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OCA outlines approach to measure hospital spending; seeks work‑group input on outpatient intensity adjustment
Summary
OCA described a methodology for measuring hospital spending that adjusts inpatient discharges with a case mix index and proposes developing an outpatient intensity adjustment using either CMS APC weights or a proprietary EAPG grouper. OCA will validate methods with HPD claims and hospital financial reports and reconvene a work group this summer.
The Office of Health Care Affordability (OCA) briefed its Health Care Affordability Advisory Committee on June 16 on a new approach to measuring hospital spending that would adjust for case complexity in inpatient care and for variable intensity in outpatient services. The most important change: OCA plans to produce a per‑unit price measure for hospitals that separates volume and case intensity from price. For inpatient services, OCA will use the well‑established case mix index (CMI) to convert discharges into case mix adjusted discharges (CMADs) and then divide inpatient net patient revenue by CMADs to calculate inpatient revenue per case‑mix‑adjusted discharge. Why it matters: Hospital spending accounts for a large share of health care costs, but simple measures that count each inpatient or outpatient visit equally can mask…
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