As used in this section and in Sec. 412.154, the following definitions apply:
Aggregate payments for all discharges is, for a hospital for the applicable period, the sum of the base operating DRG payment amounts for all discharges for all conditions from such hospital for such applicable period.
Aggregate payments for excess readmissions is, for a hospital for the applicable period, the sum, for the applicable conditions, of the product for each applicable condition of:
(1) The base operating DRG payment amount for the hospital for the applicable period for such condition;
(2) The number of admissions for such condition for the hospital for the applicable period; and
(3) The excess readmission ratio for the hospital for the applicable period minus 1.
Applicable condition is a condition or procedure selected by the Secretary among conditions and procedures for which:
(1) Readmissions represent conditions or procedures that are high volume or high expenditures; and
(2) Measures of such readmissions have been endorsed by the entity with a contract under section 1890 and such endorsed measures have exclusions for readmissions that are unrelated to the prior discharge (such as a planned readmission or transfer to another applicable hospital).
Applicable hospital is a hospital described in section 1886(d)(1)(B) of the Act.
Applicable period is, with respect to a fiscal year, the 3-year period (specified by the Secretary) from which data are collected in order to calculate excess readmission ratios and adjustments under the Hospital Readmissions Reduction Program.
Base operating DRG payment amount is the wage-adjusted DRG operating payment plus any applicable new technology add-on payments under subpart F of this part. This amount is determined without regard to any payment adjustments under the Hospital Value-Based Purchasing Program, as specified under Sec. 412.162. This amount does not include any additional payments for indirect medical education under Sec. 412.105, the treatment of a disproportionate share of low-income patients under Sec. 412.106, outliers under subpart F of this part, and a low volume of discharges under Sec. 412.101. With respect to a sole community hospital that receives payments under Sec. 412.92(d) or a Medicare-dependent, small rural hospital that receives payments under Sec. 412.108(c) for FY 2013, this amount also does not include the difference between the hospital-specific payment rate and the Federal payment rate determined under subpart D of this part. With respect to a hospital that is paid under section 1814(b)(3) of the Act, this amount is an amount equal to the wage adjusted DRG payment amount plus new technology payments that would be paid to such hospitals, absent the provisions of section 1814(b)(3) of the Act.
Excess readmissions ratio is a hospital-specific ratio for each applicable condition for an applicable period, which is the ratio (but not less than 1.0) of risk-adjusted readmissions based on actual readmissions for an applicable hospital for each applicable condition to the risk-adjusted expected readmissions for the applicable hospital for the applicable condition.
Floor adjustment factor is the value that the readmissions adjustment factor cannot be less than for a given fiscal year. The floor adjustment factor is set at 0.99 for FY 2013, 0.98 for FY 2014, and 0.97 for FY 2015 and subsequent fiscal years.
Readmission is the case of an individual who is discharged from an applicable hospital, the admission of the individual to the same or another applicable hospital within a time period of 30 days from the date of such discharge.
Readmissions adjustment factor is equal to the greater of:
(1) 1 minus the ratio of the aggregate payments for excess readmissions to aggregate payments for all discharges; or
(2) The floor adjustment factor.
Wage-adjusted DRG operating payment is the applicable average standardized amount adjusted for resource utilization by the applicable MS-DRG relative weight and adjusted for differences in geographic costs by the applicable area wage index (and by the applicable cost-of-living adjustment for hospitals located in Alaska and Hawaii). This amount includes an applicable payment adjustment for transfers under Sec. 412.4(f). [77 FR 53674, Aug. 31, 2012, as amended at 78 FR 50967, Aug. 19, 2013]