DRG payment for long-term ventilator patients. Implications and recommendations

Much concern has been expressed about the Medicare Prospective Payment System's impact on access to care. In this study, we examine the financial impact of diagnosis-related group (DRG) payment for chronic ventilator-dependent Medicare patients. During a one-year period, payment for 95 Medicare patients who received a minimum of three days of continuous ventilator treatment and who spent no time in surgical intensive care at Rush-Presbyterian-St. Luke's Medical Center, was calculated to be $2.2 million below costs, representing an average loss per discharge of $23,129. Patients stayed an average of 26.6 days, of which 14.2 days were spent on a ventilator. We conclude that the results suggest a financial bias against chronic ventilator-dependent patients exists in the DRG system which could present access problems. We recommend three approaches to recognizing the cost of care for such patients in the DRG payment system and encourage those in public policy-making positions to use our results as the basis for a larger scale analysis of the impact of Medicare DRG payment on chronic ventilator-dependent patients.