Medicare program; changes to the inpatient hospital prospective payment system; and proposed fiscal year 1985 rates--HCFA. Proposed rule.

We are proposing to amend the Medicare regulations published as interim final rules on September 1, 1983 (48 FR 39752) and final rules on January 3, 1984 (49 FR 234). Those regulations implement section 1886 of the Social Security Act, which changes the method of payment for inpatient hospital services from a cost-based, retrospective reimbursement system to a prospective payment system based on diagnosis. Generally, our proposed changes would be effective with discharges occurring on or after October 1, 1984, or with hospital cost reporting periods beginning on or after October 1, 1984. 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 applicable to discharges occurring on or after October 1, 1984, in the case of the Federal portion of the payment and effective with hospital cost reporting periods beginning on or after October 1, 1984, in the case of the hospital-specific portion. These changes would be applicable in the second year of the three-year transition period for the prospective payment system. Congress has passed a bill (H.R. 4170, known as the "Deficit Reduction Act of 1984") which, if approved by the President, will affect the proposed rates and rules included in this notice. We will make adjustments as necessary in the final rule to accommodate changes required by this legislation.