a blended payment based on their FY begin date.

Fiscal year end date¶

The fiscal year end date is the last day covered by the provider's cost report. The fiscal year end date is formatted as CCYYMMDD.

From date¶

Enter the date from a claim that corresponds to the Statement Covers Period “From” field of the UB-04.

Health insurance PPS code¶

This field is used by the program to determine the appropriate case-mix weight for payment calculation. Enter the Health Insurance Prospective Payment System (HIPPS) code that corresponds to the earliest dated revenue code 0022 line on the claim. Medicare will only price valid HIPPS code. For a list of valid Skilled Nursing Facility HIPPS codes, refer to: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ProspMedicareFeeSvcPmtGen/HIPPSCodes

Health maintenance organizations (HMO) paid claim¶

N/A for IHS/CHS. Enter 'N' (or tab). HMOs must enter 'Y'When a 'Y' is entered in this field, and the provider is a Sole Community Hospital (SCH), the 'MA HSP' field will be populated. The 'MA HSP' field reflects the payment based on 100% hospital-specific (HSP) rate. HMOs may compare this amount to the 'TOT OPER AMT' less the 'O-HSP' (Operating hospital-specific Rate) amount to determine the payment amount for a SCH, that is the greater of the Federal amount or the HSP amount.When Health maintenance organizations (HMO) PAID CLAIM field equals 'Y' the Pricer shows the outlier amount if there is an outlier, and then includes that amount in the total payment. The MA plans paying out of network PPS hospitals must pay outliers. For Sole community hospitals, the outliers are paid if operating PPS (including outliers) is greater than the HSP. But unlike Medicare, for MA paying non-network SCHs, the greater of the two is paid on a claim by claim basis with no cost settlement.When the HMO PD CLAIM field is set to 'Y' the following pass-through payments may be included in the pass-through payment field: - Capital - For PPS hospitals prior to their cost reporting period beginning in FY 92, new hospitals during their first 2 years of operation FY 92 or later, and non-PPS hospitals or units.

• Supply Chain Costs - For costs of establishing and maintaining access to buffer stocks of essential medicines and the procurement of wholly domestically made NIOSH-approved surgical N95 respirators.

• Certified Registered Nurse Anesthetists (CRNAs) - For rural hospitals that perform fewer than 500 surgeries per year

• Nursing and Allied Health Professional Education - When conducted by a provider in an approved program

*Also see the “A Note on Pass-through Payments in the PC Pricer” section at the end of the document. ***

Hospital quality indicator¶

The hospital quality indicator indicates that the hospital meets criteria to receive higher payment per MMA (Medicare Modernization Act of 2003) quality standards. If the field is blank, the hospital does not meet criteria. If the field shows "1", the hospital quality standards have been met. For more information about CMS Quality Programs, visit: https://www.qualitynet.org/

Hospital readmission reduction adjustment¶

The Hospital Readmissions Reduction Program (HRRP) is a Medicare value-based purchasing program that reduces payments to hospitals with excess readmissions. For each eligible hospital, CMS calculates the payment adjustment factor (PAF), which represents the percent the hospital’s payment is reduced. Hospitals with higher PAFs have lower payment reductions. More information about the HRRP adjustment factor can be viewed here: https://www.qualitynet.org/inpatient/hrrp/payment

Hospital readmission reduction program participant¶

The Hospital Readmissions Reduction Program (HRRP) is a Medicare value-based purchasing program that reduces payments to hospitals with excess readmissions. The hospital readmissions reduction program participant field indicates if an acute inpatient hospital is participating. "0" indicates that the hospital is not participating in the program. "1" indicates that the hospital is participating in the program. More information about HRRP can be viewed here: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Readmissions-Reduction-Program

Hospital-acquired condition (HAC) reduction program participant¶

Enter Y or N; only for those providers subject to IPPS.

