Senators ask CMS to delay DRG changes

Sens. Chuck Grassley (R-IA) and Max Baucus (D-MT) are asking CMS to delay planned changes to Medicare payments. In April, CMS proposed changes to the diagnostic-related groups (DRGs), the system used to classify patient cases that determines how much Medicare will reimburse the hospital. Changes would include payments based on costs rather than charges and would be adjusted for the severity of each case. CMS wants to initiate the changes for fiscal year 2007, but the Senators want to wait until 2008 so stakeholders can better understand what impact this will have on payments. JPMorgan analyst Michael Weinstein noted that Grassley and Baucus' concerns may "significantly increases the likelihood that we will see not only meaningful revisions to the agency's April proposal, but a likely delay in its implementation." If changes aren't made, the cardiac medical device sector in particular could face steep reimbursement cuts.

- take a look at this report [1] from Modern Healthcare
- read this MarketWatch article [2] for more on how the changes will impact the device industry