Medicare program: changes to the inpatient hospital prospective payment system and fiscal year 1986 rates--HCFA. Final rule.

We are modifying the Medicare inpatient hospital prospective payment system in order to implement necessary changes arising from experience with the system. In addition, this final rule sets forth our first adjustment of the diagnosis-related group weights and classifications as required under section 1886(d)(4)(C) of the Act. Also, in the addendum to this final rule, we are describing changes in the methods, amounts, and factors necessary to determine prospective payment rates for Medicare inpatient hospital services. Changes to the Federal portion of the payment are applicable to discharges occurring on or after October 1, 1985. Changes to the hospital-specific portion are effective with hospital cost reporting periods beginning on or after October 1, 1985. In effect, these changes apply to the final year of the three-year transition period for the hospital prospective payment system. The addendum also sets forth the rate-of-increase limits (target amounts) for hospitals excluded from the prospective payment system.