Hospital-acquired condition adjustment¶

Beginning with Fiscal Year (FY) 2015 discharges, the hospital-acquired condition adjustment (HAC) Reduction Program requires adjustments to payments to hospitals that rank in the worst-performing 25 percent of all subsection (d) hospitals with respect to HAC quality measures. Hospitals with a Total HAC Score greater than the 75^th percentile of all Total HAC Scores (i.e., the worst-performing quartile) will be subject to a 1 percent payment reduction.

Hospital-acquired condition reduction indicator¶

A value of 'Y' indicates that the hospital is subject to a reduction under the HAC Reduction Program. A value of 'N' indicates that the hospital is NOT subject to a reduction under the HAC Reduction Program.

Inpatient core-based statistical area (CBSA)¶

Core-Based Statistical Area (CBSA), used to wage-adjust inpatient levels of care. Hospices shall report the CBSA for inpatient levels of care in value code G8.

Inpatient diagnosis related group (DRG) geometric mean average length of stay (LOS)¶

The geometric mean length of stay (LOS) represents the average number of days of care a patient receives for a given Medicare Severity-Diagnosis Related Group (MS-DRG).

Inpatient diagnosis related group (DRG) Weight¶

Inpatient hospital services are paid on a rate per discharge basis that varies according to the Medicare Severity-Diagnosis Related Group (MS-DRG) to which a beneficiary's stay is assigned. The formula used to calculate payment for a specific case multiplies an individual hospital's payment rate per case by the weight of the MS-DRG to which the case is assigned. Each MS-DRG weight represents the average resources required to care for cases in that particular MS-DRG, relative to the average resources used to treat cases in all MS-DRGs.

Inpatient wage index¶

Wage indexes are an adjustment factor to the standardized amounts “for area differences in hospital wage levels by a factor (established by the Secretary) reflecting the relative hospital wage level in the geographic area of the hospital compared to the national average hospital wage level.”The wage index is updated annually based on a survey of wages and wage-related costs of short-term, acute care hospitals. Data included in the wage index is derived from the Medicare Cost Report, the Hospital Wage Index Occupational Mix Survey, hospitals' payroll records, contracts, and other wage-related documentation.

Intermediary number¶

Intermediary number refers to the fiscal intermediary (FI) or the Part A/B Medicare Administrative Contractor (MAC) to which the provider is assigned.

Intern-to-bed ratio¶

The intern-to-beds ratio is the provider's intern and resident to bed ratio. This is calculated by dividing the provider's full-time equivalent residents by the number of available beds, based on the average number of full-time equivalent residents assigned to the hospital during the fiscal year. This calculation does not include residents in anesthesiology who are employed to replace anesthetists or those assigned to PPS-excluded units. This field will display zero for non-teaching hospitals.

Islet add-on¶

In certain circumstances, Medicare makes an additional payment for islet cell isolation services. This payment is in addition to the final IPPS amount for the hospital stay.For additional information see https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/downloads/R1192CP.pdf.

Length of stay¶

The total number of inpatient days between the IPPS admission and the IPPS discharge date.

Lifetime reserve days¶

In this field, you may enter the lifetime reserve days for the beneficiary. Lifetime reserve days, also known as reserve days, are for when a beneficiary is in the hospital for more than 90 days.Medicare will pay for 60 additional reserve days that a beneficiary can only use once in his or her lifetime. They are not renewable once they are used.Not applicable for Indian Health Service or Contract Health Service. Lifetime reserve days are Medicare days and are only applicable for Medicare beneficiaries.

Low-volume adjustment factor¶

An adjustment received once a hospital makes a written request for low-volume hospital status and is deemed qualified to receive the low-volume payment adjustment.

Low-volume payment adjustment factor¶

The low-volume hospital payment adjustment factor for each eligible hospital.

LTCH DPP indicator¶

Long-Term Care Hospital (LTCH) Discharge Payment Percentage (DPP) Payment Adjustment indicates whether the LTCH is subject to the DPP payment adjustment for failure to maintain the required discharge payment percentage. A blank value indicates LTCH is not subject to the DPP payment adjustment. A 'Y' value indicated the LTCH is subject to the DPP payment adjustment.

