[Code of Federal Regulations]
[Title 42, Volume 2]
[Revised as of October 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 42CFR412.10]

[Page 398-399]
 
                         TITLE 42--PUBLIC HEALTH
 
                    CHAPTER IV--CENTERS FOR MEDICARE
                          & MEDICAID SERVICES,
                        DEPARTMENT OF HEALTH AND
                             HUMAN SERVICES
 
PART 412_PROSPECTIVE PAYMENT SYSTEMS FOR INPATIENT HOSPITAL SERVICES
--Table of Contents
 
                      Subpart A_General Provisions
 
Sec. 412.10  Changes in the DRG classification system.

    (a) General rule. CMS issues changes in the DRG classification 
system in a

[[Page 399]]

Federal Register notice at least annually. Except as specified in 
paragraphs (c) and (d) of this section, the DRG changes are effective 
prospectively with discharges occurring on or after the same date the 
payment rates are effective.
    (b) Basis for changes in the DRG classification system. All changes 
in the DRG classification system are made using the principles 
established for the DRG system. This means that cases are classified so 
each DRG is--
    (1) Clinically coherent; and
    (2) Embraces an acceptable range of resource consumption.
    (c) Interim coverage changes--(1) Criteria. CMS makes interim 
changes to the DRG classification system during the Federal fiscal year 
to incorporate items and services newly covered under Medicare.
    (2) Implementation and effective date. CMS issues interim coverage 
changes through its administrative issuance system and makes the change 
effective as soon as is administratively feasible.
    (3) Publication for comment. CMS publishes any change made under 
paragraph (c)(1) of this section in the next annual notice of changes to 
the DRG classification system published in accordance with paragraph (a) 
of this section.
    (d) Interim changes to correct omissions and inequities--(1) 
Criteria. CMS makes interim changes to the DRG classification system to 
correct a serious omission or inequity in the system only if failure to 
make the changes would have--
    (i) A potentially substantial adverse impact on the health and 
safety of beneficiaries; or
    (ii) A significant and unwarranted fiscal impact on hospitals or the 
Medicare program.
    (2) Publication and effective date. CMS publishes these changes in 
the Federal Register in a final notice with comment period with a 
prospective effective date. The change is also published for public 
information in the next annual notice of changes to the DRG 
classification system published in accordance with paragraph (a) of this 
section.
    (e) Review by ProPAC. Changes published annually in accordance with 
paragraph (a) of this section are subject to review and comment by 
ProPAC upon publication. Interim changes to the DRG classification 
system that are made in accordance with paragraphs (c) and (d) of this 
section are subject to review by ProPAC before implementation.

[50 FR 35688, Sept. 3, 1985, as amended at 51 FR 31496, Sept. 3, 1986; 
57 FR 39820, Sept. 1, 1992]