LUGAR¶

A Lugar designation allows a hospital located in a rural county adjacent to one or more urban areas to be treated as urban for purposes of payment if it meets certain criteria. The Lugar field indicates if the MSA has been reclassified for wage index purposes. These are also known as Lugar reclassifications, and apply to ASC-approved services provided on an outpatient basis when a hospital qualifies for payment under an alternate wage index MSA. If there has not been a Lugar reclassification, this field is blank.

Medicaid ratio¶

The Medicaid ratio is used to determine if the hospital qualifies for a disproportionate share adjustment and to determine the size of the capital and operating DSH adjustments. The Medicaid ratio is the percentage of total inpatient days attributable to patients eligible for Medicaid by not Medicare Part A.

Medicare Advantage hospital-specific payment¶

Payment amount applicable MA plans. The Pricer will show the hospital-specific rate (i.e. hospital-specific payment) for each discharge for sole community hospitals (SCH).

Medicare performance adjustment¶

Enter the Medicare Performance Adjustment (MPA) percentage calculated and published by the Centers for Medicare & Medicaid Services (CMS).

Model 1 bundle percent¶

The Bundled Payments for Care Improvement (BPCI) initiative was comprised of four broadly defined models of care, which linked payments for the multiple services beneficiaries received during an episode of care. In Model 1, the episode of care was defined as the inpatient stay in the acute care hospital. This field displays the discount percentage for hospitals who participated in BPCI Model 1. More information about BPCI can be viewed here: https://innovation.cms.gov/innovation-models/bundled-payments

National drug code (NDC)¶

Only NDCs that qualify for New Technology Add-on Payment (NTAP) or New COVID-19 Treatments Add-On Payment (NCTAP) should be entered in this field.National drug codes (NDCs) act as a universal product identifier. The code consists of 11 digits and can be included on claims for certain physician-administered drugs for the purpose of billing manufacturers for Medicaid drug rebates.

National labor¶

The base payment rate is divided into a labor-related and nonlabor share. The labor-related share is adjusted by the wage index applicable to the area where the hospital is located, and if the hospital is located in Alaska or Hawaii, the nonlabor share is adjusted by a cost of living adjustment factor.

National labor percent¶

If wage index is greater than 1, 69.7 percent labor share / 30.3 percent non-labor share.

National non-labor¶

The base payment rate is divided into a labor-related and nonlabor share. The labor-related share is adjusted by the wage index applicable to the area where the hospital is located, and if the hospital is located in Alaska or Hawaii, the nonlabor share is adjusted by a cost of living adjustment factor.

National non-labor percent¶

If wage index is greater than 1, 69.7 percent labor share / 30.3 percent non-labor share.

New hospital¶

The new hospital field will show a "Y" (Yes) for the first two years that a new hospital is in operation. It is left blank if the hospital is not within the first two years of operation.

New technology¶

If a new medical service or technology meets certain criteria, it may be considered for new technology add-on payment if, based on the estimated costs incurred with respect to discharges involving such service or technology, the Medicare Severity-Diagnosis Related Group (MS-DRG) prospective payment rate otherwise applicable to such discharges is inadequate.For additional information see https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/newtech.

Operating cost to charge ratio¶

Data element 25 in the PSFFrom the latest settled cost report and corresponding charge data from the billing file. Divide the Medicare operating costs by Medicare covered charges.Obtain operating costs from the cost report form CMS-2552-96, Supplemental Worksheet D-1, Part II, Line 53.Obtain Medicare covered charges from the MAC billing file, i.e., PS&R record.If the MAC can't compute a reasonable cost-to-charge ratio, use the appropriate urban or rural statewide average cost-to-charge ratio calculated annually by CMS and published in the "Federal Register."

Operating disproportionate share hospital (DSH)¶

Hospitals that meet the Disproportionate share hospital (DSH) patient percentage criteria are entitled to adjustments to the Federal portion of their operating Medicare Severity-Diagnosis Related Group (MS-DRG) payments. For hospitals that qualify for DSH payment, Pricer calculates the DSH adjustment percentage.Pricer calculates the Operating DSH effective 10/1/91 and bypasses this field. Zero-fill for all hospitals 10/1/91 and later.

Operating DSH percent¶

The Operating DSH is the operating disproportionate share adjustment percentage.

Operating federal specific portion¶

The operating IPPS payment based on the Federal rate. (Does not include any payment based on the hospital-specific (HSP) rate for sole community hospitals (SCHs) or Medicare-dependent hospitals (MDHs), if applicable).

Operating hospital-specific payment¶

For sole community hospitals (SCHs) and Medicare-dependent hospitals (MDHs), the part of the hospital's payment based on its hospital-specific (HSP) rate.

Operating indirect medical education¶

Medicare increases the operating and capital payment rates of hospitals paid under the IPPS to reflect the teaching hospitals' higher indirect patient care costs compared to non-teaching hospitals, referred to as indirect medical education (IME).

Operating outlier¶

Outlier payments are granted for extremely costly cases. Cases are identified by comparing estimated operating and capital costs to a fixed-loss threshold. The fixed-loss threshold is set annually and adjust to reflect labor costs in the hospital's local market. Total Federal PPS payments are reduced by an amount equal to anticipated outlier payments for the year to fund capital and operating outlier payments.A capital or operating cost outlier is paid only if both capital and operating costs related to an admission exceed the combined outlier threshold. The outlier computation methodology is contained in the A/B MAC (A) Pricer installation guide.

Pass-through & miscellaneous¶

Per diem amount based on the interim payments to the hospital. Must be at least equal to the three pass-through amounts.The following are included in total pass-through amount in addition to the other pass-through amounts. Certified Registered Nurse Anesthetists (CRNAs) are paid as part of Miscellaneous Pass-through for rural hospitals that perform fewer than 500 surgeries per year, and Nursing and Allied Health Professional Education when conducted by a provider in an approved program. Do not include amounts paid for Indirect Medical Education, Hemophilia Clotting Factors, or DSH adjustments. Zero-fill if this does not apply.

Pass-through amount Allogeneic Stem Cell Acquisition¶

The per diem payment amount based on the interim payments to the hospital that includes acquisition amounts for allogeneic stem cell transplants.

Pass-through amount capital¶

Per diem amount based on the interim payments to the hospital for capital. Used for PPS hospitals prior to their cost reporting period beginning in FY 92, new hospitals during their first 2 years of operation FY 92 or later, and non-PPS hospitals or units. Zero-fill if this does not apply. Refer to the Provider Reimbursement Manual, §2405.2 for additional information.

Pass-through amount direct medical education¶

Per diem amount based on the interim payments to the hospital for direct medical education. Zero-fill if this does not apply. Refer to the Provider Reimbursement Manual, §2405.2 for additional information.

Pass-through amount for Supply Chain Costs¶

The per diem amount based on the interim payments to the hospital. Includes payment adjustments for the additional resource costs of establishing and maintaining access to buffer stocks of essential medicines. Also include payment adjustments for the additional cost for procurement of wholly domestically made NIOSH-approved surgical N95 respirators.

Pass-through amount organ acquisition¶

Per diem amount based on the interim payments to the hospital for organ acquisition. Includes standard acquisition amounts for kidney, heart, lung, pancreas, intestine and liver transplants. Does not include acquisition costs for bone marrow transplants. Zero-fill if this does not apply. Refer to the Provider Reimbursement Manual, §2405.2 for additional information.

Payment CBSA¶

Payment Core-Based Statistical Area (CBSA), a 5-digit value. Enter the appropriate code for the CBSA, 00001-89999 or 000 followed by the 2-digit numeric State code to which a hospital has been reclassified. For example, Ohio with state code 36 would be entered as '00036'. Leave blank or enter the actual location CBSA (field 35) if not reclassified.

Payment model adjustment¶

Payment Model Adjustment (PMA) Derived from payment model Technical Direction Letter.

Post-acute transfer¶

Enter 'Y' if one of the following Patient Status Codes is present on the claim: 03, 05, 06, 62, 63, or 65. Pricer will determine if the post acute care transfer payment will apply depending on the length of stay (LOS) and the Medicare Severity-Diagnosis Related Group (MS-DRG).There are three factors to consider, the discharge status code on the claim, the length of stay (LOS), and the Medicare Severity-Diagnosis Related Group (MS-DRG) in whether the post-acute transfer policy applies. Please review our policy (See Section 40.2.4 C.)Keep in mind that the length of stay must be less than the average length of stay for the DRG. Please refer to the lists of applicable DRGs found in Table 5 of each Federal Register released for a fiscal year.

Procedure codes¶

The International Classification of Diseases, Tenth Revision, Procedure Coding System (ICD-10-PCS) code set used to report surgical or other procedure(s) performed during the beneficiary's stay.For example, A49.02 can be entered as A4902 without decimals.

Provider number¶

Enter between six - thirteen digit CMS Certification Number (CCN) present on the claim. For a sub-campus unit of a multicampus hospital, enter the full CCN number that includes the 6 digits main campus CCN plus the suffix. For example: 010001A. For information on CCN format, you must contact your MAC or review the Provider Specific File information found on the CMS Provider Data Service website. The National Provider Identifier (NPI) on the claim (if submitted by the hospital) is not entered in this field. You should receive both the CCN number and the NPI number on the claim. In rare circumstances, however, a hospital may only submit their NPI number without their CCN number. Should this occur, you will have to contact the billing hospital to obtain the CCN number as the Web Pricer cannot process using the NPI.

Provider PPS period¶

The Provider PPS period field is obsolete and left blank as of April 1, 1991.

Provider type¶

The provider type identifies the provider type with a two-digit code. For example: 04 is Rehabilitation facility, 50 is Rehabilitation Distinct Part, 06 is Hospital Distinct Parts. For a full list of provider types, please see the Medicare Claims Processing Manual, Chapter 3 - Inpatient Hospital Billing, Addendum A - Provider Specific File, accessible here: https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Internet-Only-Manuals-IOMs

Readmission adjustment¶

Reduces payments to IPPS hospitals for excess readmissions, starting October 1, 2012. CMS calculates the payment reduction and component results for each hospital based on its performance during a rolling three-year performance period. This is the outcome of applying the Readmission adjustment factor.

Readmission adjustment factor¶

The Hospital Readmissions Reduction Program payment adjustment factor is the form of the payment reduction CMS uses to reduce hospital payments. Payment reductions are applied to all Medicare fee-for-service base operating diagnosis-related group payments during the FY (October 1 to September 30). The payment reduction is capped at 3 percent.

Reclassification CBSA¶

The Core-Based Statistical Area (CBSA) code, or the rural area, to which a hospital has been reclassified for wage index purposes. If the hospital has not been reclassified, this field will be left blank or will default to display the Geographic Location CBSA.

Reduced coinsurance trailer count¶

Enter the number of APCs the provider has elected to reduce coinsurance for. The number cannot be greater than 999.

Region Indicator¶

Flag indicating if CBSA is Rural or Urban.

Regular days¶

A count of days which the beneficiary utilized a covered service

Report date¶

Must be numeric, enter date format here date file created/run date of the Provider report for submittal to CMS Central Office.

Short-term acute transfer¶

Enter 'Y' if there is a Patient Status Code 02, 66, 82 or 94 are on the claim. Otherwise, enter 'N' (or tab). Pricer will apply a transfer payment if the length of stay is less than the average length of stay for this MS-DRG.

Sole community or Medicare¶

The sole community or Medicare field indicates if the provider is a sole community hospital (SCH) or a Medicare dependent hospital (MDH) effective with cost reporting periods that begin on or after April 1, 1990. If the provider is not a SCH or MDH, this field is blank. If the provider is a SCH or MDH, this field shows the base year for the operating hospital-specific rate, the higher of either 82 or 87. SCHs and MDHs are paid based on either the Federal rate or their hospital-specific (HSP) rate, whichever will result in the greatest payment. As of October 1, 2012, MDHs are no longer valid provider types.

Special locality indicator¶

Indicates the type of special locality provision that applies. For End Stage Renal Disease (ESRD) facilities with dates of service prior to Jan 1, 2025, value “Y” equals low volume adjustment applicable. For Dates of service on or after Jan 1, 2025, value “blank” equals no low volume adjustment applicable and value “1” or “2” equals tier number applicable for low volume adjustment.

Special payment indicator - Claim¶

The default value for this field is blank. If you know that another special payment indicator applies, you can also enter 1, 2, or 3. - 0 = default (neither condition code nor late penalty apply)

• 1 = Claim has Condition Code 66 (this means that the provider has refused cost outlier payment for this claim)

• 2 = Late filing penalty (no longer applied)

• 3 = No outlier and late penalty, combined (no longer applied)

Special payment indicator - Provider data¶

The special payment indicator code indicates the type of special payment provision that applies. A blank field indicates that the special payment is not applicable. "Y" indicates reclassified. "1" indicates special wage index indicator. "2" indicates both special wage index indicator and reclassified. "D" indicates dual reclassified.

Special provider update factor¶

The special provider update factor field is obsolete for hospitals as of Fiscal Year 1992. Effective January 1, 2018, this field is used for Home Health Agencies (HHA) only. For HHA, this fields shows the VBP adjustment factor provided by CMS for each HHA; if no factor is provided, the field will show 1.00000.

Special wage index¶

Certain providers may be assigned a special wage index. The special wage index field will display zero unless the Special Payment Indicator is set to "1" or "2."

SSI ratio¶

The supplemental security income ratio (SSI ratio) is used to determine if the hospital qualifies for a disproportionate share adjustment and to determine the size of the capital and operation DSH (Disproportionate Share Hospital) adjustments. The SSI ratio is the percentage of Medicare inpatient days attributable to patients eligible for both Medicare Part A and Supplemental Security Income (SSI).

Standardized amount CBSA¶

The Standardized amount CBSA shows the Core-Based Statistical Area (CBSA) code, or the rural area, to which a hospital has been reclassified. If the hospital has not been reclassified, this field will be left blank or default to display the Geographic Location CBSA.

Standardized amount MSA¶

The MSA (metropolitan statistical area) indicates where a provider is located. The Standardized amount MSA indicates if and how a facility has been reclassified for standardized amount. The Wage Index MSA field is formatted as a four digit code in the range 0040-9965 or, if a rural area, a two digit state code. CMS defines hospital geographic areas based on the definitions of urban areas and rural areas issued by the Office of Management and Budget (OMB). A full listing of the MSAs can be found on the OMB website: https://www.whitehouse.gov/omb/information-for-agencies/bulletins/

State code¶

The 2-digit state code where the provider is located.

Supplemental wage index¶

Enter the supplemental wage index that certain providers may be assigned by CMS. Enter zeroes if it does not apply.

Supplemental wage index indicator¶

Enter "1" for Prior Year Wage Index to be applied. Leave blank if it does not apply.

Temporary relief indicator¶

The Temporary Relief Indicator will be listed as "Y" if the provider qualifies for a payment update under the temporary relief provision. Otherwise, the field is left blank.Effective October 1, 2005, "Y" will display for IRFs located in the state and county in Table 2 of the Addendum of the August 15, 2005 Federal Register (70 FR 47880). The table can also be found at the following website: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientRehabFacPPS/Data-Files

Termination date¶

This field provides the date on which the reporting MAC ceased servicing the provider. If there is no termination date, this field will display as zero. If the provider is terminated or transferred to another MAC, a termination date is placed in the file to reflect the last date the provider was serviced by the outgoing MAC. Likewise, if the provider identification number changes, a termination date is placed in the provider file transmitted to CMS Central Office for the old provider identification number.

Total pass-through & miscellaneous¶

Per diem amount based on the interim payments to the hospital. Must be at least equal to the Capital, Direct Medical Education, and Organ Acquisition pass through amounts. The following are also included in the total pass through amount: Allogeneic Stem Cell Acquisition, Supply Chain Costs, Certified Registered Nurse Anesthetists (CRNAs), which are paid as part of Miscellaneous Pass-through for rural hospitals that perform fewer than 500 surgeries per year, and Nursing and Allied Health Professional Education, when conducted by a provider in an approved program. Do not include amounts paid for Indirect Medical Education, Hemophilia Clotting Factors, or DSH adjustments. Zero-fill if this does not apply. Refer to the Provider Reimbursement Manual, §2405.2 for additional information.

Total pass-through amount and miscellaneous¶

Per diem amount based on the interim payments to the hospital. Must be at least equal to the Capital, Direct Medical Education, and Organ Acquisition pass through amounts. The following are also included in the total pass through amount: Allogeneic Stem Cell Acquisition, Supply Chain Costs, Certified Registered Nurse Anesthetists (CRNAs), which are paid as part of Miscellaneous Pass-through for rural hospitals that perform fewer than 500 surgeries per year, and Nursing and Allied Health Professional Education, when conducted by a provider in an approved program. Do not include amounts paid for Indirect Medical Education, Hemophilia Clotting Factors, or DSH adjustments. Zero-fill if this does not apply. Refer to the Provider Reimbursement Manual, §2405.2 for additional information.

Transfer Adjustment factor¶

Medicare reduces payment in some cases when a patient has a short Length of Stay (LOS) and transfers to another acute care hospital, or in certain circumstances, to a post-acute care setting.

Transfer status¶

Short-term acute transferSelect if there is a Patient Status Code 02, 66, 82 or 94 are on the claim. Pricer will apply a transfer payment if the length of stay is less than the average length of stay for thisDRG.Transfer CasesApplies to Return codes 03, 05, 06, and 33: Paid a per diem payment to the transferring IPPS hospital up to the full DRG payment if covered days are less than the geometric mean LOS for the DRG. If covered days equal or exceed the geometric mean length of stay, the standard payment is calculated. - Return Code 03: See below

• Return Code 05: Indicates case qualified for a cost outlier payment.

• Return Code 06: Indicates provider refused cost outlier payment.

• Return Code 33: Indicates an outlier payment would be necessary if the CCR increased by 20 percentage points.

Postacute Transfer CasesSelect if one of the following Patient Status Codes is present on the claim: 03, 05, 06, 50, 51, 62, 63, 65, 83, 85, 86, 90, 91 or 93. Pricer will determine if the post-acute care transfer payment will apply depending on the length of stay and the DRG. - Return Code 10: For postacute transfer DRGs that have double the payment on the 1^st day for purposes of the postacute care transfer policy

• Return Code 12: For postacute transfer DRGs that receive 50 percent of the prospective payment on the 1^st day of the stay for purposes of the postacute care transfer policy

• Return Code 40: For postacute transfer DRGs that have double the payment on the 1^st day for purposes of the postacute care transfer policy. Indicates an outlier payment would be necessary if the CCR increased by 20 percentage point

• Return Code 42: For postacute transfer DRGs that receive 50 percent of the prospective payment on the 1^st day of the stay for purposes of the postacute care transfer policy. Indicates an outlier payment would be necessary if the CCR increased by 20 percentage points.

Applies to Return codes 10, 12, 40: Payment to the transferring IPPS hospital (when the patient transfers to a non-IPPS hospital) for postacute transfer DRGs as published in the annual IPPS Final Rule. Per diem payment based on the standard DRG payment if the covered days are less than the geometric mean LOS for the DRG. If covered days equal or exceed the geometric mean length of stay the standard payment is also calculated. The cost outlier portion of the payment is calculated if the adjusted charges on the bill exceed the outlier threshold.For further information on transfers between IPPS hospitals, see §40.2.4 part A ofhttps://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/clm104c03.pdf

Transitional corridor payments (TOPs) indicator¶

Enter the code to indicate whether Transitional Corridor Payments (TOPs) applies or not. - Y = qualifies for TOPs

• N = does not qualify for TOPs

Uncompensated care amount¶

The estimated per discharge uncompensated care payment amount calculated and published by CMS for each hospital.

Value-based purchasing adjustment¶

The Hospital Inpatient Value-Based Purchasing ("Hospital VBP") Program adjusts Medicare's payments to reward hospitals based on the quality of care that they provide to patients. The program operates by 1) reducing a portion of participating hospitals' Medicare payments for hospital base operating diagnosis-related group (DRG) payments by a specified percentage for the applicable fiscal year, then 2) using the estimated total amount of those payment reductions to fund value-based incentive payments to the same hospitals for discharges in that fiscal year based on their performance under the program.First, a percent reduction is made to participating hospitals' base operating diagnosis-related group (DRG) payment amounts for the applicable fiscal year. The applicable percent reduction to participating hospitals' base operating DRG payment amounts increased by 0.25 percent each federal fiscal year (FY), starting at a 1.0 percent reduction in the first year of the Hospital VBP program until it reached 2.0 percent. The following lists the applicable percent reductions, by year:For FY 2013: 1.0 percent;For FY 2014: 1.25 percent;For FY 2015: 1.5 percent;For FY 2016: 1.75 percent; andFor FY 2017 and subsequent years: 2.0 percent.

Value-based purchasing adjustment factor¶

The hospital's total performance score (TPS) is converted to a value-based incentive payment adjustment factor, and that factor is then multiplied by the base operating DRG payment amount for each Medicare fee-for-service discharge in a fiscal year to calculate the adjusted payment amount that applies to the discharge for that fiscal year.Enter VBP Adjustment Factor. If Data Element 51 = N, leave blank.

Value-based purchasing participant¶

Section 3001 of the Affordable Care Act added section 1886(o) to the Social Security Act, establishing the Hospital Value-Based Purchasing (VBP) Program. The value-based purchasing (VBP) participant field will show "Y" (Yes) if the hospital is participating in the program and "N" (No) if the hospital is not participating.

Wage index¶

As part of the methodology for determining prospective payments to hospitals, standardized amounts must be adjusted for area differences in hospital wage levels. This adjustment factor is the wage index.Section 1886(d)(3)(E) of the Social Security Act requires that, as part of the methodology for determining prospective payments to hospitals, the Secretary must adjust the standardized amounts “for area differences in hospital wage levels by a factor (established by the Secretary) reflecting the relative hospital wage level in the geographic area of the hospital compared to the national average hospital wage level.” This adjustment factor is the wage index.

Wage index MSA¶

Wage Index Metropolitan Statistical Area (MSA), indicates where a provider is located as well as if and how a facility has been reclassified due to its prevailing wage rates. The Wage Index MSA field is entered as a 4-digit value, that ranges from 0040-9965. In a rural area, the Wage Index MSA is entered as '00' followed by the 2-digit numeric state code. For example, Ohio with state code 36 would be entered as '0036'.

Waiver code¶

The waiver code is set to either "Y" (Yes) or "N" (No). "Y" indicates waived, meaning the provider is not under PPS. "N" indicates not waived, meaning the provider is under PPS.

Last updated: 2026-01-30. Source: CMS Web Pricer